Category Archives: Residential

Association Seeks to Standardize Single Family Rental Operations

The National Rental Home Council, a new association of institutional single family rental housing operators recently released a set of operational guidelines for the standardization of operating single family rental housing. The NRHC is first of its kind formed to raise the bar in a growing industry of single-family owner.

Click here for a copy of the new NRHC Operational Guidelines.

 

Sternlicht Sees Strong Potential in Single-Family Housing Business | REIT.com

By Sarah Borchersen-Keto

REIT.com

[APRIL 24, 2014] Starwood Capital Group Chairman and CEO Barry Sternlicht is expressing confidence that the single-family rental housing sector has the potential to become a major REIT asset class, but he acknowledges that investors remain skeptical.

via Sternlicht Sees Strong Potential in Single-Family Housing Business | REIT.com.

Median home price hits 8-year high | 2013-08-08 | HousingWire

 

Median home price hits 8-year high | 2013-08-08 | HousingWire

 

Coming in at the strongest gain in seven and a half years, the national year-over-year median home prices continued to increase in the majority of metropolitan areas in the second quarter, according to the latest quarterly report by the National Association of Realtors.Buyers remain well positioned to afford a home in their area, despite rising prices and higher mortgage interest rates, the report revealed.

via Median home price hits 8-year high | 2013-08-08 | HousingWire.

Building the Real Estate Investment Team – Hiring the Right People

Hiring the right people for your real estate investment team is critical to the long-term success of your real estate investment business.

 

Jobs,  jobs, jobs…this is what we need to see economies grow; but what happens when people do not show up for work after they have been hired? If you are just starting out as a real estate investor, and you are building your first real estate investment team, then you might be feeling a little like a revolving door because the process can include working with several people before the right person clicks; but take heart. The learning curve will surely pass. Here are some ideas and suggestions to make this process easier, while making your real estate business more rewarding.

A Common Challenge

At some point, every real estate investor meets with the challenge of building an efficient investment team in any given market. It really takes the right combination of determination and perseverance by everyone on the team regardless of whether that team member is a real estate attorney, a real estate agent, a property inspector, or a project manager.

If a team member is not 100% on the same page, it shows in their behavior, and then it impacts the team by slowing it down or stalling it altogether. For the most determined investors, which are typically those investors who know that real estate is their blood, they know it is only a matter of time before they find the right people to fill the important roles on their team; but for investors who are new, or who do not have the tolerance for learning how to lead teams effectively, they may give up after encountering the first one or two “bad apples.”  Generally speaking, the hiring and management of investment teams requires a lot of patience, as well as the ability to keep communication open, honest, and solution-based.

Three Ideas to Overcome Challenges 

Here are three ideas to manage the challenge of finding the right people for your real estate investment team.

Solution 1. Realize that the interview process is just the beginning.

In a perfect world, we hire people and they are always a perfect fit . In the real world, however, a persons’ true character and work ethic does not come through until after working with them for a little while. This might happen after the first one or two deals, if they make it to a deal at all. To manage the uncertainty of this process, it would be a good idea to set up a trial period, and understand that the hiring process is just that–a process. It cannot be rushed; it can only be managed to reduce the wasting of time and resources. A good team member recognizes this, and works through the “thick-and-thin” of developing long-term wealth-building partnerships.

Only when you have good people on your team will your real estate business ever grow to the next level; so be diligent, but do not be discouraged.

Solution 2. Going in with expectations in check – Establishing realistic expectations.

Real estate is neither easy, nor glamorous. The daily work of sifting through countless properties  in constant search of financially feasible properties requires a non-stop commitment, tenacious perseverance, and the determination to get things done, as required. This is what it takes to keep up with a constant supply of good deals. Finding a steady supply of financially feasible properties is fundamental to the success of any real estate investor whether a wholesaler, rehabber, landlord, or lease-optioner. With expectations in check, and an acceptance that not all personalities are a good fit for the role we need to fill, it could provide a shift in perception that is needed for the adoption of a mindset; making it easier to manage the team over the long term in a sustainable way.

3. Watch for tell-tale signs of behavioral incompatibility. 

Non-responsiveness, slow, or lackadaisical behavior is a red flag. Seeking to understand the issues that might be preventing a team member from doing his or her job effectively is always the best first step; but when the problem continues to be a growing problem, then a decision must be made. Usually, the best path forward dictates the decision, and the decision may be to let that team member go–whether they were asked to do so, or they volunteered. Whatever the circumstances, when people can not communicate and work through the issues together, they cannot really work effectively together; but when people are on the same page, expectations are realistic, and everyone is committed to building a successful real estate business together that is when a business reaches the next level of growth, and growth is what we need to feed our own economy.

