November 2021 – Page 3

Thinking of Investing in SFR?

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Here Are Three Ways That Data Can Help By Kevin Ortner Technology and access to data can help real estate investors make sound acquisition decisions. These days, almost every preliminary step of the investment process can be done online, including scouting out potential properties and estimating projected returns. Let’s look at some metrics that you will want to calculate when assessing potential investment opportunities and see which ones you will want to pay close attention to! In today’s booming housing market, most investors have one priority: finding a good deal. But how can you ensure that you secure the best deal possible? One that not only produces cash flow, but also generates the type of returns that you are looking for. Assumptions and gut feelings can help you scout out a potential market, or even find a prospective deal, but they will only get you so far. At the end of the day, successful investing is no accident – it all comes down to cold, hard facts; looking at local housing data, running the numbers, and assessing how profitable a potential property is likely to be. While today’s housing market is booming and there is a great deal of investor activity, in many ways, there has never been a better time to invest. Thanks to the wealth of tools and information that are available today, investors have access to extremely valuable data that they can use to assess the viability of individual investments and the health of the local housing market. Today, there is no need for guesswork and no excuse for not doing your homework upfront. What Do We Mean by Data? Simply put, data is the information that you need to make sound investing decisions. It means looking at the numbers, statistics, trends that are influencing the market and the price of a property. All these factors impact the property’s performance as a rental. For investors, successful investing hinges in large part on the ability to read the market. Supply and demand impact housing prices so it is important to have your finger on the pulse of microeconomic trends that may be impacting local housing prices. This will help you to determine whether it is a good time to buy, and if so, how much you should be willing to spend to get the returns that you are after. Let’s look at three significant ways that data and tech can help when it comes to securing an SFR investment. 1 » Calculating Long-Term Appreciation For most investors, housing appreciation is a big part of their investment strategy. Sure, you could invest for cash flow alone and some investors do, but many like to invest in areas where the price of the property is expected to increase significantly over time. While none of us can predict with absolute certainty what the housing market is going to do, housing is one investment that has produced excellent long-term returns over time. Nationally, housing prices have increased an average of $127.52K between 2000 and 2020, according to the Case Shiller/S&P National Home Price Index, and in the last year alone, they have gone up 18.4%. Zillow has them on track to increase another 11.8% by April 2022. When it comes to investing in SFR, appreciation varies considerably from market to market. It is important to investigate historical appreciation rates not only on a national level but in the area that you are thinking of investing in. You can look at this data on websites like Zillow. Analyzing what housing prices have done over the last ten or twenty years will give you an idea of how much housing is likely to increase in the future. You could also check out the Market Research Center at Renters Warehouse to see housing appreciation and other local economic factors as well. 2 » Calculating Your Projected Returns Once you have a potential property identified, you will want to calculate your projected returns to make sure they are in line with your investing goals. Companies like Trulia, Zillow, and Realtor.com offer a range of tools that can help you see what neighborhood trends are like, the average cost of homeownership in an area, the history of a property, and more. Home Union’s Neighborhood Investment Rating is another great tool that you can use to assess the health of a local market. Their neighborhood tool rates different markets between A+ and D, allowing you to see how well the area checks out for a potential investment. Here are four additional key analytics you will want to consider if you have a potential investment and housing market in mind. » Number of property sales in the areaFind this on Zillow. » Days on the marketSee Zillow’s days to pending data to find out. » Available inventoryTo find available inventory, take the number of houses for sale in your area and divide by the number of sales in the past 30 days. You can find this info on Zillow. » Rental return ratesSee how much your prospective property can rent for using Redfin’s Rental Estimate Tool. Then assess your projected returns. 3 » When You are Looking to Find an Investment Property Fast When it comes to scouting out potential investment properties, tech can help you find a property faster. Today, approximately 90% of home shoppers start their searches online, and for investment properties, it is safe to assume that the numbers are most likely similar. Investors can head over to websites that integrate with the MLS, meaning that properties can be viewed as soon as they hit the market. The Renters Warehouse Marketplace is one platform where investors can find properties that are for sale, including properties from the MLS. Another option is Entera, where you can find SFR investments across 24 markets. While they have been around for a while, it’s also worth mentioning automated valuation models (AVMs). AVMs are tools that quickly and efficiently calculate the estimated value of homes in a given area. Zillow’s tool,

