The SFR Show

Seeing both the high cost of property and all the institutional capital pouring into markets across the country causes many individual investors to worry about being pushed out of the market by the "big guys". In this episode, we address this concern by looking at the pros and cons of institutional activity in the real estate market.

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Transcript

Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.

Tom:

Greetings, and welcome to The Remote Real Estate Investor. On this episode, I'm going to be joined by

Emil:

Emil Shour

Michael:

And Michael album.

Tom:

And today we're going to be talking about a trend over the last couple of years where a lot of money is flowing into the space specifically of single family rental investing specifically from about from larger institutions. So today we're going to riff give our opinions on what's good about it, what's bad about it, what are some advantages that they have, versus us as individual investors, and so on. So Alright, let's go ahead and jump into it.

Awesome. So before we get into the topic of hand of discussing institutional capital coming into the space, I feel like it's been a while since we've checked in with each other on what is going on with our own portfolio and all of that good stuff. So Michael, I see you nodding your head on the video screen. So I'll let you, that is your trigger for you to go first, what's what's going on. I'm Michael album, portfolio life world,

Michael:

Right on, so a lot of different moving parts. So in the in contract to sell a 12 unit mixed unit property that I own with a partner, we were planning on keeping it as a long term buy and hold, but the market went crazy. And it's kind of a headache property anyhow, so we just said, oh, let's sell it. So we're making a decent profit on that and we're 1031ing it and I'm buying I have a contract, I have a property under contract out towards the east coast further east that I've invested before for a short term rental, and then I have some additional capital that I need to place as part of that 1031 as well. And then I'm also in the midst of two flips and so I have one actually under contract for sale

Tom:

Where you think of a parking that the the 1031 proceeds,

Michael:

Some of its going to be out in Tennessee, and then for that short term rental, and then I've got to find I gotta find some some place for the rest of it. So if anybody has any great suggestions, I think there's about $100,000 that needs to get placed.

Tom:

Nice more multifamily mixed use stuff.

Michael:

I'm not sure I think for that piece of it I'll probably just do a single family just go buy a single family all cash somewhere. That's the plan as of now and then I've got two flips underway or the construction is completed so I have one that's actually being sold on roofs currently it's under contract and then I have another one that is should be getting a lease signed any day now and that'll be sold through stock as well with a tenant in place.

Tom:

Awesome.

Michael:

So all kinds of moving parts.

Tom:

Nice Emil and yourself.

Emil:

So I don't remember my last update but I think I was talking about the the triplex we had the one bed one bath and getting ready to be renovated or just repaired, renovate whatever you want to call it. So we finished that ended up you know, there was a bunch of the tenant before was a smoker so we had to like do a couple coats of paint and a lot of patching to be done. We ended up replacing the kitchen cabinets and a bunch of loose ends here and there on the inside and outside of the property. So that just wrapped up and so my property manager is marketing that to be rented right now.

And then this triplex was actually a four plex converted into a triplex so one side is like a stacked one bed one bath. The other side is like a townhouse two story that tenant just left the other month which is actually great because it's a three bed two or one and a half bath. So the rent is probably a couple 100 bucks under which can be especially with the market rent starting to go up a lot recently. So we just approved a bid from a contractor yesterday and we are about to get underway making repairs there and getting ready to rent out so that'll probably be another four to six weeks if I had to guess.

Michael:

Nice

Tom:

Nice on actually guys I'm kind of in a in a boring position I which is always a good thing as a remote investor like boring is good. So I am actually so I did a couple of cash out refis with the great rates all that good stuff and right now I am in recording in my office which is our extra bedroom but we're in the not too distant future going to have another baby moving into it. So I'm losing my office space and these days it's really important so my real estate you know activities is more around, building a little To do shed on my lot, so I there's a lot of really cool prefab companies that that do this kind of stuff. So going through that rigmarole of hopefully the Contra Costa County Planning Commission is on the call of debating around permitting it or not, I mean, it's not going to have what you call it like plumbing or anything, but it will have electrical.

So basically working through contractors and site planning and kind of working on that type of fund development. But I think there's probably some real sweat equity to have like within the house that I'm at now adding an extra, you know, detached little office. So hopefully I get my money back. And some at the point which I decided to sell my place talk.

Michael:

Totally.

Emil:

I've been wondering about those, Tom, do you so you have to like, you have to get some type of permitting or approvals for the prefab stuff that doesn't have any plumbing, like I thought they just came in kind of like, set it down. And you're good to go.

