Realtor - July/August 2014

REALTORMAG. REALTOR.ORG REALTOR® JULY/AUGUST 2014 19
with vendors and contractors, and turning
on and off utilities. “We realized that if we
did not build it, we would have to wait for
the industry to build it.”
Although the Florida company is still
adding to its portfolio of holdings, Kattan
notes that the single-family space is
uncomfortable for local banks, which
typically provide loans to corporate and
individual investors for up to 10 proper-
ties. PIA Group is ready to leverage its
equity and is seeking a $20 million to
$30 million loan from an equity firm in
order to purchase 400 more homes in the
region. “The government left a hole for
lenders to step in,” says Kattan. Investors
like PIA Group can turn to several lenders,
including B2R Finance LP, a Blackstone
subsidiary that offers floating-rate loans
starting at $10 million for SFH inves-
tors. “The big companies are setting up
platforms to acquire and manage these
assets. Their bet, and our bet, is that
single-family homes will become an asset
class much like multiple-family homes.”

Reinventing Renting

One company that is intent on institutionalizing renting is Oakland, Calif.-based Waypoint Homes. “Our mission is reinventing renting,” says Doug Brien, co-CEO and cofounder. The company, through Starwood Waypoint Residential Trust, owns 11,000 SFHs in locales as far-flung as northern and southern California, Phoenix, Houston, Denver, Dallas, Chicago, Atlanta, Orlando, Tampa, and south Florida. The company recently went public and manages private funds for GI Partners and a number of other institutional and smaller investors.

Waypoint Homes has about 600
employees and handles all property
management; teams of local property
managers handle about 250 properties
each. All of Waypoint’s local leasing spe-
cialists are licensed real estate agents.

“We do all of the property management ourselves,” says Brien. In each region, Waypoint has a walk-in service center, sometimes in a Safeway-anchored shopping center, where tenants can pay rents and consumers can easily make inquiries.

The company offers a loyalty program
that rewards tenants with points if they
pay rent on time and maintain the home
with regular tune-ups. The points accrue
toward upgrades and even cruises.
Waypoint is still acquiring properties,
but Brien notes that home prices have in-
creased and cap rates have declined from
10 percent to the 7 percent range since
2009. Although the tenant turnovers are
half as frequent as with apartments, the
cost to renovate SFHs is twice that of
apartments, which is generally the case
for the property management industry as
a whole. The company, which launched
in 2009, was one of the first large players
in this space. Waypoint initially offered
lease-to-own options but discontinued
them three years ago, because, Brien
says, “Investors wanted to control assets
and decide when to sell.”
Like PIA Group, Waypoint also dis-
covered the shortcomings of existing
property management software. The
company has spent four years developing
Waypoint Compass, a portal for residents
to pay rent, contractors to bid on jobs,
and would-be tenants to view listings.
The company has positioned itself for
a long-term presence in the housing mar-
ket. “Renting has never been institution-
alized,” contends Brien, “but it’s evolved
and [more] people are renters by choice.”
Unlike investors with bulk portfolios,
owners with several properties may lo-
cate property managers via third parties,
such as All Property Management, which
provides qualified leads of property
owners to licensed property managers.
According to Reggie Brown, CEO of All
Property Management, “During the
housing crisis, there were more ‘reluctant
landlords’ driven by the need to rent out
their homes to avoid involuntary dis-
placement. Currently, home owners and
investors are shifting from do-it-yourself
management to using professionals who
can provide better results.”
Washington, D.C.–based Nomadic
Single-family
home rentals
accounted for