 

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Builder Is Constructing REIT for Home Rentals – WSJ.com

Investors can buy stakes in malls, apartment towers, timber forests and even cellphone towers through real-estate investment trusts. Now, add to the list: single-family homes transformed into rental properties.Beazer Homes USA Inc., one of the nation’s top home builders, has formed a REIT that will buy and then rent single-family homes, one of the largest and most talked-about asset classes in the real-estate business. The Atlanta-based company last week announced that it was joining with buyout firm Kohlberg Kravis Roberts & Co. to form the REIT, which eventually plans to go public.Beazer already had accumulated 192 single-family homes …

via Builder Is Constructing REIT for Home Rentals – WSJ.com.

Job Outlook: Atlanta, GA – A strong job market and a good place for rentals

“Atlanta is one of the fastest growing major cities in the US, and the Atlanta metropolitan region is 8th largest metro area in the country. Atlanta has the 3rd largest number of Fortune 500 companies within city limits, and over 75% of the Fortune 1000 have operations within the Atlanta metropolitan area.”

via Job Outlook: Atlanta, GA – Careers Articles.

FHA will keep funding flips | Inman News

For the second year in a row, the Federal Housing Administration is extending a temporary waiver of its “anti-flipping” rule, meaning homebuyers relying on FHA-insured financing will continue to be able to buy homes that have changed hands in the last 90 days.The waiver is a boon for investors seeking to rehab and flip properties, because it expands the pool of eligible borrowers to include those relying on FHA-backed loans, popular with first-time homebuyers and others who lack the cash to make large down payments.

via FHA will keep funding flips | Inman News.

HomePath.com – For Investors – Structured Sales

Fannie Mae is implementing a structured sales program involving significant sales of real estate assets in the form of either pool sales or joint venture transactions.

Any structured sales under this program are expected to be significantly larger than our existing pool sales described on our “For Investors” page. Joint venture transactions are expected to allow qualified investors to purchase a controlling equity interest in a newly formed investment vehicle created to hold multiple properties in one transaction. The qualified investor would be responsible for the management and servicing of the assets, and would be an equity partner with Fannie Mae. Pools may be national, regional, or geographically focused, subject to post-closing asset management strategies and restrictions, and consist of vacant and / or occupied (including rented) properties. Sales of controlling equity interests will be limited to qualified investors.

via HomePath.com – For Investors – Structured Sales.

Can Commercial Real Estate Investors Help Revive Single-Family Housing?

 

“But might there be an unlikely savior on the horizon for the single-family sector in the form of commercial real estate investors? On Monday, the Federal Housing Finance Agency (FHFA) announced a pilot program through which it would take bids from investors to buy foreclosed residential properties in bulk for the purpose of turning them into rentals.”

via Can Commercial Real Estate Investors Help Revive Single-Family Housing?.

How the Multifamily Market is Benefitting from the Decline of the Single Family Market

 

I have been a Realtor since 1996. One thing I have noticed in my time in business is that—in general– the demand for rental housing goes up when the demand for home ownership goes down. The current economic climate in the housing market stems from a number of issues, but the most obvious is the increased difficulty for buyers to get loans. Loans are increasingly tougher to get because of stricter documentation requirements. This explains why the numbers in the housing market are indicating a growing trend towards renting as opposed to buying.

A recent article reported the increased development activity of multifamily properties (Mortgage Banking 2011), the article attributed the increase of multifamily development activities to the weakness in the single-family market(p. 92-93) and the increased availability of funds in the capital markets. Therefore, the worst single-family housing market in recent history is causing the best multifamily market to occur.  The demand for rentals continues to  grow stronger as more people begin to give up on the idea of owning. The National Apartment Association confirmed this trend when they reported revenue gains of 5.8 percent in 2011 for the multifamily industry.

In my local market of Kitsap County, things are tough for single-family home sales. The pool of qualified buyers has thinned out so much over the last few years, and it continues to shrink. However, multifamily  development activity has increased noticeably in the county within the past few years.

References

Multifamily capitalizes on weak housing markets. (2011). Mortgage Banking, 71(10), 92-93.