Think Zillow when you think Own America and Roofstock. These outfits are listing services for single-family rental (SFR) properties as Zillow is for owner occupied homes. Own America and Roofstock charge sellers a listing fee for advertising the seller’s home on their platform to potential buyers. The difference is that Own America and Roofstock don’t own properties as does Zillow’s iBuyer program.
Once the seller lists their property on a platform, both of these entities offer buyers help in securing a mortgage when needed and finding a property manager when needed to handle the leasing, maintenance, and rent collection for the property.
Home Union actually buys the home from the seller, renovates it, leases it to a tenant and then turns around and sells the home to an investor as an already rent-producing SFR property the very day the investor buys it. Home Union also has a “fix and flip fund” that raises capital to buy, renovate and sell homes without dealing with any rental aspects.
Since the financial crisis 10 years ago, institutional capital from hedge funds, investment banks and accredited investors has poured into home flipping. Home Union founder Don Ganguly said, “One side (home flipping) feeds the other (single family rental investment). If you (as an investor) are not up for owning SFR homes directly, you can go to the fix and flip fund and put in a $10K minimum. Then we buy it, renovate it and turn around and sell it to investors on the other side of the platform as a “ready to rent” property.”
Investability Solutions has a similar model. It began with “mom and pop” investors but is now targeting mid market rental companies that own +1,000 properties and institutional SFR operators. This company buys, renovates, installs a tenant and then sells to companies such as Invitation Homes or American Homes 4 Rent, companies that rent SFR at scale.
Entera bills itself as the “kayak for SFR properties.” This outfit pools together listings from Roofstock, Own America, other iBuyer platforms, multiple listings services and other traditional real estate listings services. It then claims to offer investors all these listings choices on one platform so investors don’t have to do their own platform-by-platform research. Entera also helps buyers secure mortgages and property managers when needed.
There are currently some 17M SFR properties in the US, according to RentRange. Most SFR landlords are “mom and pop” owners with one house but take a look at the rest…
SFR Landlords by Properties Owned according to Investability Solutions
1 6,987,605
2-10 5,119,460
11-50 1,057,942
51-250 282,232
251-500 36,820
501-1,000 18,979
over 1,000 211,793
Home Union’s Ganguly Told Curbed,” In order to do this back in the day (10 years ago), you really had to buckle up your boots and do a lot of heavy lifting. Now, anybody with some money can do it through these platforms. The convenience and ease of use are just light years ahead of what it was a decade ago.” All of these platforms offer investors institutional quality analytics…property monthly rent, current taxes, projected price appreciation, and quality of neighborhoods and schools.
For all real estate agents out there, your competition is offering clients (individuals, partnerships, investors, buyers, sellers, whomever) this level of analytical data. This is the name of the game in which you’re working. Make sure “to buckle up” and do the same on your website platforms whether or not you’re involved with owner occupied homes, SFR properties and/or commercial properties/developments.
