Next Level Agents: The Kevin & Fred Show - Interviews with the best and brightest minds in the real estate industry

Ben Riehle Returns! Institutional Buyers Aren’t Killing Real Estate, They Can Make You a Killing

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Jun 24, 2024

Real estate professional Ben Riehle debunks the myth of institutional buyers killing real estate, emphasizing the opportunities they present. He highlights the value of local knowledge for agents, the growth of single-family rentals, and the potential for agents to expand into asset management. Ben discusses the benefits of working with institutional clients, adapting to industry trends, and providing specialized services for greater success in real estate.

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INSIGHT

Housing Shortage Factors

A housing shortage is driven by decreased construction post-2008 and increased demand from millennials.
Baby Boomers staying in homes longer exacerbates this shortage and impacts affordability.

INSIGHT

Institutional Ownership

Institutional investors own a small percentage of single-family homes (0.6% of total, 3% of rentals).
This challenges the narrative of Wall Street drastically impacting affordability and homeownership.

ANECDOTE

Sourcing Partnership

Ben Riehle's firm secured a deal with a large private equity firm looking to buy single-family homes in Tucson.
This led to them becoming the firm's primary sourcing partner, expanding to 10 markets and closing 100 deals monthly.

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Ever since hedge funds started bundles of single-family homes, institutional investors have been demonized. They’ve been blamed for ruining affordability, taking homes away from innocent consumers and killing real estate entirely. Reality isn’t quite as dramatic - that narrative is drastically overblown. In fact, many real estate professionals are missing out on massive opportunities by buying into this narrative.

Here’s the truth: single family has become a huge asset class and it will continue to be one over the next decade. That’s why so many investors are getting into it, but that doesn’t mean that it’s killing real estate as we know it. Ben Riehle saw the opportunity and shifted his business model from a traditional broker/property management operation to asset management in single family rentals.

As a real estate agent, you actually have a huge advantage because of your local knowledge, that’s what these companies are looking for. You could easily add this offering to your business and earn a lot more.

How do you get into a conversation with these companies? Why is the current state of single family decades in the making? Are institutions destroying real estate? In this episode, Ben Riehle returns to talk about the pivot in his business and why he’s bullish on single family rentals. He also gives us the lay of the land in single family investments and how agents can use it to be more valuable.

Guest Info

Ben Riehle is a real estate investor, entrepreneur and managing partner of First Floor Capital Management, a company building institutional grade SFR portfolios across the Midwest and Sunbelt. With 12 years of single family rental experience and over $250MM deployed, and $45 Mil. of assets under management (mostly SFR and a few legacy multifamily assets). Ben and his team are in the process of launching their next fund that will buy quality homes in great neighborhoods in Louisville, Kansas City, Phoenix and Tucson and hold them for the next 10 years. Follow @SFR_investor on Twitter/X, go to https://www.thesfrinvestor.com/ and https://www.ffcm.com/ for more information.

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