As we reach 2016, most of us begin reflecting on the past year and romanticize what is in the past. However, in real estate investing, what is old, is truly new again, especially in the SFR investment space. The SFR investment space is full of small time investors who own one, two or a handful of rentals as a means of preserving their capital, generating passive income and creating wealth over time. My grandfather, a firefighter in small town USA, and many of his friends did just this. They invested spare cash in residential properties over their lifetime, resulting in meaningful real estate portfolios and nice retirement income sources. Thus, it should come as no surprise that institutional investors would eventually come around to the SFR asset class. The economic recession and housing crisis served as the catalyst, with large inventories of SFRs available at big discounts. As a result, the news in the SFR investment space has been dominated by the rise of the behemoth SFR for rent owners, many now publicly listed. These owners still only account for a small percentage of the total universe of SFR rental investors. The small and mid-sized SFR investor is still out there looking for opportunities to add to their real estate portfolios, and likely looking for capital sources. The good news is that lenders want to work with these types of investors, too!
Investing in SFR real estate is not a new concept. For many small time investors, it is simply a time-tested tradition of preserving capital, building wealth and generating additional income. What makes this space seem shiny and new is the availability of capital (equity and debt) and the institutional players dominating the conversation.
Colony American Finance is a leading provider of financing solutions to residential real estate investors. We provide attractive long-term debt products for stabilized rental portfolios as well as credit lines for new acquisitions. For more information about how Colony American Finance can help grow your rental and rehab business, please call us at 844-223-2231.