Blog Insights

In the fast-evolving landscape of real estate investment, the dynamism of the Single-Family Rental (SFR) market has captured the attention of seasoned professionals and institutional investors alike. Amid this fervent environment, the emergence of a groundbreaking partnership within the Private Client Group has redefined the narrative of portfolio financing solutions. The Private Client Group, a consortium of seasoned real estate professionals, has set its sights on elevating the SFR capital markets through its commitment to deploy over $3 billion in capital for SFR portfolios. This ambitious endeavor has been made possible through a strategic alliance with one of the largest Global Asset Managers in the country. A shining example of this collaboration comes from the sponsorship of one of the fastest-growing U.S. SFR investors, a global real estate private equity group boasting an impressive portfolio of over $23 billion in transactions. What sets this sponsor apart is not just its sheer magnitude but its trailblazing history in real estate investments. Founded in 1994, this sponsor made its mark as one of the pioneering non-domestic real estate investors in Asia. Its investments tell the tale of visionary ventures—ranging from a sprawling 3.8-hectare shopping center development in Tokyo to spearheading one of the largest solar power plants in Japan. Their expansive footprint extends across various lucrative assets including hotels, offices, and retail properties nestled in the heartlands of China and Japan. What truly underscores the depth and breadth of their influence is the global imprint they’ve etched, with over 100 employees dispersed across offices in the U.S., Europe, Japan, and China. Their multifaceted approach blends intricate deal structuring with a keen understanding of market dynamics, distinguishing them as formidable players in the realm of real estate investment. This collaboration between the Private Client Group and this distinguished sponsor signifies a paradigm shift in the SFR market. It aligns the expertise of a seasoned team with the financial muscle of a global asset manager and the visionary prowess of a pioneering investor. Their shared vision transcends mere financial transactions; it’s a testament to their commitment to revolutionize how SFR portfolios are conceptualized, structured, and propelled towards unprecedented success. Central to this narrative is the sponsor’s trailblazing SFR investment platform, launched in 2020 to seize the untapped potential of the U.S.-based SFR market. Since its inception, this platform has been nothing short of revolutionary, exemplifying a commitment to innovation and foresight in investment strategies. The platform’s accomplishments speak volumes, with investments surpassing 2,400 homes at a staggering total cost exceeding $600 million. These investments sprawl across nine states and encompass 17 Metropolitan Statistical Areas (MSAs), strategically positioning the sponsor at the heart of thriving real estate markets. What distinguishes this SFR investment platform is its composition—a meticulous curation primarily consisting of newly built townhomes and duplexes nestled within meticulously planned Build-to-Rent (BTR) communities. This unique focus on curated portfolios underscores the sponsor’s commitment to innovation and foresight in investment strategies, shunning the conventional in favor of pioneering new avenues. The sponsor’s acquisition strategy is as multifaceted as it is forward-thinking, encompassing both the purchase of completed homes and the groundbreaking approach of building from the ground-up. This multifaceted strategy not only diversifies their portfolio but also positions them as trailblazers in the realm of SFR investment. The emphasis on newly built properties within planned BTR communities reflects an acute understanding of evolving market demands and a commitment to providing high-quality, in-demand housing solutions. This strategy not only speaks to their financial prowess but also to their dedication to fostering communities and meeting the evolving needs of the modern-day tenant. The synergy between the Private Client Group and this forward-looking sponsor is not just a confluence of financial expertise but a testament to shared values of innovation, strategic foresight, and a steadfast commitment to reshaping the SFR landscape. Together, they stand on the precipice of transformation, leveraging the sponsor’s visionary SFR investment platform and the Private Client Group’s seasoned acumen to carve a path towards unprecedented success. In an industry characterized by evolution, this partnership serves as a beacon, heralding a new era of SFR investment—one defined by innovation, foresight, and an unwavering dedication to excellence. It’s not merely a collaboration; it’s a proclamation of intent—a promise to redefine the norms, set new standards, and shape the future of real estate investment.

