Last week, representatives from DLP Direct Lending Partners attended the IMN Single Family Rental Investment Conference in Scottsdale, Arizona. The event draws thousands of real estate professionals spanning the areas of REITs, funds, aggregators, fix and flippers, note buyers, and institutional investors.
Some current hot topics in the single family rental market that our team discussed with peers at the event include:
There is a general softening in the investor market for fix and flip deals.
A reduced inventory of potential fix and flip properties available, combined with an increase in investor competition, has been resulting in lower profits for investors. This higher demand has been pushing purchase prices up for investors, which in turn lowers the margin between total costs and sales price.
A demand for an advantageous rental refinancing program still exists.
Real estate investors still haven’t found the ideal solution for investment projects that they want to hold and rent after they have completed the rehab. The rental programs that currently exist from most lenders in the market require a significant amount of additional paperwork, another appraisal, and another closing with added fees and costs. The market is ripe for a lender who can put together a true “bridge to rental-refinance loan” that will enable investors to close once, and modify their loan from an interest-only bridge loan to a long-term principal and interest loan.
Demand for build to rent investments is growing rapidly.
Due to the compression of profit margins in the fix and flip market, many investors are shifting strategy to buy land, build new homes or multi-units, and then hold them for rental investments over time. Lenders are beginning to promote “build to rent” financing that enables these investors to acquire land, and build as quickly as possible.
If you are searching for a build to rent financing, contact DLP Direct Lending Partners to discuss how our ground-up construction line of credit program can help you reach your goals.