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Investing Giant to Double Down on Single-Family Home Buys

Investing Giant to Double Down on Single-Family Home Buys

by DeVore Design, September 9, 2020

Invitation Homes wants 88K more single-family homes in its portfolio. The company buys homes and rents them, with a business model that mimics a multifamily complex.

Invitation Homes, the nation’s largest single-family landlord, is reportedly ready to increase its offerings in the suburbs. With low mortgage rates and consumers’ increasing desire for more space, Invitation Homes says it is ready to add to the 80,000 single-family homes in its rental portfolio.

The company’s stock has risen 84% since the market’s low on March 23. The firm raised $448 million through a June share sale and plans to use two-thirds of that amount to purchase homes to add to its portfolio, Bloomberg reports.

“We can certainly handle much more scale on our platform,” says Dallas Tanner, CEO of Invitation Homes. “Is that two times our current footprint? Maybe.”

Invitation Homes was spawned following the foreclosure crisis, purchasing single-family homes in foreclosure and converting them into rentals. The company oversees its single-family rentals using a system similar to multifamily landlords.

The company resumed its purchases in June, reportedly focusing on properties in Phoenix, Seattle and other metro areas that had been growing prior to the pandemic. It’s also targeting suburbs closer to the city center. According to Bloomberg’s report, Invitation Homes is buying homes directly from builders and iBuyers.

The company says it is also working on a plan to purchase homes and rent them back to sellers.

“Investors of all sizes are really active, and everyone is after the same thing,” says Greg Rand, chief strategy officer at Renters Warehouse. “The result is that the market for entry-level housing is super tight.”

Source: “Invitation Homes Eyes Next 80,000 Houses as Suburbs Boom,” Bloomberg (Aug. 4, 2020)

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