Tom:

Yeah, I mean, I think that the city would want you to permit it. The from in talking to my contractor where you can get yourself in big problems is related to zoning and like setbacks. So like, let's say I build this, and I don't get it approved. And then for whatever reason, either they find out or come, if the building is doesn't have the proper setbacks, and they can make me rip it down. But if they don't, they just might never approve it. I could be talking out of my bottom. And hopefully we had the right disclosures at the top of the episode. These are all opinions, not necessarily facts.

But you know, I'm making sure that I'm nailing the zoning stuff, right and doing it if I decide not to necessarily to permit this this little unit, you know, I don't know, the I mean, the other consideration is permitting, so I sit when I when I sell it like it has that, but kind of funnily when I looked at a house earlier, maybe like two years ago, they had a little unit and I didn't ask if they were permitted. I mean, I guess maybe I should have, but I think the bids were still competitive, taking that in consideration that, hey, this is up and working as a an additional outside office.

So I don't know, we'll see if anyone would love to comment on. Should Tom try and permit his little studio shed that would be greatly appreciated.

All right. Back to the topic at hand. And I this is this is a great, Pierre, excellent idea for an episode today. So the question is, are institutions so big private equity that's coming in buying single family homes? Are they crowding out? individual buyers, such as ourselves, and the way that I think I love to shape this conversation is to give kind of an equal measure, looking at both both sides of the table as an investor, I think, with other people in the space, it's it can be sort of a double edged sword. And I'd love one of you guys I'd love for… Michael, why don't you lead us off on this discussion in talking about as an individual investor, you know, how do you see institutions, helping you not helping you in just kind of in the ecosystem of the single family space? Go ahead and lead us off.

Michael:

So I think I'll start by talking about the positives, first by some of the real benefits that we are likely to see if not seeing already from ibuyers institutions coming into the space. So for one is institutions don't make it their business to let properties become dilapidated. So they'll often buy properties and then fix them up with a lot of capex, make them nice. And so if I'm invested in that same market, or even better in that same neighborhood, my property is likely going to be seeing a lot of appreciation, because these other properties in the area are being brought up to snuff. And maybe even nicer than my property,

Tom:

Not just appreciation, probably rent growth as well, I might be stealing your next bullet point. But I think that's really tightly that you're seeing the benefit from.

Michael:

Wow, Tom. I had my linear path and you just cut me off at the knees.

Tom:

I know I'm, that's what a good leader of the episode does is just tear down other people go ahead and

Emil:

Take all the glory for himself.

Tom:

That's right. That was a good idea Tom.

Michael:

Last time I share episode notes with you. So I think that there's there's neighborhoods that are being that are being improved greatly. And I think that there's a misnomer and a common misconception when people hear the word landlord, or property owner and it's so somebody owns a slumlord. They let it become dilapidated, a lot of deferred maintenance, leave Park cars on the lawn type of thing. And so these institutions are in the business of making a return and are I think, likely in it for a longer period of time, then then some, mom and pop landlords. And so they are injecting capital into these markets, serious capital into these markets, and a rising tide raises all ships. And so if you happen to be investing in those same markets or have previously invested in those same markets, that can be a real big win.

Tom:

I like it, I'm able to do without any other initial commentary?

Emil:

On the on the pro side or the con side?

Tom:

I'm gonna let you take get where you want, you know what also a good podcast leader it gives…

Michael:

Flexibility

Tom:

…to take my fellow co host, explore the space, take it where you want.

Emil:

Okay. All right. All right. So I think it's one of those things that it just depends on on how you look at the world, I think they do a good service in that they provide a floor right back in 2010 2013, when prices just kept going down and down and down. That's when institutional investors came in and really created that bottom and started scooping everything up. And like Michael said, fixing up a lot of these distressed homes, bringing them up, bringing them up to code, whatever, making them nice and converting them into rentals.

So I think I think the same thing can be said, Now you have a lot of institutions who are interested in the space, they create a price floor for us, mom and pops. So that's good. I think it gives you some reassurance that this is maybe a more mature asset class than it used to be that there's a lot of money waiting on the sidelines. So if things go down a little bit, you know, it's not going to crater as much because some institutional money could come in and again, create that price floor. So I think that's one of the positives.

