The state of the single-family rental
On April 6 and 7, the five star institute held its annual meeting Single Family Rental Summit at the historic Statler Hotel in the heart of downtown Dallas. The summit brought together industry executives, agents and investors for a day full of panels, talks and networking on all topics related to single family rental and the industries surrounding them.
The event began with a keynote address from Jeffrey Tesch, CEO of RCN Capital. As part of his job, Tesch is responsible for overseeing RCN Capital, implementing sales growth initiatives and overseeing underwriting review. Tesch personally oversaw $2 billion in originations during his 12-year career at RCN Capital.
Tesch greeted the crowd with an industry keynote and explained that the group came together as an opportunity “for you, as investors, to work with experts in their fields to grow their businesses. “.
The state of SFR and preparing for the future
The first panel of the day included Stuart Denyer, co-founder and CEO of New Western; Rob Parsley, Director of Business Development for Lima One Capital; John H. Prins, Managing Director of CoreVest Finance; and Clayton Wyatts, head of corporate development and capital markets for Roofstock (Wyatts is also co-founder of Vesta Ventures).
The panel was moderated by RCN’s Tesch, and he explored the topic of current trends within the SFR space, as well as the trajectory on which it is headed.
When asked, “How are investors using your services earning today, compared to 18-24 months ago, before the pandemic? Denyer replied, “There are still opportunities there…a lot of our audience is buying with the intention of reselling those units.” Citing the example of DFW’s surrounding real estate market, Denyer noted that buyers and investors looking for homes are attracting interest not only in the metropolitan center, but in towns and villages on its outskirts.
“You get out of these big metropolitan areas, but just a little further, and another small step further. This is also amplified by the pandemic, [and] remote working allowed people to not necessarily be based in one location and get bogged down in cities, so they could travel farther afield.
Tesch then posed the question, “Do you see investors diversifying, and how are they earning on your platform compared to pre-pandemic times?”
“They win because they pay the most money for an asset,” Wyatt said. “At the end of the day, you have to pay the most, and I think the way they can do that is by using better tools.”
Wyatt also noted that many markets are seeing “a tale of two cities,” with investors competing with the other two owner/operators in the space, as well as “competing with the retail buyer.”
Investment strategies: weighing the options in the SFR and BFR spaces
The second panel of the day focused on defining investment portfolios by gaining exclusive insights from experts on construction and improvement costs, supply chain, market demand, loans, assessments and exit plans.
Moderated by Jon Ortner, Vice President of Business Development for Inertia Decision Science for Picket Homes, the panel included Daniel Kattan, Founder of Sell2Rent; Alex Offutt, managing director of Constructive Loans; Curtis Roddy, Founder and CEO of Roddy Real Estate Group; and Gagan Sharma, President and CEO of BSI Financial.
Asking the first question of the session, Ortner asked “What headwinds do you see for the sector in this space?” and offered it first to Sharma.
“My company sees an impact on both the traditional owner space and therefore the investor space. Rising interest rates are the topic of the day as Personally, I am convinced that the rates must increase more quickly. I feel like what we’re seeing is we’re hitting the ceiling of what the consumer is going to be able to pay for their rental,” Sharma said. “So far, we haven’t really seen any impact on our customers’ businesses…everyone is doing really, really well.”
Sharma went on to say that people should keep an eye on interest rates, inflation and unemployment as they could affect future conditions.
Offutt was then asked how he and his company came up with a strategy to fight market headwinds.
“We spent a lot of time last year trying to plan a time like this,” Offutt said. “It’s not what I would call a recent development for us, outlook-wise.
Due Diligence: Wisdom from the Front Lines
From common misconceptions to key performance indicators and technical advice, attendees were encouraged to tap into the experience accumulated in this panel of the acquisition process to maximize the success of your own investment.
Moderated by Rudy Casanova, President of RainMaker Solutions, the panel included Adam Gotfried of RoC Capital; Tim Herriage, Executive Director of Retail Lending Development at RCN Capital; and Mark Peterson, director of Build-for-Rent for SVN/SFRhub Advisors.
Property management: tools and tips to minimize your management costs
This final panel of the morning focused on the fact that property management and maintenance costs can have a significant impact on your investments. Participants were encouraged to learn how to make the most of the tools at their disposal and when it makes sense to bring in third-party expertise during this panel.
Moderated by Eric Delgado, Principal at MCM Capital, panelists included Al Freedman, CEO of First Freedom Preservation; Randall Henderson, residential and commercial vice president for Property Management, Inc; and Erica Nason-Stuart, president and co-owner of C&O Services Inc.
“The biggest reason for tenant turnover is property maintenance,” Henderson said. “Rents are going up, but you can also increase the NOI on the other side by dramatically reducing your maintenance expenses, your vacancy rate, and your rental rate by having a property manager part of the process from the start. “
“Better to be Smoky the Bear than a firefighter,” Henderson continued. In other words, it is easier to prevent the fire than to put it out.
“Maintenance is so important,” Al Freedman said. “By doing it right, investing that extra money early on, and thinking about the future, you’ll save money, time, and revenue.”
The Vortex of Sellers
Beginning the afternoon session, this panel focused on feeling the power of cutting-edge solutions that are reshaping the SFR landscape.
Dillon White, Senior Account Manager for Rently, moderated the panel discussion comprised of Umair Kabani, VP of Business Development for Inspectify; Brandon O’Briant, Executive Vice President of AssetVal; and Cameron Paine, vice president of industry relations and head of brokerage for HouseCanary.
White directed the first question to Kabani. He asked, “What problems are you solving today and how has that changed from the last five years and what are you tackling in the industry?”
Kabani said scaling is the main problem currently facing investors with 50 to 100 properties. But using things like the networks of inspectors and other resources available to his company, investors can quickly transition into buying out-of-state or even out-of-country properties.
“Another issue we have solved is access to homes and coordinating all schedules. We have a customer success team that handles coordination and access for all of these inspections, so you can just talk to our team , then the inspector will then take care of our team, go get access, process the data and come back and enter that data into the correct system.
Funding strategies: find out what to expect
The final panel of the day focused on funding strategies and discussed new loan products, terms and capital availability within the SFR and BFR spaces.
Express Capital Financing President Martin Chera moderated the discussion featuring Adam Gotfried, Vice President of Commercial Real Estate Group at RoC Capital; Michael Jansta, Marketing Director of Altisource; and Jorge Newbery, CEO of AHP Servicing, LLC and preREO.
Chera offered the first question to Gottfried. He asked, “Where are your current clients finding properties on today’s market? »
“In terms of finding individual properties, knocking on doors and showing shippers in the drop-down menu,” Gottfried said. “So there are more and more scenarios like this where people are crisscrossing a neighborhood looking for signs of distressed properties, whether it’s the front yard house or utility notices.”
At the end of the panel, Tesch took to the stage to deliver his closing remarks for the day.
“What a great day. I have to tell you that coming to these events, especially this one in particular, I always learn new things. I always think about how the different segments of our industry work together and come together to really do what the single family rental industry has become,” Tesch concluded. “To be able to hear how everyone is pushing the same thing everywhere and there was a ton of content today and I was really impressed. So thank you to all the speakers today. Just a terrific job.
This year’s event was sponsored by RCN Capital as a Host; Roc Capital as a co-host; CoreVest, Express Capital Fundingand Residential Capital Partners as corporate sponsors; and HomeRiver Group and SmartRent as partner sponsors.