With the homeownership rate in the U.S. currently near a 50-year low, there are now approximately 14 million single-family rental homes in the country.
In order to tap into this multi-trillion dollar asset class, many investors and others in the single-family rental space gathered at the Second Annual Five Star Single-Family Rental (SFR) Summit this week in Frisco, Texas, for two days worth of panels from industry experts, Ted Talks, and networking.
Five Star President CEO Ed Delgado noted that the industry goes in cycles—15 to 20 years ago, the buzzword was loss mitigation, to the point where companies were being launched just to handle deeds-in-lieu and short sales. Those have largely disappeared, and the popularity of the single-family rental market has exploded in recent years as foreclosure rates have declined. Now, builders are creating entire subdivisions and construction strategies around building single-family homes for the purpose of renting.
Wednesday morning at the SFR Summit featured experts discussing property acquisition—sharpening your acquisition strategy, the pros and cons of portfolio and single-asset acquisition, and when to consider investing.
“My main goal is to shed light on other opportunities in our industry and to show these buyers on any scale how to acquire assets in different, unique platforms,” said Brennan Reid, CEO of Joyce Reid Capital, which specializes in tax sales investments. “The main thing you hear at all these conferences is lack of inventory, lack of inventory, lack of inventory. There’s a lot of inventory out there that people don’t even know exists, and it’s our goal to expose that.”
Wednesday afternoon, industry leaders specializing in disposition strategies took the stage to discuss how to best ensure a portfolio remains agile in a shifting SFR marketplace as well as how to evaluate a portfolio to ensure maximum profitability.
“I think trends we see for the big picture are the large institutions are selling off their C-class portfolios, and because of the emergence of SFR lending, high net worth individual business owners viewing real estate as still attractive even at high traditional values then we have seen in years past,” said Paul Yazbeck, VP Investment Sales for SVN. “They are still able to purchase properties that make sense for them and earn returns that are sufficient.”
The speakers zeroed in on incorporating the appropriate disposition strategy in an investment plan which could make the difference between profit and taking a loss, and exploring the varies strategies industry leaders are already implementing.
The funding session of the SFR Summit on Wednesday included such topics as selecting the right funding product for your portfolio and must-have resources for lenders and borrowers.
(Editor's note: The Five Star Institute is the parent company of MReport and TheMReport.com)