Also, you know, I remember reading these headlines, like, no one really providing data is kind of just anecdotal hearsay stuff. And so there's this Vox article that I just pulled up. Let me let me pull some stats from this. So this is from Laurie Goodman, who is vice president, vice president for housing finance policy at the Urban Institute. One of the things she mentioned is that as of 2019, institutional operators owned just 300,000 single family units. So you know, I know they're, they're putting more pressure to buy now, but you can just see there's such a small percentage and for context, researchers point out that there are roughly 15,000,00 1-unit detached single family rental homes in the United States. So a very, very small fraction are still owned by these institutions. So I think it makes all these you know, salacious headlines.

But if you dig into the data, they're really not scooping up the lion's share of properties. It's still owner, occupants, Mom and Pop investors. So I think a lot of it was you know, clickbait headlines trying to get people to outrage. You know, outrage sells. So I think that was part of it too.

Michael:

That's, that's a great point. But I also have to ask, Do you have one of those like Word of the Day calendars on your desk, because salacious is not a word that I've ever heard you use before? So curious to know if it's part of your daily lexicon?

Emil:

No, Michael, it just came to me as I was exploring the space that Tom had asked me to explore. So, you know, sometimes I'm a learned man, and I use words like salacious. So leave me alone, okay,

Michael:

I should explore spaces more, that's on me My bad.

Tom:

So I’ll add a couple of more points in the pro column as it relates to institutions coming in. So one of them is I love your point of meal about providing a price floor, I mean, in you know, family friends talking to me, Hey, aren't you concerned, if there's a huge, you know, drop in the value of the homes, it's like, no, like, so the rents stay fairly stable, just because they move very slowly, because they're on long contracts. And as a basic function of looking on what the return is, with the institutional money that's out there, they're going to pick up whatever you know, goes to sale, if it's below a certain dollar amount. So I think the the place price floor is really important.

The other is the liquidity aspect. So I'm sure and I've received a lot of different mail and you know, from like, OpenDoor, and some other like bigger companies coming in the space, maybe Open Door isn't isn't a great example, just because they're buying just to sell it, they're not necessarily long term buy and hold. But what they are providing is more liquidity if I needed to move pretty quickly, either on a 1031, or whatever.

The other aspect that I didn't hear talked about by you guys is better information on analyzing markets. So when with the institutions getting involved, they have a lot more data that makes sense in like a single place. And there's great research folks out there like John Burns, if you haven't looked heard of him, please look him up. He's, he's been on the podcast before. He's sort of like the the economic thought leader in SFR space and puts out these reports with tons of really good information on markets on like the top 50 or so markets. And a lot of that is made possible by the aggregation of data. So as a buyer, individual buyer, when I'm looking at potential markets to buy in, I'm going to have a lot more color on the type of return profile by these different markets because of the aggregation of the data on those institutions.

So I think that's been another boon or benefit of just kind of the lights being turned on. With regards to these different markets where there's good institutional concentration to be able to see what what, you know, how they're how those are performing.

Michael:

So are you suggesting like to ride the coattails kind of of the institutions that have Hey, if there are these big institutional players going in? It's they've clearly done their homework, it could be a great market to invest in?

Tom:

Yeah, I think that's definitely can be a strategy to do in like, you know, exactly like you said, these other people that are doing their homework and, and honestly, though, if you want to avoid that you can just buy in smaller markets, because a lot of these institutions are only going to find them in these Class A, for the majority of them, and maybe some class B, I guess, or when I'd say Class A Class B, I'm thinking more market size. I don't think I'm using the right verbiage, but like

Michael:

Tier one,

Tom:

So like the tier one. Yeah, exactly. Like the Dallas market versus some smaller markets, there's going to be less institutions that you if you do want to avoid them. But all right, let's go ahead and continue and continue the conversation. I'd love to hear some thoughts around negatives, with institutions coming into the space, Emil, why don't we change the order up? Why don't you go ahead and lead us first?

Emil:

I'm just gonna have to point to anecdotal stuff, right, like a an institution. And if you know your to believe these headlines, and these articles that are saying institutions are coming in I buyers are coming in and way overpaying for properties. That could be the case, right? That could be one negative, maybe they don't know the market as well as you know, your eye who is looking at the same market every day for years, right? And we know what an appropriate prices, they could come in, and they just have a lot of money. You know, they're looking at an investment in like a five year maybe 10 year time horizon. And they're like, Oh, won't matter. 5-10 years, we think it's gonna go up X percent. So we want to win as many properties as we can we have a lot of capital you want to deploy, so let's just throw a lot of money. So that could be one of the negatives is they're coming in, and they're willing to out pay your eye. So that I think is the biggest negative when you see things like this.

