The single-family rental (SFR) and mortgage lending markets are seeing significant shifts. In a continued effort to keep a pulse on the landscapes, we recently attended two industry staples: IMN's 2024 Single Family Rental East Conference and MBA's 2024 Secondary & Capital Markets Conference.
Here's a quick breakdown of our key takeaways that we believe directly impact lenders and investors:
- Non-QM financing on the rise: Investors are increasingly utilizing non-QM loans, particularly for DSCR (debt-service coverage ratio) financing and bridge loans. This widens the pool of investable SFR opportunities.
- Softening rental market concerns: Many investors seeking strategies to mitigate potential impacts on their cash flow.
- Built-to-Rent boom: The growing inventory of built-to-rent units presents new investment options in the current market.
- SFR fund strategy shift: SFR funds are moving away from scattered-site acquisitions due to challenges achieving desired yields.
- Flipping activity stabilizes: Discussions suggest a stabilization or even decline in flipping activity, potentially indicating a maturing SFR market or challenges for short-term strategies.
- Coastal insurance concerns: Rising insurance costs in coastal areas are a major concern for investors, necessitating strategic adjustments.
- Non-QM market growth: The Non-QM market is thriving, catering to borrowers who don't meet traditional mortgage qualifications. This trend is expected to continue.
- Accessing home equity: The significant amount of untapped home equity presents a big opportunity for second-mortgage lenders.
- Focus on affordability: Lenders are committed to creating solutions for underserved communities and first-time homebuyers through reduced fees, special programs, and educational resources.
- Collaboration is key: Lenders and investors are both striving to streamline the borrower experience and reduce costs, aiming for "day-one certainty" for borrowers.
- Tech & AI transforming the industry: Data, technology, and AI are creating new opportunities for borrowers, lowering costs, and fostering transparency.
Here are some of the common pain points attendees addressed with us, where our expertise could provide solutions:
- Identifying optimal investment locations
- Streamlining property identification and underwriting
- Optimizing rent pricing and maximizing margins
- Proactively identifying and managing risk
Secondary & Capital Markets:
- Reducing costs and optimizing analysts' time
- Expediting valuation and mark-to-market processes
- Maximizing returns with real-time monitoring
Read our full takeaways article here
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