HOUSINGNEWS REPORT
FEEDING THE SINGLE FAMILY RENTAL BEAST
Q3 2018 EQUITY RICH PROPERTIES BY ZIP
adding that disruption will eventually come nevertheless. “Somebody’s going to figure it out and one of those models is going to get some legs.” Click to Buy Rand, the OwnAmerica CEO, sees potential in a Divvy-like model for institutional investors, giving them an easy option to sell to an owner- occupant at a higher price point than what they could get from another SFR operator. “If you can liquidate by having standing offers … you can buy if you can pay this price,” he explained. “I know the tenants love the house, they love the schools, they love the neighborhood. … they can click and buy. … I think people will pay a little premium to stay in place.” Roofstock is moving toward a click-to- buy experience for individual investors, according to CEO Beasley. “We are all about making investment in residential real estate easier and easier,” he said, noting the company is developing a product called Roofstock1, which will allow investors to buy securities backed by single family rentals without having to deal with the biggest obstacles for most individual investors — financing and property management. “We manage. All you are doing is buying a security. You leave everything else to us,” he said. “A properly priced rental home today, there is almost limitless demand for it. We have to get creative about how to attract this inventory, and if it isn’t available to create it.”
PERCENT EQUITY RICH (LTV BELOW 50)
4.0%
87.1%
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“In most single family rental businesses the landlord is seen as an adversary. We want to be seen as a partner with the renter.”
ADENA HEFETS CO-FOUNDER, DIVVY HOMES
“That feels really good given how operationally complex this is,” she said. “We’ve had nothing but increasing demand over time. … We’re now gaining enough traction where there’s less of convincing that we’re a really company.” The average purchase price for homes purchased by Divvy Homes over the past year was $131,000, according to an ATTOM Data Solutions analysis of public record data. Homes at that price point continue to be in high demand, Hefets noted.
she said, adding that the company has noticed a bit of a drop-off in cash offers from investors. “A little bit of a slowdown in investing activity. We used to bid against multiple cash offers.” The challenge for SFR disrupters like Divvy Homes boils down to the messaging, according to other experts interviewed. “It’s a pretty hard message to convey. People understand buying, they understand selling, they understand renting,” said the single family owner- operator with homes in the Midwest who asked to remain anonymous,
“We buy $100,000 homes in Cleveland, so we’re not really seeing a slowdown,”
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NOV 2018 | ATTOM DATA SOLUTIONS
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