Goldman Sachs (NYSE: GS) is at it again. After Fundrise announced its new $300 million credit facility from Goldman Sachs in order to build single-family rentals across the Sun Belt, Goldman Sachs is now backing a new single-family residence (SFR) platform, Entera, which helps investors find and finance rental properties in 24 markets across the nation.
A new way for investors to buy SFRs
The company, which started in 2018, is one of the largest sources for on- and off-market inventory of single-family properties. Its database, which sources inventory from iBuyers, off-market auctions, the MLS, and beyond, allows investors to search for their ideal rental or fix-and-flip investment property.
The platform allows investors to estimate costs, run numbers, and manage their portfolio within the software, in addition to securing financing for the property by working with Entera's brokerage service. Since its inception, the company has completed nearly $1 billion in transactions, and transaction volume grew five times year over year.
The Series A funding raised $32 million and was led by Goldman Sachs, with additional backing from existing investors Bullpen Capital, Craft Ventures, and Valuestream Ventures. The funding will help the company expand its current services and platform. Goldman Sachs sees this investment as helping reduce barriers for investors in the single-family market, one experiencing record-high demand.
The future of SFR
House flipping is on fire as investors try to meet homebuyer demand in an undersupplied and rapidly appreciating real estate market. A shift in tenant preferences favoring single-family rental properties over apartments or multifamily dwellings is putting even more pressure on the single-family market. These factors, coupled with expensive real estate prices, means affordability is put into question, turning a number of aspiring buyers into long-term renters. There is clear long-term demand for the SFR industry, particularly in Sun Belt regions, and Goldman Sachs is betting big on this through its latest investments with Fundrise and now Entera.
The Sun Belt's population is rapidly expanding, with major inward migration fueled by warmer weather, a lower cost of living, and ample job opportunities. Most of the markets Entera operates in are located in Sun Belt regions with strong growth and diverse job economies, meaning Goldman Sachs investments should pay off based on where things are trending.
A lot of money is being funneled into the SFR market, and while this competitive market doesn't leave a ton of room for opportunity, hopefully its continued attention will help even out the market and make the new moves for Entera a beneficial one for real estate investors.