In the world of real estate, equity is king. Every homeowner, at one time or another, has pondered ways to extract more value from their most cherished asset. With the glittering horizon of Philadelphia serving as a backdrop, one emerging trend is captivating those in-the-know: the strategic overhaul of a property’s outdoor space to fortify its market worth. Companies like Terren Landscapes, nestled in the lush suburbs of Philadelphia, are pioneering a nuanced approach, illustrating that the road to unlocking home equity might just be paved with well-appointed cobblestones. The principle is simple yet ingenious. By investing in landscape design and installation, homeowners are not merely beautifying their domains, but they are directly augmenting their home’s intrinsic value. 1.  Return on Landscape Investments A report by the National Association of Landscape Professionals suggests that homeowners can expect a return of over 100% on landscaping investments. To put that in perspective, consider the ROI on other popular home improvement endeavors—like remodeling a kitchen or bathroom, which can often garner a return of anywhere from 60% to 120%. This promising prospect has prompted homeowners, particularly in affluent regions, to team up with high-caliber companies. The objective? To reimagine their outdoors into a realm where functionality fuses with artistry. 2.  Beyond the Aesthetic Appeal But the pull of landscape installations isn’t limited to its aesthetic allure alone. Thoughtful landscaping offers tangible financial benefits in the guise of energy savings. Properly placed trees and shrubs can act as natural insulators, reducing heating and cooling costs. Moreover, a well-maintained landscape can bolster a property’s drainage system, mitigating risks associated with water damages—a solution that can sometimes lead to lower home insurance premiums. 3.  Drawing Potential Buyers In the frenetic realm of real estate, first impressions can make or break a deal. A property enveloped in a cloak of vibrant blooms, cascading water features, and impeccably manicured lawns can intrigue potential buyers, even before they step through the front door. It’s a silent testimony to the homeowner’s commitment to quality and care. This sentiment is echoed by Terren Landscapes, which has, over the years, sculpted some of the most breathtaking outdoor living spaces in the Philadelphia region. Their handiwork stands as a testament to how landscape installations can be a nexus of art and investment. 4.  The Financial Landscape As homeowners set their sights on landscape redesign, many are leaning on real estate loans tailored for home improvements. These loans, often with competitive interest rates, serve as a financial conduit, allowing homeowners to realize their vision without draining their coffers. Lenders, recognizing the potent ROI of landscape installations, are more amenable to underwriting such ventures. It’s a harmonious dance between homeowner ambition and financial pragmatism. 5.  A Sustainable Vision Beyond the immediacy of monetary returns, there’s an intangible yet profound allure to landscape installations—the promise of sustainability. Companies, cognizant of the changing environmental narrative, are weaving in green practices. From rain gardens that prevent water runoff to native plants that demand less water and care, the focus is clear: curate a landscape that’s both exquisite and ecologically responsible. As the sun sets over the skyline of Philadelphia, casting a golden hue on its sprawling suburbs, it’s evident that the city and its environs are on the cusp of a landscaping boom. A movement championed by visionaries like Terren Landscapes, reminding us that our homes’ true potential might just lie in the world outside our windows.

What is Build-to-Rent?  Build-to-rent (BTR) is a real estate investment approach centered around the construction of purpose-built rental properties, such as apartment complexes or housing communities, with the primary intent of generating rental income. In contrast to traditional real estate development, which often involves selling individual units or homes, BTR focuses exclusively on creating rental units. This strategy is gaining in popularity due to the rising demand in the rental market from buyers turning towards renting due to affordability concerns.  Build-to-Rent (BTR) Increasing Demand  According to Fixr.com’s “Build-to-Rent Homes Report 2023” The National Association of Homebuilders estimated that “69,000 BTR homes began construction in 2022.” Fixr goes on to predict that this number is slightly higher due to the construction of homes sold to other parties specifically for rental purposes, totaling this estimate to actually be closer to 119,250.  The chart below showcases an over 50% increase in build to rent starts over the course of five years.  Reported by Fixr.com based data from the Census and National Association of Homebuilders (NAHB). Who is Driving this Build-to-Rent Demand? According to the report, demand for BTR homes is split between Gen Z (55%) and Millennials (41%).  Tenants in these age demographics prefer the lifestyle opportunities that BTR properties can provide. Because purchasing a home may be unaffordable for many, the option and flexibility that comes from renting one of these BTR properties is much more attractive. There are no maintenance costs, no mortgages to pay, and the community amenities and benefits without the added price tag of home ownership.  Where is Build-to-Rent Demand the Highest?  According to data provided by RentCafe, Phoenix, Arizona tops the list for the most tenants moving into 6071 rental properties in the last five years, increasing from 2168 units in 2017 to 8239 units in 2022. Charlotte, North Carolina however had the highest percentage growth for BTR units in five years at 621%. Below are the top 20 areas with the most BTR units, with Phoenix, Dallas, Detroit, Houston, and Atlanta making the top five.  Top 20 Metros with the Highest BTR Units Built Over the Past 5 Years Reported by Fixr.com based Yardi Matrix data.   The growing build-to-rent market offers real estate investors lucrative opportunities to capitalize on for their next investment property purchase. LendingOne’s Private Client Group offers investors in this market customized financing options such as a Bridge-to-Permanent Loan and a BTR CO Bridge Loan. Learn more here. 