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RCN Capital, a leading nationwide private lender specializing in providing financing for real estate investors, has announced that professional real estate investor and entrepreneur, Tim Herriage, will be joining the company as its new Executive Director of Retail Loan Development. In his role at RCN Capital, Herriage will be responsible for overseeing initiatives to strengthen RCN Capital’s direct to investor lending presence and increase retail sales. Additionally, Herriage will work to expand awareness in this area by developing and executing strategic initiatives with the goal of growing the retail lending channel. For two decades, Herriage has been on the leading edge of the Real Estate Investor space, with time spent as the Founder and Managing Director of Blackstone’s B2R Finance, the Founder of 2020 REI Group, the Founder of the REI Expo and as a Franchisee and Development Agent for HomeVestors® of America. “I have known Tim for nearly a decade, and over that time I have watched Tim build some of the most iconic brands in the private lending industry,” said Jeffrey Tesch, CEO of RCN Capital. “In addition, Tim served our country admirably in our armed forces where he honed his tremendous leadership skills. The RCN Capital family could not be more proud to bring on an entrepreneur who embodies the RCN Capital culture and work ethic that has propelled our firm and its employees to the forefront of the private lending industry.” Herriage has also personally completed well over $1B in real estate investment transactions, including the acquisition of more than 2,000 houses in his twenty-year career, and will use his background and unique perspective of the space to jumpstart RCN’s organizational initiatives in 2022. About RCN Capital RCN Capital is a South Windsor, CT based national, direct, private lender. Established in 2010, RCN provides commercial loans for the purchase or refinance of non-owner occupied residential and commercial properties. The company specializes in new construction financing, short-term fix & flip and bridge financing and long-term rental financing for real estate investors. For more information on RCN Capital and RCN’s loan programs, visit www.RCNCapital.com.

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Tricon Residential Inc. (TSX: TCN) (NYSE: TCN) (“Tricon” or the “Company”), an owner and operator of single-family rental homes and multi-family rental apartments in the United States and Canada, provided an update on its active build-to-rent community pipeline, which has now expanded to over 3,000 rental units in 23 new home communities across the U.S. Sun Belt. The communities are under development or under contract to be developed within Tricon’s existing single-family rental investment vehicles THPAS-JV1 and Homebuilder Direct JV, and are being built by a number of national and regional homebuilders including four of the top 25 largest homebuilders in the United States. Tricon has always been committed to increasing access to high-quality housing options for American families and believes this can be accomplished in part through the construction of new purpose-built single-family rental communities, within close proximity to excellent schools, parks, neighborhood retail centers, and major job nodes. The planned communities are targeting the middle market resident demographic and are located in high-growth Sun Belt states, aligning with Tricon’s broader single-family rental strategy. The communities consist predominantly of single-family detached homes with 3 – 4 bedrooms and two or more bathrooms, and typically have access to a range of resident-centric amenities including community parks, pools and recreational areas. “COVID-19 has cast light on the shortage of affordable housing options across the U.S.,” said Gary Berman, President and CEO of Tricon Residential. “At Tricon, we are committed to expanding the supply of accessible, high-quality housing for families who are seeking a single-family home and prefer the convenience and flexibility of a rental lifestyle. We are also focused on building sustainable communities that enrich the lives of our residents and the local neighborhoods they live in, which is central to our corporate strategy and our Environmental, Social and Governance (“ESG”) priorities. Our build-to-rent pipeline makes a positive contribution to alleviating America’s housing shortage, while stimulating local economic growth and catering to the needs of modern residents.” The 23 communities are located across ten MSAs, including: Texas (Dallas-Fort Worth, Houston, Austin, and San Antonio); California (Sacramento and Inland Empire); Phoenix, Arizona; Jacksonville, Florida; and Reno, Nevada. Tricon is currently on track to have over 600 new homes in these communities constructed and available for rent by the end of 2022, with the full pipeline expected to be delivered by the end of 2024. The homes will feature convenient and controlled access through Tricon’s smart home package, which includes smart locks, door sensors, smart thermostats, energy-efficient HVAC systems, leak detection systems, as well as high-efficiency ENERGY STAR® certified appliances. Using its technology-enabled operating platform, Tricon aims to deliver an exceptional resident experience within these rental communities, from leasing and maintenance to community activities and ancillary services. About Tricon Residential Inc. Tricon Residential is an owner and operator of a growing portfolio of approximately 35,000 single-family rental homes and multi-family rental apartments in the United States and Canada with a primary focus on the U.S. Sun Belt. Our commitment to enriching the lives of our residents and local communities underpins Tricon’s culture and business philosophy. We strive to continuously improve the resident experience through our technology-enabled operating platform and innovative approach to rental housing. At Tricon Residential, we imagine a world where housing unlocks life’s potential. For more information visit www.triconresidential.com.

