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» VISIT US ONLINE @ DSNEWS.COM 57 ties we supply to investors have established our presence within the real estate market. rough our innovative contributions to technological resources, we hope to encourage investors to take advantage of rental demands, and, thereby, foster their success in this ever-changing market. INVESTMENT GREG RAND CEO, OwnAmerica In 2017 it will become clear to anyone paying attention that SFR is a new industry, separate from the homeownership industry underpinned by the MLS, and separate from the commercial real estate business. Something new, despite being something old. is sector is massive, no matter how you measure it. NAR states that is represents an av- erage of 22 percent of all home sales annually. e national housing database that has been indexed and measured by the nation's major title insurance companies counts it at over 16,000,000 units. Apply that to the Census, and you find that SFR shelters more than 12 percent of US households. Despite the fact that SFR has been in place since the founding of our country, the industry is still in its formative stages. Innovations in technology, data, and professional management systems that were hastily built for the insti- tutional trend have laid the groundwork for a "new" real estate industry. SFR as a product: A major breakthrough in understanding SFR came in 2016 when research revealed an uncanny balance between demand and supply. It is now understood that of the roughly 1,000,000 investor home pur- chases every year, where 800,000 are bought to hold, the vast majority are purchases of vacant homes that are turned into rentals. It has also been estimated that of the 16,000,000 rental homes in the U.S., about 5 percent are assumed to turn over every year. ose rental homes have typically been vacated in order to be sold. So, something like 800,000 landlords vacate rentals each year to sell them, and 800,000 investors buy vacant homes each year and rent them out. Almost a perfect match, if someone would just match them up. SFR as a technology business: A few platforms were introduced in 2015 and 2016. Some were evolutions of existing business. A handful of new brands entered the space, and raised venture capital or were acquired with fantastic valuation, pre-launch. 2017 will be the year that they will prove their models, move product, sell real estate, close loans and help investors deploy capital. It will be interesting to see who pulls ahead and who feels the pain of that transition from PowerPoint deck to reality. 2017 is the year where the world will become aware that the best way to invest in single family rentals is to buy a fully occupied, performing rental property. Sellers win by maximizing income up to the closing. Buyers win by reducing risk and generating yield from day one. Tenants win because they don't get kicked out. It's the task of this new industry to form an efficient market to match this reality. It's going to be interesting and profitable. INVESTMENT CHARLES TASSELL COO, National Real Estate Investors Association Fortunes are made and lost in the midst of uncertainty. Uncertain people freeze precisely when they should move. With the aftermath of the U.S. elections still ringing in our ears, every sector and strata of society includes people who will hesitate when choosing a path forward. e regulatory climate will relax—but how much, and how quickly? e Congressional Budget Office previously forecast GDP would grow 4-4.5 percent from 2011-2014, but governmental regulations stunted this growth. Assuming decent GDP growth, the Fed will increase rates, which will have mixed effects for investors. Domestically, the price of housing will go up, causing a slow-down in some markets while pushing longer-term homeowners' values to rise above the water line. is is good news for the 12 percent of homeowners currently underwater. is rise will release some of those owners with pent up demand to sell. Depend- ing on their state's economy, homeowners may increase investment in their own property or move to a state with an even hotter market for better prospects. e international effect of higher interest rates will be more subtle. Increasing returns will attract foreign investors, especially those strug- gling with negative interest rates or uncertain leadership. is will be important for Eastern investors, such as China, seeking safe harbor from inflated markets now showing fracture lines. e billions of dollars flowing into U.S. markets will most significantly affect the trans- action levels, cap rates, and values of commercial properties. Some of those funds are already pushing into the residential markets and may cause a bubble in cities where development out- paces growth. e international effect will also energize the stock market, pushing a dramatic but unsubstantiated increase. Immigration, a hotly contested issue, makes growth factors important to consider in pric- EXPERT OPINION "It will be interesting to see who pulls ahead and who feels the pain of that transition from PowerPoint deck to reality." –GREG RAND EXPERT OPINION "Assuming decent GDP growth, the Fed will increase rates, which will have mixed effects for investors." –CHARLES TASSELL

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