Leveraging the NEW
Rental Home Market
By Tim Houghten
which placed ‘outdoor
living spaces’, ‘curb
appeal’, and ‘garages’,
and other features more
characteristic of single
family homes as the
most in demand factors
buy to rent loan programs specifically to
provide liquidity, and fuel this market. Re- for today’s home shoppers.
In fact, in many areas rental vacancy
cent housing statistics appear to indicate
this has been adding strength and traction. rates are below 5%. Recent statistics
from Zillow and the Boston Globe
reveal rental rates responding by rising
What Are Real Estate Investors
by over 22% year-over-year in some
Buying Now, and Why?
While headlines reveal major bank brands neighborhoods. In Southwest Florida,
shedding mortgage staff by the thousands, some prime neighborhoods have recent-
Beacham reports B2R Finance has actual- ly seen asking rents rocket 50% in a
ly been “beefing up” the firm’s operational matter of weeks, and this is the region’s
slow season.
and client service team, to meet increased
Meanwhile, U.S. GDP has been
demand.
revised down to negative territory, bond
According to the finance giant’s presi-
yields are low, stocks have shown their
dent, speculation about declining fore-
more volatile side, and investors need a
closure activity, “has not been a factor.”
Some investors are certainly still acquiring stable alternative.
The modified American Dream
distressed homes, though for
might involve a little less sweat
the majority, it is business as
equity and commitment today,
usual; acquiring sound, less
resulting in renting a family home
problematic, cash-flowing
with some yard space becoming a
rental homes from more
very happy medium for many.
traditional sources.
At the same time, professional
Asked for his opinion
investors, and the more finan-
on how some parties have
John Beacham cially blessed are in need of what
recently used the media to
Beacham describes as “an inflation
promote their interests in
proclaiming “the ‘burbs are dead”, and ev- adjusted asset, which is able to provide
eryone from Millennials to aging boomers stable retirement income.” Single family
are flocking to dense inner cities, in search rental homes check all the boxes perfect-
of micro apartments, Beacham said he had ly, providing investors can find “predict-
ability in long term financing.”
witnessed no substantial, tangible shifts
in data to support that. Rather he points
Priorities for Real Estate Investors
to very moderate, to “low single family
rental home vacancy rates, which are hov- Aside from concern of lost opportunity
ering around just 5%,” for those that want costs, and long-term impact on invest-
ment portfolios from not seizing on
real numbers to support their investment
current market conditions, real estate
decisions.
investors have certainly found far
This appears to more closely coincide
more clarity in what they expect from
with multiple recent studies including the
a finance partner, and they are increas-
2014 Realtor.com Home Crush Survey,
W
hat’s really going on in
the single family rental
home industry? What
are real estate investors buying
now, and why? Who is up for a
$10M line of credit to expand
their rental property portfolio?
Private Money411 sat down with
finance industry veteran and President
of B2R Finance John Beacham to get
the real deal on the state of the market
today.
So what are serious real estate en-
trepreneurs and sophisticated inves-
tors really up to now? What priorities
are driving their property investment
moves, and how great are these new buy
to rent loan programs, really?
The President on the State of the
Single Family Rental Home Industry
There’s no question B2R Finance’s John
Beacham has to be one of the top minds
in the mortgage and real estate industry
today. In a rare opportunity to get his
personal view on the market and ben-
efit of his 17 plus years managing big
money for the world’s largest mortgage
giants, Private Money411 was able to
tap the President’s take on the evolving
rental home landscape.
Firstly, Beacham reminds us just how
large this market is, with “an estimated
14M rental homes in the U.S.” This
number could increase significantly if
billionaire investor, Sam Zell’s recent
prediction of American homeowner-
ship dropping to just 55% comes true
too. Recently most of the single family
rental pool has been held finance free.
Beacham credits this to a void in the
mortgage market, which has lacked
strong options, and wasn’t serving real
estate investor needs. B2R Finance
broke into 2014 with the game changing
announcement it was unleashing new
Realty411Guide.com
PAGE A5 • 2014
Continued on pg. A16
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