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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 36 May 2025 C O V E R S T O R Y It's important to look at the microeco- nomic scale of each market, which is what we try to do. There are some markets we focus on where interest rates have virtually had no impact on properties, on the days on market. But as a whole, we're all aware that the interest rate increase has made homes less affordable for people, it's stagnated listings, and it's caused days on the market to slow down. There are not a lot of new properties coming to the market because people don't want to sell. However, with many investors focusing on build-to-rent communities and assets, interest rates have reduced cash-flow analysis on the properties because mortgage rates are higher. We've also seen that parallel at the same time with many of the builders because we have partnerships to provide inventory from many of the national builders. D.R. Horton, LGI, Lennar, Toll Brothers, Sentry—these are all teams we're working with that provide us with inventory. They also provide signifi- cant builder incentives exclusive to our community because we do volumes with them and we're able to negotiate pricing that we pass on to the investor. Because they have excess inventory right now, they're providing additional builder incentives to buy down interest rates. That allows investors to still have positive cash flow, or they can also have price reductions on homes. All that being said, we've seen a relatively small impact on the investor market because the builders are still motivated to provide unique buying opportunities that combat the higher in- terest rates that limit cash flow on these properties. Additionally, when we invest, we focus on the fundamentals of real estate investing. It's all about planning appropriately. Q: How can investors adapt to potential market downturns or regulatory changes affecting real estate investments? Lemaster: I don't think you could fully ever anticipate any changes if we don't know what's going to happen in the market, in the economy, in legisla- tion. But one thing that has held true for many years is that people need a place to live. And if you adhere to the fundamentals of focusing on areas where the numbers make sense, where there's a deficit of housing, where there's a diversity of employers, where you have tax and legislative favorable scenarios for landlords, that can set you up for long-term success. It's about focusing on the fundamen- tals of real estate, which is to buy assets where the income from the asset covers all your expenses and debt service. Then if you have reserves for the property and you're in an area that's positioned for success based on all the criteria we just talked about, that is going to set you up for success. Q: What role does technology play in your operations, and how do you see it shaping the future of real estate investing? Lemaster: So much is changing. If you think of 10 years ago, pre-Zillow, it was difficult to research a new market online. Unless you were flying out to an area to develop a team on your own, it was very difficult to build a portfolio in different locations throughout the country. That's changed a lot today, and that's a large part of what we do, to make it accessible for people to buy properties in areas and feel educated, confident, and familiar with the market, regardless of where they're located. Things are becoming so expedited even with property inspections today, with leasing to tenants, sometimes you don't even need the old-school process of walking someone through the house because you can have a virtual tour, or you can have cameras and lockboxes that you can remotely control. AI plays a significant role in the marketing aspect for leasing, for sales, for everything. A lot is changing, but today it's significantly easier to buy properties sight-unseen and from a distance and feel confident. "There are not a lot of new properties coming to the market because people don't want to sell. However, with many investors focusing on build-to-rent communities and assets, interest rates have reduced cash-f low analysis on the properties because mortgage rates are higher." —Zach Lemaster, Founder & CEO, Rent to Retirement