Tom:

I like it. Yeah, deep, deep pockets too tough, too tough to beat out that beat that out in acquisition. Michael, go ahead.

Michael:

Yeah, I think just to echo what Emil was saying. I think one of the reasons it's so difficult than they're able to overpay so much is one because it's not necessarily their money, so to speak. Like they have investors money they're playing with is other people's money. So there's, there's a bit of an attachment there. And then also they have access to death facilities, or if they are borrowing debt, they're able to do so at a much cheaper rate than then you were I. And so they're playing kind of with a different set of rules, trying to play the same game that we individual owners are applying. So that makes it really difficult to compete.

And then also Emil, like you mentioned that that price floor, I think that that can be perceived as a negative to if someone is on in a purchasing mode or purchasing phase. If I'm waiting for a downturn, or I'm waiting for a market correction, and there is a blip on the radar minor correction, these institutions might swoop in and prevent the prices from falling to a place where I might want them to be or need them to be in order to get involved into the game, or investing in real estate. So I think it's both a pro and a con, depending on which side of the equation you are, if you're already an owner, or if you're a potential buyer, that could be perceived as a real con.

Tom:

Pierre I'd love to hear how you came up with this as a topic, I'd love to hear your your thoughts on either side of the coin pro or con.

Pierre:

Well, to the point of the proportion of the market that they're buying up, say there's 15 to 20 million homes on the US market. And their only Emil was at 300,000. That you said,

Emil:

Yeah, but that was as of 2019. Just to reiterate.

Pierre:

So at that point in time when that measurement was taken, that's not that big of a market share. What about in 10 years? Is this a trend that is moving that will continue? And will they I mean, I'm not about anyone being regulated out of the market, but just as a concern, will this continue to grow and grow and take up a larger market share as time goes on? So that's one concern I have.

The other concern is is I'm not that worried about it. From what I've seen more what I see to be a bigger issue is the, the restrictions around building in certain markets keeping the housing stock low. So that's kind of my pro and con there is what's the future going to look like and is that actually the real problem. Are there other problems driving housing stock shortages?

Tom:

I like that option. See on other reasons why maybe there's just not enough houses and it's kind of artificially being kept low?

Pierre:

Suppressed Yeah.

Tom:

Out of the box.

Emil:

Tom, do you What about you? Yeah, share your thoughts here.

Tom:

I know that's a great thing about being the host. You can kind of just kind of pass the Hot Potato

Michael:

Sneaky snake,

Emil:

Aand just interject, Michael, when you have a really good point.

Tom:

Yeah, see exactly where his point is going. Yeah, I mean, I'm going to just continue to jump on, just call me jansport, I'm going to Mike, Michael is going to carry me. I am going to twist it up a little bit. So, you know, Michael talked about like debt facilities being different, you know, different, much cheaper insurance, because they're just getting much larger scale. The other big advantage that institutions have, and I'm not saying this, this is necessarily like going against me as an individual buyer. But institutions have access to these portfolios that, you know, let's say a seller only wants to sell it for $100 million and they're going to get a much better discount on these individual properties. So as an individual investor, some of the deals that these institutions are seeing, you'll never see them, because they're just so out of range on what that purchase price is. And you have these compounding effects that make institutions having this, like advantage in the space, like one better deals on individual properties, because they're able to spend $100 million at a time to buy the huge portfolio.

And I'm not saying this is bad, I'm just like, you know, making commentary. So, and then they have advantage to cheap or other type of costs that are involved, be it insurance, you know, maybe even internalizing property manager, management, seeing how that looks. So there's a lot of advantages that an institution has against you as an individual investor.

So the next place where I want to take this conversation is, what are some advantages that you, as an individual investor, potentially have over a larger institution say, you know, in, in buying in a market or for or whatnot, and, Michael, I see you shaking your head a little better? Maybe that's the breeze or something blowing in that mane of hair that you have? Why don't you go ahead and lead us off in this, this train of thought of of thinking about kind of advantages or ways to mitigate, in, in a market doing acquisitions with other institutions?

Michael:

Yeah, totally. So as an individual buyer, I think you have the ability to get really granular and really specific and really personal with the people operating in that market. For instance, I doubt that an institution is going to call up five local property managers and ask them their opinion about Fifth Street or 10th ave, they are going to be using data, like you mentioned, Tom aggregating that data to get an idea of what that market is. So if we simply pick up the phone, which I've always said that there's really no substitute for doing and having conversations with real people who are operating and living in that market on a daily basis, you're able to, in my opinion, get a lot more granular.

