During the foreclosure crisis nearly a decade ago, investors plowed into the housing market, buying millions of distressed homes and turning some of them into lucrative rentals.
They transformed the once mom-and-pop market of single-family rentals into a large-scale, formally managed asset class — and it is still growing, in fact faster than ever.
Foreclosures, however, are now few and far between. Distressed properties — foreclosures and short sales ) — make up just 2% of home sales today, down from a high of 49% in March 2009, according to the National Association of Realtors. The regular existing home market is very pricey, so investors are now turning to a new strategy: Buy new. And suddenly, the so-called build-to-rent market is exploding.
This week a small Tampa, Florida-based builder, ERC Homebuilders, is launching a “soft” IPO, hoping to raise $100 million to build more than 1,000 rental homes across the state. It is offering investors private shares using Regulation…