Demand in the single-family rental market has been increasingly on the rise. As housing prices continue to climb and inventory is unable to keep up with the growing demand, potential buyers are shifting their focus more towards renting.  John Burns Research & Consulting recently released their Single-Family Rental Survey reporting on the current metrics surrounding the SFR market. They surveyed over 234K owners of professionally managed SFR homes across 52 markets in the first half of August.  According to the report, the SFR market has stabilized in recent quarters from the cooling-off period the country experienced following the pandemic boom. They are seeing a national blended SFR rent growth holding steady at 6.5% from Q1 to Q2 of this year, and new lease growth has increased from 7% to 8% nationally from Q1 to Q2. Additionally, operating expenses have grown nationally, causing an offset in rent gains.  We outline our top three takeaways from the report for real estate investors interested in the current state of the single-family rental market.    1. Blended SFR Rents Are the Fastest Growing Asset Class  The survey reports that national blended SFR rent growth (7% YOY) exceeds apartment rent growth (2% YOY) and new and resale home price appreciation (1%-2% YOY). Overall, blended SFR rents were reported to be growing faster than other asset classes like new home and apartment markets or the resale market.  Sources: Reis Services, LLC; Census Bureau; Moody’s Analytics; Burns Home Value Index™ (BHVI); Atlanta Federal Reserve Board Wage Growth Tracker; Blended single-family rent growth as published in the Burns Single-Family Rental Market Index.   2. Average Rent Prices Nationally Reached $2,054 in Q2  The report states that approximately half of respondents reported average rents of $1,750 – $2,250, resulting in a national average rent of $2,054 in Q2.  Northern California had the highest weighted average monthly rent at $2,900, with the Midwest averaging the lowest at $1,700. Northern Florida rents averaged $2,100, a higher average rent than the Southeast region’s $1,750.  Source: John Burns Research and Consulting, LLC (Data: 2Q23, Pub: Aug-23)   3. Occupancy is at an All-Time High (97% Average)  According to the survey, operators reported a 97% average occupancy rate nationally, with 13% of operators seeing 99%-100% occupancy across their portfolios.  Overall, occupancy rates were up significantly from Q2 (95%) to Q1 (72%). Northern California held the highest occupancy rate at 99% with Southern California, Southern Florida, and the Northwest following at 98%.  Source: John Burns Research and Consulting, LLC (Data: 2Q23, Pub: Aug-23)   This growing single-family rental market offers real estate investors lucrative chances to scale their portfolios and increase revenue. LendingOne offers a variety of rental loan products that can provide the necessary financing options investors need. Click here to learn more.

