iknowSFR

Pension funds want to mitigate risk and rental cash flow is a reliable and proven way to do it. When the economy pulls back, these funds will look for solid cash flow options. SFR, like a REIT, is a good choice. When money flows in, this will be used to acquire additional homes.

In short, pension funds looking to de-risk in equities will move towards SFR. This isn’t US-only, but the SFR will be US-only. So expect EU nations that allow their pensions to investment in US assets to move more money towards SFR. The number of homes managed under institutional SFR will grow substantially in the coming years.

This entire comment lacks evidence or data to support it but I used to work in SFR and still keep tabs with several companies on a personal basis.

Redfin and Zillow are not the problems in the SFR industry. These are tech companies that were trying to capitalize on the PE flowing into SFR. Their lack of success is not an indicator for the industry as a whole.

Make no mistake about it: SFR is alive and well and increased rates will not hurt them. Most have paused acquisitions but their cash flow is still fantastic. The outcomes over the next 24 months will play in their favor and those companies will grow as the economy pulls back.

Is there a website or directory where all tech companies strengths/priorities are listed out? Hardware, software, and services companies included?

Yeah… middle management is oh-so-powerful! They’re definitely not worried about their own roles because they control everything!

Seriously, what the hell is this mindset? What’s the deal with HN and framing middle management as some us-vs-them bad guy? Stop dehumanizing this layer. Middle management doesn’t exist by their own accord. It’s formed by leadership to support leadership.

I get the impression that the people who bash middle management have never experienced the role themselves.

Your assumption of the average consumer’s technical chops and desires isn’t realistic. Pirating anything is not as convenient as paying $7/mo.

The majority of outcomes here are either they pay the fee and get ads, pay the higher fee and don’t get ads, or don’t pay and don’t watch. It’s not a pirate or don’t pirate discussion for most of the world.

This was an interesting read relating to your post. https://www.bloomberg.com/news/articles/2022-10-06/how-uk-pe...

The gist being that pension funds hedged with derivatives that are dependent on small movements of bond rates. However, since the rates increased quickly, the pensions needed to sell more bonds to fund their margin calls, which further caused a need to sell more bonds. They started their own death spiral.

Hey man, there are literally dozens of us.

Investment groups aren’t in it for the resell. They’re incentivized to hold the asset as they’re leveraging against it to buy more homes. Selling assets is pretty uncommon in SFR for this very reason. The game is more about cash flow to service their debt. That means rent rates. Selling the homes has a 2 part effect: reduced your cash flow to service your debt and further forced asset sales that were bought with debt. If you really want to get homes back into the retail market, you have to target the cash flow.

Fascinating. I haven’t played or thought about poker in 15 years. Can you elaborate more on the current strategy of poker? A real example would be helpful.

Fair question and yes. Received from a reliable individual and also personally tested. Even still, I’ll admit that even after testing I Googled symptoms of meth use a few times during the early stages of the trip.

Your body feels exhausted but your mind is quite awake. So you’re exhausted and energetic at the same time. Your joints can kind of feel tense if you’re not moving. Walking is enough but then you can also feel overheated pretty easily. Hours 1-4 were largely uncomfortable for me on both.

LSD gave me diarrhea for a solid 4 hours. I think that’s rare but I felt better the next day than I had in years. Probably something to do with gut science but I have nothing to back that up other than my story here.

Same experiences. Dropped drinking, started exercising. The LSD dose was much higher and the after effects listed lasted for weeks. However, the mushrooms dosage was lower and while the after effects were similar, it didn’t last as long. Truthfully, I felt a deeper connection with the moment post-LSD.

The LSD trip kind of hurt but after the first few hours, became a solid 6-8 hour span of self reflection. Mushrooms started out chill and evolved into a pretty painful experience before moving into that self reflection stage.

What’s happening during that self reflection stage is best described as a feeling of losing it all. Family, friends, etc. but not so much material items. In that moment, I felt complete loneliness and the fear associated with that loneliness. That fear led to asking what would make me be alone and the answer was my personal ego. It ultimately was a confrontation of personal flaws like narcissism or selfishness. Later in the trip, like 5-8 hours, a feeling of being content with who I am and where I need to improve to not lose the things that truly matter was the result.

I don’t know if I’ll ever try either LSD or mushrooms again but the reset on my personal ego made me value a lot of important things that get backburnered in the grind and stress of life.

Except that most builders are investors in the SFR space. In the end, we’re expanding rental availability, not first-time home owners.

Depends on who is already financed. Likely this will be a lagging indicator and we’ll see further increases in institutional investment. Government at all levels will avoid being involved because citizens have grown used to the liquidity of their homes. The long term consequence to the retail market is going to be a tough pill to swallow. Builders adding to inventory are partnering with institutions already. All of this plays out in favor of expanding the SFR market share.

The article directly addresses this:

“The last time U.S. housing saw such rampant price growth was in 2005, and the market corrected itself, infamously, in 2008. But the underlying reality today is different. Back then, a geyser of subprime adjustable-rate mortgages sputtered out as borrowers defaulted. (According to Bloomberg News, 60 percent of mortgages during the bubble years were adjustable rate; fewer than 0.1 percent of mortgages are now.) The current boom is better compared to a river, one fed by streams that have long been visible on the horizon: high demand, low supply and a dysfunctional economy in which wages are stagnant while restrictive zoning and poor public policy have turned housing into an artificially scarce commodity. Historically low 30-year fixed mortgage interest rates, hovering between 2.68 and 3.08 for the last year, are narrowing the riverbed, quickening the current.”

At the risk sounding stupid: can someone please explain what the author is trying to convey here?

If you’re asking how does it stop, as someone else mentioned: when the government decides to stop participating in the market.

If you’re asking what happens when this falls apart, my guess is in hyper-consolidation of wealth. That can mean the decreased wealth of the super-rich but with the far greater decrease of wealth of everyone else.

People are dumb or certain companies are smart?

If it’s knowledge centralized to a single employee, then it’s not institutional.

HouseCanary is a leading data feed and is $150k/year. MLS offers a limited feed for around $1,500/month. You can scrape Zillow and use a captcha handler tool for $30/month.

There are distinct differences in these approaches. Zillow’s data lags 3-4 weeks while HouseCanary’s is about as real time as you can get. MLS can be weird and is typically market-specific. With all of that said, you can’t just login to a website and have this available. There is legwork required.