Real estate investors are swooping in to buy homes: What it means for the housing market

Market Trends & Investment Landscape - Investors, ranging from small "mom and pop" investors to larger entities like private equity, REITs, and sovereign wealth funds, are actively purchasing single-family properties [2][3] - Investors who buy homes to flip or rent account for 30% of purchases of both existing and newly built single-family homes [1] - High interest rates (hovering just under 7%) are making it difficult for individuals to qualify for mortgages, driving demand for rental properties [5] - Renting a new house is now cheaper than buying in the largest 50 cities in the US [16] Homebuilder Dynamics - Homebuilders have excess inventory, creating opportunities for investors to purchase and help them improve profits [4] - Builder incentives are helping smaller investors get into the market [7] Investor Strategies & Advantages - Smaller investors can be more nimble than larger funds due to fewer restrictions and no investment committee mandates [9][10][11] - Smaller investors have access to funding sources like credit unions and 401k loans [6][7] - The business model for smaller investors involves buying, renovating, renting for 3-5 years, and then selling for capital gains [8][9] Kinloch Partners' Business Model - Kinloch Partners focuses on building brand new, larger (four and five bedroom) houses with high-end finishes for rent in Tennessee, Georgia, and South Carolina [14][15] - Kinloch Partners rents houses at roughly $1 per square foot [15] - Kinloch Partners provides high-quality rental houses to people who cannot afford to purchase them [17]