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FlipOS, a tailor-made platform designed for individual real estate investors and institutional buyers who want to outsource their business’s asset scouting and renovation functions, announced it received $136 million Series B round to finance its platform. Stoa USA Inc., the world’s first technology-based Business to-Business (B2B) iBuyer and creator of FlipOS, announced it received a $36 million equity investment from Zeev Ventures, along with a $100 million securitization deal led by Cantor Fitzgerald, the preeminent global financial services firm and real estate investment company. Tom Sella, Co-Founder and President of Stoa said, “By partnering with local investors, FlipOS will both double the housing pipeline and reduce the time-to-flip a home by 80 percent. We’re able to offer institutional investors thousands of deals that are rent-ready and geared to deliver a return on investment from day one.” “The Stoa team figured out a way to optimize the entire professional iBuyer process from property funding, through renovation, to sale, in a way that makes a real impact on the amount of single-family homes available for purchase or rental,” said Oren Zeev, founding partner of Zeev Ventures. “I’m incredibly excited to join Stoa’s journey in becoming the market leader in the iBuyer space.” “The support from our new and existing investors is a testament to our exponential growth and reflects the promise of our unique approach to iBuying,” said Or Agassi, chief executive officer of Stoa. “With this financing, we plan to hire top talent, expand into new U.S. locations, and further establish FlipOS as a marketplace leader.” Stoa recorded over $20 million in revenue since the company’s launch at the beginning of 2021. The company’s Stoa finances the projects, scopes the renovations, and warehouses the properties for a buyer. The company also ensures assets are renovated to exact, high-quality, fit-for-purpose homes, known as “Good Homes®.” About StoaFounded in 2018 and based in Phoenix, Arizona, Stoa USA Inc. is a property technology company and one-stop-shop for real estate investors. The company’s proprietary platform, FlipOS, is designed to help real estate investors buy, renovate and sell homes more efficiently. For more information, visit flipos.com.

