Monthly SFR Deal Highlights (July 2024)
New private lenders are doing significant volume out of the gate
Executive Summary
Every few months, we generate a roundup of the most interesting deals completed by reviewing transaction-level data across single family acquisitions, dispositions, and financing events.
Key observations from July include:
Newer private lenders are doing significant volume
Large Build-to-Rent (BTR) financings are occurring
New private lenders are launching
SFR3 (a major single-family rental operator) is continuing to prune their portfolio
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Analysis & Results
SFR3 Has 100+ Homes For Sale
SFR3, who we’ve previously profiled, is a large workforce SFR operator. They own 10,000+ homes across the country with a strong focus in Ohio, South Carolina, and Georgia. After growing quickly between 2020-2022, they pruned their portfolio heavily in 2023, selling thousands of homes.
SFR3 currently has over 100 homes listed for sale, with the bulk of the listings located in Detroit. Year to date, they’ve sold over 500 homes, spread throughout many of their core markets (NY, MI, and OH have had the most sales).
Institutional SFR players are still struggling to find deals that pencil and remain mostly on the sidelines, but local flippers and landlords have continued to find deals while operating at a smaller scale.
CV3 Hit $100m+ In Origination Volume In July
CV3 is a private lender that started originating loans just 11 months ago. The company has been growing quickly and in July hit $124m in origination volume.
CV3, like most private lenders, focuses primarily on flippers and non-institutional single family landlords.
CV3’s originations are highly varied, with the high end this month being a $4.7m credit line to Scottsdale-based luxury developer, Modern Masterpieces.
On the opposite end of the spectrum, CV3 also funded a $76,000 loan on a Philadelphia row home.
While CV3 has been successful with a variety of different loan programs (builders, DSCR, fix and flip), other lenders are finding success with more a narrow approach.
Encore Originates $500m In Volume Year-To-Date
Encore Finance, a private lender currently focused primarily on SFR portfolio loans, has crossed over $500m in origination volume this year. Started in late 2023, Encore has rapidly grown origination volume out of the gate.
In July, Encore provided a $23m BTR refi for Pintar at their new Zora Encanto community in Phoenix.
Former Genesis Capital CEO Launches New Lender
Ascent Developer Solutions launched in July with the goal of originating $5 billion per year in loan volume.
While we haven’t seen any loans recorded from the company yet, it’s only a matter of time before the numbers start rolling in. Genesis is the biggest lender in Southern California for large scale residential development, so we expect to see a similar profile of borrowers from Ascent, at least to start.