For real estate investors seeking to turn distressed properties into lucrative opportunities, fix and flip loans are an essential tool. This specialized financing option is designed to support fix and flip investors’ strategy, allowing them to purchase rundown properties, renovate them, and sell for a profit. In this comprehensive guide, we will explore all aspects of fix and flip loans, their benefits, and how they empower investors to thrive in the competitive real estate market. What Are Fix and Flip Loans? Fix and flip loans, also known as rehab loans or hard money loans, are short-term financing options tailored specifically for real estate investors pursuing fix and flip projects. Unlike traditional mortgages that focus on long-term property ownership, these loans cater to the unique needs of investors seeking swift returns on their investment. Fix and flip loans are secured by the property being renovated, making the process efficient and accessible for experienced and novice investors alike. The Benefits of Fix and Flip Loans Quick Access to Capital: Fix and flip loans offer quicker approval and funding, enabling investors to seize time-sensitive opportunities in the real estate market. With a simplified application process, investors can access the necessary capital to purchase distressed properties and begin renovations promptly. Short-Term Loans: These fix and flip loans typically span from six to twelve months, aligning with the quick turnaround strategy of fix and flip projects. Investors can execute renovations and sell the property within a relatively short timeframe, recouping their investment capital and profits fast. Minimal Credit Requirements: Fix and flip loans prioritize the property’s potential for profitability and the investor’s experience rather than relying heavily on credit scores. This leniency opens doors for more investors to leverage opportunities. Higher Loan-to-Value (LTV) Ratios: Fix and flip loans often boast higher LTV ratios compared to traditional mortgages. Lenders finance a substantial portion of the property’s purchase price and renovation costs, reducing the need for a significant upfront capital investment. Flexibility in Property Types: Fix and flip loans can be used to finance a wide range of property types, including single-family homes, multi-unit buildings, and commercial properties. This versatility empowers investors to explore various market segments. Applying for a Fix and Flip Loan Research Lenders: Begin by researching reputable fix and flip lenders who specialize in short-term financing. Consider their interest rates, loan terms, and customer reviews to make an informed decision. Preparing Documentation: Gather the necessary documentation, such as property information, renovation plans, financial statements, and personal background, to support your loan application. Loan Application Process: Fill out the loan application form and submit all relevant documentation to the lender. A fix and flip loan typically involves a faster approval process compared to traditional mortgages. Maximizing Success with Fix and Flip Loans Conduct Thorough Market Research: Before embarking on a fix and flip project, conduct comprehensive market research to identify profitable locations, emerging trends, and potential buyers. Create a Detailed Renovation Plan: Develop a detailed renovation plan and budget to ensure a smooth execution of the project. Stick to the plan to avoid cost overruns and delays. Build a Reliable Team: Assemble a team of experienced contractors, real estate agents, and other professionals who can contribute to the success of your fix and flip project. Time Management: Efficiently manage the timeline of your fix and flip project to meet deadlines and capitalize on market conditions. Conclusion Fix and flip loans are a game-changer for real estate investors seeking to capitalize on distressed properties and maximize their returns. With their quick approval process, short-term durations, and flexibility in property types, fix and flip loans empower investors to thrive in the dynamic real estate market. By conducting thorough research, preparing necessary documentation, and building a reliable team, investors can unlock the full potential of fix and flip loans and achieve success in their investment ventures. Looking to invest in your next fix and flip property? Learn more about our fix and flip loans with competitive rates, low fees and high leverage options for real estate investors. 

Despite challenges in the market for real estate investors, according to ATTOM’S Q1 2023 U.S. Home Flipping Report, fix and flip activity remains high across the country as profits and returns for flippers show signs of improvement. Key Highlights from the Report for Fix and Flip Investors:  ATTOM reported that 72,960 U.S. single-family homes and condos were flipped in the first quarter, representing 9 percent of all sales. This number decreased from 9.4 percent of home sales in Q1 of 2022, but it was still up from 8 percent in Q4 2022, hitting the second-highest level this century.  Flipping activity did rise, according to their research, but mixed trends resulted for raw profits and profit margins, with both figures increasing slightly from end of last year to beginning of this year but remaining near low points over the last decade.  Although lower than last year, improvement was seen in the gross profit on transactions nationwide, increasing to $56,000 in Q1 2023, and total profit on flips nationwide was up 4.7 percent from $53,500 in Q4 2022.    Metros with the Largest Flipping Rates in Q1 2023: According to ATTOM’s research, from Q4 2022 to Q1 2023, of the 74 percent of U.S. metro areas analyzed, home flips as a portion of home sales increased.    Highest Flipping Rates for Counties with 10 or More Home Flips: The report goes on to state that home flips represented a minimum of 10 percent of all home sales in 36 percent of the U.S. counties analyzed during Q1 2023. This figure surpassed the 21 percent recorded in Q4 2022.    Top 10 Zip Codes with Highest Flip Rates Q1 2023: ATTOM concluded their report with the list of top 10 zip codes with the highest home flipping rates in Q1 2023. This includes ZIPs with 5 or more home flips recorded in the first quarter of this year. Gila Bend, Arizona made the top of the list at 62.5%.  Whether you’re a seasoned investor or just starting out, understanding the dynamics of this current real estate market can provide you with a competitive edge and maximize your profitability, especially when deciding your next strategic investment opportunity.  Looking to invest in your next fix and flip property? Learn more about our fix and flip loans with competitive rates, low fees and high leverage options for real estate investors.