Sourcing Build-For-Rent and SFR Portfolios for Investors

Opening channels that lead to actionable investment opportunities is getting steadily more difficult in all facets of the Single-Family Rental space. Lower inventory and more competition from capital mean investors have to find sourcing partners that have focused programs to attract attention from owners and operators.

Whether you’re a firm looking for new Build-For-Rent projects to pursue or scatter site SFR Portfolios, Strata has strategically placed ourselves at the intersection of investment capital and SFR inventory to find opportunities to fit the unique criteria of our clients.

Benefits of Working with Strata

At Strata, we create an access point for both buyers and sellers of SFR Portfolios and Build-For-Rent projects with a focus on the Southeast US markets. Owners and sellers often need to better understand how investment capital flows into the SFR space, what investors are looking for, and what the appetite is for SFR opportunities. This understanding creates the foundation of what becomes an owner’s disposition strategy.

With a better understanding of the SFR and B4R market and access to investment capital in the space, owners, developers, and builders achieve better pricing and a more predictable exit path through Strata than what they could achieve on their own or by working with a single investment firm.

One-to-Many Relationship

When you engage a single investment firm on the sale of a real estate portfolio or Build-For-Rent project, you are limiting yourself to just one firm’s view of the market and your asset. At Strata SFR, we have created dozens of deep relationships with firms that have varied and nuanced investment strategies. We understand these various strategies and align our sellers with investors that are the right fit and can perform.

Deep Investor Relationships

The first task we put ourselves to at Strata is venturing to understand the exact needs of our investor clientele. That means knowing not only where they are buying and what specific asset criteria they are targeting, but also understanding their capital resources, preferred deal structure, timeline for acquisition, and bandwidth to pursue new opportunities. This deep relationship with our investor base equates to best-in-class execution for our seller clients.

Deep Analysis

Given our in-depth understanding of how investment firms buy, we tailor our analysis of SFR Portfolios and Build-For-Rent projects to the needs of the market. We provide data and perspective to our sellers that leads to a well-rounded understanding of where the market is and where for-sale assets fit into it.

Programmatic Approach On and Off-Market

We take a very specific approach for every project we bring to market. Some assets are better served through an Off-Market disposition program some are better off being put out for the widest possible audience to view. We explore both approaches on a case-by-case basis and work with our seller clients to decide which will be more effective.

Case Study

Our client was a smaller, regionally-based for-sale builder in Atlanta. The client had combined two communities, totaling 120 units, and they didn’t know if their projects would fit the Build-For-Rent model. 

We analyzed each project to discern the potential return metrics the units would yield as rental units. We helped the client identify a price point per asset that would be attractive to potential investment firms. Then, we compared that price point with the net profit they would likely see through a one-off retail sales program, boiling the decision down to a single number (the delta between a B4R sale and a retail sale).

We identified potential buying groups that had investment strategies that matched well with the geographic location of both projects and the price point and yield that the projects would produce.

We engaged a number of these investment firms until we found one firm that was a perfect fit. The projects were put under contract to be delivered with a Certificate of Occupancy and the client received a reasonable down payment for all units. Having both projects presold freed up the seller to pursue other projects and created the opportunity for the builder to increase the pace of new project acquisition for the firm.

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Our Process

Off-Market Process

  1. Analyze, package, and price your SFR portfolio
  2. Identify a limited pool of buyers using Strata’s proprietary database of SFR investment firms active in the space today. We match the portfolio with firms that have current portfolio footprints and current buy criteria that overlap well with your SFR portfolio
  3. Engage each potential firm and receive confirmations from each that they will engage Strata in underwriting and for offers on the portfolio. Once a potential buyer pool is identified, each participant of the buyer pool will be notified about how many competing buyers they are up against and then provided the full SFR data tape for review
  4. Strata will ensure offers are collected in a condensed time frame and consult with owners on the best possible counter-strategy until an acceptable price is agreed upon. Strata will then consult both buyer and seller through the due diligence and closing process

On-Market Process

Strata has developed a network of thousands of real estate investors from small local investors, to medium-sized regional investors all the way up to institutional players such as SFR REITS, Real Estate LLCs, Family Offices, and high net worth individuals. When a disposition calls for a broad, On-Market, public disposition strategy, we have the network and resources to execute.

  1. Analyze, package, and price your SFR portfolio
  2. Create curated marketing to put the opportunity in the best light
  3. Take our marketing and implement a direct email, social media, and outbound call campaign to draw attention to the portfolio
  4. Engage and help owners collect all indications of interest and set a definitive timeline with buyers to present all offers
  5. Coordinate counter offers to all and keep the bidding process moving until an acceptable price is agreed upon. Strata will then consult with both buyer and seller through the due diligence and closing process

Why Choose Strata

Strata has a decade of experience in the Single-Family Rental space. Our team is comprised of CEO Adam Stern who has sold more SFR than any single professional in the SFR vertical. We have a dedicated marketing team focused on gaining maximum exposure to participants in all facets of the industry and an analyst team with deep experience and understanding of how to present SFR and Build-For-Rent opportunities in an easy-to-understand and highly consumable fashion.

Access the Inner Circle

As part of Strata’s Investor Inner Circle, you will get a first look at our Single-Family Rental opportunities that fit your unique investment criteria. Once joined, we will connect with you and catalog the markets and asset characteristics that fit your view of the market and investment thesis.

Join the Inner Circle