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» VISIT US ONLINE @ DSNEWS.COM 7 A look at facts you didn't know you couldn't live without Compiled by the DS News Staff TAKE A LOOK INSIDE THE NUMBERS By Phillip E. Comeau D ATA B I T S PRINCIPAL OF ERNST & YOUNG More than 3 million refinances have occurred since HARP's inception in 2009, according to the Federal Housing Finance Agency (FHFA). Home prices rose 1.2 percent in Q4 2013, according to the Federal Housing Finance Agency's (FHFA) home price index. AN EVOLVING ASSET CLASS WITH HUGE POTENTIAL PAGE 35 INSIDE THE JOURNAL // MOVERS & SHAKERS // ON THE WEB // THE APP SPECTRUM *On interest and dividend income only. Source: The Fiscal Times. FIVE MINUTES WITH Paul Nagai BEST STATES FOR TAXES FOR 2014* 1 Wyoming 4% 0% 2 South Dakota 4% 0% 3 Nevada 6.85% 0% 4 Alaska 0% 0% 5 Florida 0% 6% 6 Washington 0% 6.50% 7 Montana 6.90% 0% 8 New Hampshire 5% 0% 9 Utah 5% 5.95% 10 Indiana 3.40% 7% State State Income Tax State Sales Tax Ranking WORST STATES FOR TAXES FOR 2014* 1 New York 4% 8.82% 2 New Jersey 7% 8.97% 3 California 7.50% 13.30% 4 Minnesota 6.88% 7.85% 5 Rhode Island 7% 5.99% 6 Vermont 6% 8.95% 7 North Carolina 4.75% 7.75% 8 Wisconsin 5% 7.75% 9 Connecticut 6.35% 6.70% 10 Maryland 6% 5.75% State Sales Tax Ranking State State Income Tax Single-family rentals are rapidly evolving into an asset class with enormous untapped potential in investment, property management, and lending. Historically, small inves- tors—either ma-and-pa investors or small regional investors—have domi- nated single-family rentals. However, during the last three years, more than 300,000 single-family properties have been acquired by large regional investors and by institutional investors such as Blackstone's Invitation Homes, American Homes 4 Rent, American Residential Properties, and Colony Capital. ese investors are bringing profes- sional management to the industry in the areas of acquisition, renovation, and property management. Regarding lending, "a recent Wall Street estimate put potential financ- ing opportunities for the single-family rental industry as high as $1.5 trillion," according to Bloomberg. Data and technology have expedited this evolution. Companies like RentRange provide rental data to assist investors in determining where to buy and, what properties to buy, and monitoring the rental market once an acquisition has been made in an area. is type of data also aids the institutional lend- ers in evaluating and monitoring portfolios of single-family rentals. e Internet and technology such as the iPhone and iPad have made managing scattered site properties much more efficient than in the past. While the challenges of managing scattered-site, single-family rentals are more complex than the challenges of managing an apartment complex, the gap has shrunk consider- ably. Securitization of single-family rental is progressing at a brisk pace. Blackstone's Invita- tion Homes was the first with a $479 million in a pass-through securitization in late 2013. American Homes 4 Rent announced it would be doing a securitization in early 2014. ese securities should perform well provided they are underwritten with conservative debt ser- vice coverage and with realistic assumptions on maintenance costs; reserves for replacement; and turn frequency, time, and costs. Historically, 30 percent of REO properties needed substantial work and were sold "as is" to investors. However, during the recent crisis, this percentage swelled to around 40 percent as a result of substantial deferred maintenance and property preservation issues. e Con- sumer Financial Protection Bureau's (CFPB) recently enacted regulations regarding "no dual tracking" and "prohibited foreclosures" ensure that foreclosure times will be longer than pre-crisis levels and that a high percentage of Consolidation will take place similar to the consolidation in the apartment industry that started in the 1970s. CONTINUED ON PAGE 8

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