Why SFR
The darling of the 2010s still has significant long-term upside when done properly. Basic supply & demand... there is simply not enough housing in the US to keep up with demand.
The darling of the 2010s still has significant long-term upside when done properly. Basic supply & demand... there is simply not enough housing in the US to keep up with demand.
The ~$4.1 Trillion SFR Market comprises over 16mm homes, only ~2% of which are owned by “Institutions” (Institutions meaning 1 owner with 100+ homes).
Fannie Mae estimates that based on household formations, the Nation is short 3.8m housing units; a fundamental supply deficiency.
Studies have shown that SFR has low correlation to other core real estate sectors & other asset classes. Check out the studies performed by the Man institute
As tangible assets with rental income, both the value & rents can assist in protecting you against the loss in value when inflation is present
(Principal Paydown, Cash Flow , Tax Advantages, Appreciation)
The four primary advantages to real estate investing can be maximized via SFR investing
If you are in it for the long-game (which we hope), after assets are stabilized & loans continue to be paid down to eventually paid off, yourself & your future generations are in control of a tangible assets producing impressive cashflow. These can be passed down, siphoned off, leveraged against, etc.
The purpose of constructing a portfolio guided by a clear thesis/buy box is that once stabilized, they can be sold off at a premium because of their clustered/homogenous nature. Underperfoming assets can be sold, new assets can be bought; and the cycle goes on. All the while, professionally managed by a local property manager.
Take advantage of the ‘too-small’ of areas with outsized returns that institutional players don’t touch
Still an operation that requires boots on the ground, strong vendors, and trusted local experts
i.e.) Many institutions and ‘prop-tech’ companies in the 2010s sought quickreturns... they got in trouble when the market turned. We think of the portfolio as a real estate index fund to ride out
Staying true to a thesis that shows through the portfolio strategy (you can have multiple different portfolios!) will assist in easy & fruitful exit opportunities
Dakota Mivshek, eXp Realty
FL DRE: #SL3579723
CO DRE: TBD
TX DRE: #752807
Dane Christiansen
CO DRE: #ER.100072594
MN DRE: #40820407