Single-Family Rental Investors Drawn to Click-and-Buy Strategies

February 4, 2020

Single-family rental investors are reportedly completing more of their transactions online to reduce time and cost. The trend is likely to get bigger with click-and-buy strategies becoming the future of real estate investing, the National Real Estate Investor predicts.

Investors may rely more on their agents to view the properties on their behalf. In-person inspections of a property may not be viewed as important when purchasing a single-family house for rent, says Douglas Bendt, president of Bendt Enterprises in Boulder, Colo.

After investors hire professionals in the market to assist with the transaction, “there’s no reason to physically travel to” it, Jeff Holzmann, CEO of IIRR Management Services, a crowdfunded real estate firm, told the National Real Estate Investor. Investors are turning to data to guide their decisions, and it’s making them more comfortable with proceeding with a transaction without seeing the property, housing analysts say. Online platforms like Roofstock have surpassed $2 billion in transaction volume since 2016. Others like OwnAmerica and HomeUnion are also rapidly growing platforms for investors.

“There is no doubt that more and more of residential housing transactions are moving online, and that trend will continue, especially as it becomes easier to fully digitize the experience,” Jake Fingert, general partner at Camber Creek, told the National Real Estate Investor. Camber Creek is a venture capital company that focuses on real estate technology. But the more complicated the due diligence is, the “higher the barrier to moving the full process online and the less likely major institutional investors are able to invest purely online.”

But those investors who use online platforms to complete transactions need to tread carefully, analysts warn. “As I’ve learned by managing the entire SFR portfolio of RealtyShares, I know firsthand how risky the space can be,” Holzmann told the National Real Estate Investor. “There are often complex laws in different states protecting the tenant. Foreclosures and evictions of non-paying tenants can get bogged down in court for years, costing a fortune. There’s no substitute for education and there are no free lunches. There’s also no such thing as a guaranteed investment, so investors need to be realistic about their expectations.”

Source: 
Are Click-and-Buy Strategies the Future of SFR Investing?” National Real Estate Investor (Jan. 20, 2020)