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ยป VISIT US ONLINE @ DSNEWS.COM 21 certainly seen a lot of challenges. It's not always been perfect, but I do think the beauty of being in a numbers-based business is that the numbers usually win. What type of investors are taking advantage of these opportunities? When we're talking about investors, there's a bunch of different groups of investors, right? e people who are actually buying the homes and either holding them and renting them out, or people who are buying the homes that are maybe obsolete, fixing them, and selling them to someone else who may be renting them out. en there's the bond investors, who are buying the bonds that are backed by these loans and the yields off these houses. I think all of them can expect to see a pretty benign environment for 2018/2019 with increasing rental rates, strong fundamentals in the housing market, and just a really strong interest in the asset class. How does today's market compare to five years ago? I would say five years ago the large institutional investors were getting into the market because there was a massive dislocation in pricing. e reason most of the institutional investors got into the market is not just that they thought it was time, but they saw that you could run a rental company like a multifamily company, but with detached houses. It was also that they saw a massive opportunity for home- price appreciation. ey figured if they were wrong about running it as a rental property, they could at least benefit from what proved to be the floor in the housing market. at doesn't mean it's not a good investment right now or that it wasn't actually a good investment 10 years ago. If you're looking at the middle part of the market or the lower part of the market, which is where we are, our average borrower has actually been in this business for 10-plus years. e whole notion of having a single- family rental business on a smaller scale has actually been part of the U.S. housing stock for a long time and I think it will always continue. It's important to also note that the markets that a lot of the investors with 50 to 100 homes tend to be are the markets where the institutional investor may not be. It's not always the market that had a lot of the distress that caused the investors to come in. It might be places in Ohio or Tennessee or Indianapolis that have always produced a strong rental yield and not necessarily large fluctuations in home prices. I think it's important to separate the institutional players (who may have been looking for home-price appreciation plus yield) and what I think of as the average player in this market, who's been in the market longer, who will be in the market going forward. ese are professional real estate investors. ey tend to be yield focused and not HPA focused, and they tend to be in markets that do not have as high boom/bust cycles. What trends is the single-family investment market experiencing right now? I think one of the things that we're seeing is consolidation. e Starwood- Invitation Homes merger that's coming up is one good example of that, but we're definitely seeing consolidation, even with the smaller and mid-sized players. One of the reasons for that is availability of capital and the fact that people are really starting to run these businesses as businesses for yield. e growth in the market relates to the fact that people are being more efficient in how they manage their portfolios. ere are some great new technologies that people are bringing to bear. People are putting in all kinds of smart sensors in the homes. It makes it much easier to run 100 single family detached houses as a pool the way you would a 100 unit multifamily property. THE LEADER IN DEFAULT SERVICING NEWS Help shape the next issue of DS News. Drop us a line at Editor@DSNews.com.