And so even block by block, a lot of some, some of these markets have have massive differences. And so when you can pinpoint that and get down, again, there's no other better word for it. I think that granular, you can get very precise and very accurate with the types of properties you're buying, and the physical locale those properties. And so I think that that's a massive advantage that we as individuals have, because I just don't see the the data being that granular yet. And maybe they're using data that we don't have access to my guess is that they probably are but from a property, I mean, property by property basis, block by block basis, I just think there's no substitute for for local local personnel.

Tom:

Totally love that point. Emil, do you have any other any other thoughts?

Emil:

No, I think I think Michael took the important one, right. You are somebody who, you know, like I mentioned earlier, you're looking at that market every day for years, hopefully, right? Like, you're gonna see things and notice things that an institution is not because they're just looking at aggregate data, maybe you see a property that, I don't know, it's three bed, two bath, but it's like two 300 square feet bigger than all the other three bed two baths and you know, you could potentially convert into a fourth bedroom or something, you know, like, these things that you only pick up after just knowing that market, knowing your properties for a longer period of time. So I think it just, you know, may require you to be more patient and have a little bit more skill and in analyzing deal by deal, but I still think you still have plenty of advantages as an individual.

Tom:

Yeah.

Michael:

I was gonna say one other advantage that I think individuals have over institutions is that we are individuals and we are people. And this applies more so for your mom and pop sellers or you're kind of one off sellers. So we as buyers can really humanize ourselves and often have interactions with the seller and approach it from a very at a human level and kind of human connection. And so this is something that my wife and I did on this 1031 property that we're purchasing, we wrote a letter, just talking about our background, who we are what we want to do with the property why we think we'd be a great fit to buy it and the seller said I want you to have this property, even though there were there were other tours and other offers, I believe.

So when you can connect with someone that kind of on that human level, I think it people like the invisible people they like, versus I am the institution, this is the price kind of thing. I don't know why all situations have robot voices. But that's kind of where I went with it. And so I think just, again, humanizing the deal and humanizing yourself can give you a massive leg up over over more professional investors.

Tom:

I think my point that, that in dividuals have over institutions is a longer term lens of, of a strategy, where institutions, you know, they may turn on the acquisition and turn it off. And I remember, in working for one of the single family REITs, you know, our price of our stock would go down, and it had like nothing to do with necessarily performance of the, of the properties that we owned, it could have had something to do with, you know, who knows, like, whatever, what other secondary aspects of the market, and that could impact, okay, when we're doing acquisitions, or when we're buying, there's just this long game of telephone, it's like, with bigger institutions on making decisions where you are this have this longer term view, in that you can sort of not beholden to this, like longer term chain of circumstance, which an institution may have on when they're selling a fund or when they're buying a fund where you can be ultra opportunistic, having a long term vision on when to buy when to sell, in, in time it out, you know, for the what's, what's optimal for you, versus what has happened in these like secondary factors, if that makes sense.

So another point that I made earlier is, there are a lot of markets that are not as saturated with institution, perhaps there's a reason why there's less institutions there. For some of them, it could be just a population thing where they're just looking for bigger markets. So you're much more nimble and agile as an individual investor, in, in moving right in, you know, spreading out longer terms on when you want to buy when you want to sell changing locations, there's just this agility as an individual investor that you have. And a good analogy is to another way to think about it kind of similar to Michael's earlier point is, you know, well, a lot of these institutions are using a lot of data and they're kind of firing, you're executing a little bit more as a shotgun versus like a sniper rifle, where with you, as an individual, you can spend a little bit more time massaging each deal. Understanding each stuff, and there could be times where you run into a brick wall, as in the institution that you're competing with in buying a house just you know, has way more money, but who knows, next month, they may put a halt block and buying for whatever reason that they do. And if you can be patient with your strategy. It I think it tends to pay off in having that longer term horizon.

Michael:

The it makes total sense, Emil did you remember that? We were talking to the enemy here, Mr. Mr. REITs?

Emil;

Tom, Mr. Former REIT Schneider.

Michael:

So Tom, I'm curious to get your perspective, because you did used to work for a single family REIT right? So you were on the institution side of things. And now you're, of course, on the individual side of things. So very curious to get your thoughts around, you know, what tools, advantages you think you had over the individual investor? And now, do you feel handcuffed, or more or less, less well equipped to participate in this space?

