Fundrise is one of the biggest real estate investing platforms in the United States, with over 150,000 investors. Its latest moves indicate that it plans to get larger. In recent years, Fundrise has put much of its focus and funding into acquiring multifamily projects in the Sun Belt.
Now it's homing in on a single-family rental (SFR) strategy. To do this, it closed a $300 million credit facility with Goldman Sachs. Half of that ($150 million) will be used to finance nearly half a billion dollars of newly-built SFRs.
We've been talking a lot about single-family rentals as an asset class on Millionacres recently. More and more companies, both public and private, are amassing massive portfolios of single-family homes for rent. All this demand for single-family rentals comes at a time when housing prices are at all-time highs and housing inventory is low.
Mynd just announced funding to spend as much as $5 billion on purchasing rental properties. Invitation Homes (NYSE: INVH), which currently has over 80,000 homes in its portfolio, announced a joint venture last year, which should allow it to continue to rapidly expand the amount of homes it owns.
Fundrise has been acquiring existing homes as well as new homes. Last year, for example, it acquired a new community of 124 homes from D.R. Horton for $32 million.
In a written interview, Fundrise CEO Ben Miller told Millionacres more about this strategy, saying, "We believe ‘build-to-rent’ single-family rental (SFR) is one of the most attractive real estate investments available today because of three separate mega trends: 1) the millennial generational shift toward single-family housing; 2) advances and adoption of remote work technology; and 3) the proptech revolution is lowering the cost of execution and operations of small-scale real estate like single-family homes."
Supply chain woes continue
Homebuilders are experiencing unprecedented demand, not just from individual homebuyers but from these institutional buyers as well. This should be good news, but the increasing cost to build has many of the most prolific builders feeling mindful of their balance sheets. Escalating lumber costs are just one factor.
This is also a concern for Miller. He said: