Retail investors and local landlords offer real estate agents a wide array of options for staying active in a market bereft of traditional inventory, you simply need to know how to connect with them.
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There’s been a good deal of attention paid to corporate entities buying up single-family homes for the purpose of putting them under long-term rental management.
While build-to-rent and Wall Street interest in residential neighborhoods is happening, the collective impact is not yet great enough to upset the economic flow of the housing market. Still that fact doesn’t help agents who are short on business in this oddly healthy but nevertheless stagnant market.
There is business to be found in the SFR (single-family rental) investment market, agents need merely know where to look. New Western, has operated an online search experience for value-add properties (homes needing work) for a number of years, relatively under the radar since 2008.
New Western’s robust investor marketplace serves up homes around the country ripe for turn-around — tear-downs, fix-and-flips, long-term holds — that are found and assessed by a team of more than 800 acquisition specialists. These are licensed agents given autonomy to identify and move on behalf of New Western on a wide range of homes ideal for local landlords. Depending on the property, many can make ideal first-time real estate investments.
Value-add homes are often found in a segment of the market that most agents tend to avoid for obvious reasons. Properties in this category are hard to market to a traditional single-family buyer. Handyman specials are often much more than that and are rarely as simple to glow up as HGTV makes them out to be. New Western’s customers are the ideal match for the ex-hoarder’s home, or the oddly divided duplex. But it’s also great for investors who want well-managed, ready-to-go SFRs.
The website is simple in nature, offering a basic search experience with a map view, full-listing breakdown, as many documents as the company can track down, tax histories and comp reports. There’s nothing here you haven’t seen before, except for maybe the house being offered. In fact, that’s how New Western prefers it, as its audience usually already knows what these houses are going to need to produce a return, and it’s not a Walk Score.
The company asks that its buyers are qualified, not accredited, the latter term being an official verification of an investor’s income and net worth, with $200k being the entry point. New Western asks that its investors be serious, though. No tire kickers, please. And this is where agents can play a role in working with New Western, by working with aspiring investor clients to determine their willingness to invest and what strategy best overlaps with their wealth-building goals.
Gone are the days when agents offer value by (with)holding listing information. Today’s agent needs to create value by way of consultation, by knowing what to do with the data clients are finding on their own.
Other solutions to the inventory crisis:
- Homebldr: This technology company that initially focused on helping brokers function as iBuyers has shifted into investment education. Its solution is designed to assist agents in working with investor clients, allowing them access to in-depth property reports, after-repair value forecasts, location analytics and financing options. Its new model is ideal for the early-stage home investor and if combined with New Western’s long-established and very active marketplace, could greatly benefit commission-starved agents.
- Fractional: The communal investing platform reviewed by Inman earlier this year is gaining momentum for its crowd-sourcing of investment opportunities. The National Association of Realtors participant offers a vehicle for like-minded group members to find each other and investment properties, create public proposals and assemble a final team of investors to purchase them.
–The process involves extensive supporting information, multiple Zoom meetings and communications to ensure the team is aligned, an operating agreement, the creation of an LLC and collection and processing of deposits and investment oversight. An agent’s local knowledge is a great resource for group members participating from afar, and Fractional can provide agents with their own education on what the investor market is seeking, what its collective concerns are, what property types attract them and what markets present opportunities. In short, Fractional is a much, much better way to spend time in a social environment than monitoring a Facebook listing post for likes.
- Ark7: This is a mobile and browser application helping accredited and non-accredited investors invest in real estate. The company buys rental property (primarily single-family but some multifamily) under an LLC and sells shares of that entity at varying prices determined by the investor’s comfort level.
- Groundfloor: This company has been in the low-barrier-to-entry investment game for some time, too, enabling anyone to invest in mortgage debt. The Atlanta-based company invests in residential rehab projects, allowing people to invest nominal amounts to fund loans that investors use to buy and rehab properties. The company positions itself as an alternative to hard-money lending.
- Artificial intelligence took center stage at Inman Connect Las Vegas last week. Panels on social media brand-building and how to unearth new listings amid a notable inventory shortage were also popular.
Thankfully, the buyers who peruse New Western’s site don’t need a 3D tour or AI-assisted descriptions. And to them, “inventory” is a subjective term. There is plenty of it out there or the agents who know where to look.