Inflation Remains Primary Macroeconomic Concern

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Mortgage Rates Expected to Drift Northward to 3.5 Percent by 2023, Due in Part to Likely Monetary Response to Inflationary Pressure Inflation is a key forecast concern for the economy, according to the November 2021 commentary from the Fannie Mae (OTCQB: FNMA) Economic and Strategic Research (ESR) Group. The ESR Group’s expectations for inflation were upgraded meaningfully in the near term to average 6.2 percent on an annual basis in the fourth quarter. The forecast anticipates the recent price gains to begin to moderate over the coming quarters as temporary factors begin to wane, but the build-up of stronger, underlying inflationary pressure suggests that inflation will remain significantly above the Federal Reserve’s two percent target through 2023. The Fed is therefore expected to begin hiking its target rate in 25-basis-point increments beginning in Q4 2022. However, if inflation continues to exceed expectations, there is increasing risk that the Fed will begin raising interest rates even earlier. The principal risks to the forecast remain the pace of global supply recovery, the availability and cost of labor, and the extent of Federal monetary and fiscal largesse. The ESR Group also published for the first time its expectations for 2023 real gross domestic product (GDP) growth, which it projects at 2.1 percent, very much in line with the pre-pandemic domestic growth trend. Over the next few quarters, the forecast expects the primary drivers of growth to be inventory restocking by businesses and increased spending on services by consumers. Expectations for full-year 2021 and 2022 economic growth remained largely consistent this month, with 2021’s projection revised downward by 0.1 percentage points to 4.8 percent and 2022’s projection revised slightly upward by the same amount to 3.7 percent. “The Fed is in motion, pushed by inflation running ahead of their forecasts and looking less transitory than they had anticipated. They left themselves some room for policy change by committing to the speed of tapering assets for only two months, where adjustments could be made thereafter,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Economic growth continues to slow, but not precipitously; and as rates have not yet reacted strongly, housing and mortgage activity remain very strong. Market participants will have one eye on the monthly inflation releases and the other eye on the Fed in the months ahead. How credible investors, business leaders, and consumers find the Federal Reserve’s evolving beliefs regarding the passing or sustained level of inflation and resulting monetary policy actions will be key – their choices will impact economic growth as well as housing and mortgage activity.” On housing, the ESR Group revised upward its expectations for 2021 home sales but downward its projection for 2021 home construction. While mortgage demand remains strong, homebuilding continues to be constrained by supply chain bottlenecks and a lack of specialty trade labor, although the ESR Group expects some of those constraints to ease in the coming months, enabling 4.8 percent growth in single-family home starts and 13.9 percent growth in new single-family home sales in 2022. With regard to mortgage originations, the ESR Group expects purchase volumes to total $1.9 trillion in 2021 followed by 6.8 percent growth in 2022 to $2.0 trillion. Refinance volumes of $2.5 trillion are projected in 2021 before slowing in 2022 and 2023 to $1.3 trillion and $1.1 trillion, respectively. Finally, owing in part to the expectation that the Fed will begin to raise interest rates later next year, the ESR Group expects the 30-year fixed mortgage rate to average 3.3 percent in 2022 and 3.5 percent in 2023. Visit the Economic & Strategic Research site at fanniemae.com to read the full November 2021 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, Housing Forecast, and Multifamily Market Commentary. To receive e-mail updates with other housing market research from Fannie Mae’s Economic & Strategic Research Group, please click here. Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic & Strategic Research (ESR) group included in these materials should not be construed as indicating Fannie Mae’s business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management. About Fannie MaeFannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of people in America. We partner with lenders to create housing opportunities for people across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit:fanniemae.com | Twitter | Facebook | LinkedIn | Instagram | YouTube | Blog Fannie Mae Newsroomhttps://www.fanniemae.com/news

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New Brand Represents Company’s Strategic Focus on Delivering Innovative Solutions, Data-Driven Intelligence and the Capital Real Estate Investors Need to Scale LendingHome, one of the nation’s largest lenders to real estate investors (REIs), announced that it has officially completed its rebrand to Kiavi as part of a larger strategic initiative. The new brand reflects the company’s commitment to help real estate investors realize the full potential of their real estate investment strategies. Under the new brand, Kiavi will continue to deliver innovative solutions to help REIs tackle persistent challenges facing the real estate industry. Kiavi’s critical data-driven insights, timely access to capital and industry expertise will further empower real estate investors to scale their business and make informed decisions. “I am thrilled to announce the rebranding to Kiavi. Kiavi represents our focus and commitment to help our customers throughout the real estate lifecycle, and I am excited to kick-off this new chapter,” said Michael Bourque, CEO of Kiavi. “We face a chronic housing shortage in the U.S. With the cost of raw materials rising and a lack of move-in-ready homes, the dream of owning a home is becoming a challenge for many Americans. Our customers, real estate investors, are helping bridge the gap by revitalizing neighborhoods and rehabilitating homes across the country,” Bourque added. “We recognize that it can be challenging for our customers, particularly in the current environment, to evaluate their investment strategy. We hope that with our technology and insights we will be able to help our customers maximize the full potential of their investments.” For over a decade the U.S. housing market has struggled to keep up with the demands of potential home buyers. While the need for turnkey homes is growing, over 65% of American homes are over 30 years old. With more than $7.8B in loans funded and over 35,000 projects to inform the development of Kiavi models, Kiavi can help real estate investors supplement their own local market knowledge to make better, more informed decisions. Visit Kiavi’s new home here. About Kiavi Founded in 2013, Kiavi, formerly known as LendingHome, is one of the largest lenders to real estate investors in the United States. With Kiavi’s data and innovative financing solutions, real estate investors are empowered to make informed decisions, close deals faster and realize the full potential of their real estate investment strategies. Kiavi is committed to helping customers revitalize approximately $25 trillion worth of aged U.S. housing stock and provide move-in ready homes and rental housing for millions of Americans across the country. For more information, visit www.kiavi.com, and follow us on Twitter. NMLS ID #1125207