Tom:

Sure. So I think on from an acquisition standpoint, getting access, you know, as I mentioned, to before, of these, like, big portfolios to look at and to underwrite and buy, was a was a big deal, I mean, I'm probably going to be regurgitating a little bit of some of the stuff that I talked about earlier. So access to doing that type of an acquisition, because you're definitely able to get a little bit of better discount to market and in doing that type of a transaction.

On the hamstring thing, I think there's sometimes with as I said, like a big organization, you may make decisions, at certain levels that don't make sense all the way down to the bottom. Like, for example, like, there was this concept of like turning over capital, where we would just sell properties to recycle the money to come through. And it's like, these are great properties. I remember I worked in acquisitions for a little bit, and some of these properties I bought, and they were like performing awesome. And we sold them, they probably you know, doubled in value from the time that they sold them in whatever 2016 to now, or maybe even more, and it's like, why why would we why why would that institution sell that? I mean, I guess it's great. Now it went to either an individual investor or to an owner occupant in being sold on the MLS, but it just sometimes there's there seems to be decisions made that if you weren't down at the ground floor, you necessarily wouldn't make, you know, in working in one of those institutions.

What is interesting to think about for me, so I left that company to come work at Roofstock in 2016. And that's a lot of time to have improved processes and, like improve the technology. So I think they have institutions have an advantage in applying a lot of resources to getting more efficient as just like a big mechanism. So I I'd be interested to see how some of those companies are running now, as it relates to some of these, you know, in underwriting properties, and how much that has changed. I think there's, you know, definitely opportunities to have an even, you know, a bigger advantage and continuing to iron out those practices and best, you know, technology that support it, after so many more years.

I think the big piece is just his agility, as an individual versus an institution is agility and kind of getting able to, I mean, in buying a property, there's, there's always some unknown unknowns. And I think as an individual, you can go a little bit deeper into answering those questions, be it like, getting to know the local people better. In that area. If you're just focusing on that one, you know, that one property, there's just that much more of an opportunity to go that much that many layers deeper and underwriting a property and underwriting a market and under, underwriting and individual neighborhoods. So I'd say that agility aspect is really is something that we need to take advantage of as individual investors.

I guess as a super high level recap, and if you guys want to fill in, I think we both see institutions as a little bit of a double edged sword. But I think, altogether, I would put them more in the positive camp just in the stability that they provide to the market in providing a price floor and maybe pushing rents a little bit. But again, it can definitely be more competitive on the acquisition side. And Michael, let you fill in some fill in some gaps. I see you wiggling around over there.

Michael:

Well, I just I just this analogy just came to me. And it's one of an ocean and in the ocean, we have sharks, and a lot of people are terrified of sharks, they don't like sharks, because they are competing for their same food source. And they also are harmful can be harmful to humans, in some instances, but they're also necessarily part of the ecosystem. And if we got rid of all the sharks, we would likely see the collapse of our oceans. And so it's a it's a necessary evil is the wrong word. Because I don't think sharks are evil. But just as in thinking about some of the dangers or fears around getting in the ocean, could be applied similarly here, there's some maybe danger and fears around getting involved in the single family real estate space. But I think that these institutions are definitely necessary. Force all the pros that we talked about, just like sharks are.

Emil:

Yep.

Pierre:

The apex predator serves a function, but there's still room for the little fishies

Michael:

That's it? Yeah. That's it and surfing ocean analogy over.

Tom:

Emil, any final thoughts? You went through in?

Emil:

Yeah, just remember, you know, we pulled some data, institutional investors are still a very, very small part of the ownership of all the single family homes in the United States. And for anyone thinking, oh, they're driving up prices, just remember the owner occupants who are thrown 200 300 500,000 over asking to get into the home of their dreams right there. They're acting on it emotionally. And there is very limited supply. So I think that's what's driving up prices, not institutional investors.

Tom:

I like it, I like it, I think it's also can be my last, last last little thought is it can be a validation of the space. So you know, you have all this smart capital coming in, you know, one, if someone glass half empty, you could be thinking, oh, they're already there. But it's like like Emil said like, it's a really small percentage of single family rentals that they own of the entire piece. So it's, it's a validation, it's a it's a price floor. It's a an optimation optimization in the space and I think on behalf of everybody in the podcast, there's still room in the ecosystem to take advantage of it.

Awesome, guys. On that note, thank you so much for listening. If you enjoyed the podcasts, like us, subscribe, all that good stuff. I'd also recommend checking out RoofstockAcademy.com check out our YouTube channel, just search Roofstock on YouTube and as always, Happy investing.

Michael:

Happy investing.

Emil:

Happy investing.