Way back in 2016 I predicted that this would be the last generation of “mom and pop” real estate investing. Yes “mom and pop” means you if you are reading this email.
I mentioned nearly 5 years ago that individual investors working with agents, wholesalers, and other investors to purchase one single family house at a time and leasing the property would become an outdated model.
Why?Wall Street has piles of cash and has yet to take advantage of the single family real estate market. Below is an article that hit my email this morning.
D.R. Horton Inc. built 124 houses in Conroe, Texas, rented them out and then put the whole community, Amber Pines at Fosters Ridge, on the block. A Who’s Who of investors and home-rental firms flocked to the December sale. The winning $32 million bid came from an online property-investing platform Fundrise LLC, which manages more than $1 billion on behalf of about 150,000 individuals.
The country’s most prolific home builder booked about twice what it typically makes selling houses to the middle class an encouraging debut in the business of selling entire neighborhoods to investors.
“We certainly wouldn’t expect every single-family community we sell to sell at a 50% gross margin,” the builder’s finance chief, Bill Wheat, said at a recent investor conference.
They, investment funds, are buying entire neighborhoods. Wall Street is grabbing as much real estate it can get its’ hands in to satisfy yield demanded by their investors. Pension funds, teachers retirement, police and fire, and directing their massive resources towards wall street to invest in main street.
It is going to become increasingly more difficult for the individual investor to remain competitive in this space. Our advantage is leveraging the buying power of The Mastermind to purchase properties that yield excellent cash flow and appreciation.
We have 7 spots for the month of April left for THE Mastermind. Reply to this email if you are interested.