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Ep #231: Trading Portfolios, SRFHub, and the Build-to-Rent Model — with Michael Finch

May 28, 2019


uXN94d2AThis episode of the Real Estate Investing for Cashflow podcast features real estate expert Michael Finch. Michael has been in the real estate business for sixteen years and he founded SFRhub advisors which is the leading SVN commercial real estate brokerage with a focus on single family rental portfolios and build-for-rent investment portfolios.  

Michael explains what they do at SFRhub and talk about the management of intermingling portfolios and how they have evolved over the years. He also explains what built-for-rent is and all other aspects related to its development and business model. Kevin and Michael also trade perspectives on single and multi-family rental portfolios, the advantages,  disadvantages and the strategies involved in investing in either space.

QUOTES:

“We really have two divisions here at SFR hub, one is for built-for-rent new construction homes and the other is the existing single family portfolio homes.”

“Every portfolio that comes in to our system, not only are we analyzing it from a evaluation standpoint, we utilize the number one AVN (automation valuation model)… but what we do that takes it even a step further is we pull in multiple data sources, we built in some AI in the background to red-flag some discrepancies.”

“I’ve talked to some built-for-rent developers that have been doing this for a while and the recent quote from one said that thirty percent of his tenants have stayed for nine years when he’s built some of these communities, you know, back in 2009-2010 and he’ still got original tenants in some of them..”

“The biggest inefficiency in the single family world is that when there’s issues, the homes are scattered around and you do have more rooftops than one building or two all in one spot but on the flip-side, you have typically greater appreciation in good markets because single family homes appreciate at a higher rate than a multifamily apartment building typically does.” 

HIGHLIGHTS

  • 5:40 Michael’s shares his background leading up to founding SFRhub
  • 12:12 Different investment portfolios and how they’re managed
  • 17:07 What prompted SFRhub and how does it work
  • 26:10 What kind of financing is available for these portfolios?
  • 31:50 What is Built-for-rent?
  • 40:40 Single versus multi-family home investment

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