Invesco (NYSE: IVZ) clearly has something in Mynd for the burgeoning single-family rental (SFR) market in the United States. The investment manager's real estate arm -- Invesco Real Estate -- is the lead investor in a $40 million financing round that's expected to help propel Mynd Management into a buying spree that could reach $5 billion and end up making the proptech platform one of the largest SFR buyers and managers in the land.
The companies announced the deal this week. Oakland, California-based Mynd already has more than 7,000 homes under management in 25 markets, where it uses its technology to provide investors, landlords, and tenants with an all-in-one platform for SFR buying, managing, searching, and renting.
The deal announced this week calls for the start-up to use the investment to scale up its operations and handle the investment of $5 billion across multiple strategies to acquire 20,000 homes in support of the capital deployment goals of Invesco Real Estate, which says it already has $83.2 billion in assets under management.
"Our partnership with Invesco Real Estate represents a significant moment for the SFR industry and is a key validator for Mynd's vision, business model, and technology," said Mynd CEO Doug Brien, who co-founded the company in 2016.
"Our goal has always been to unlock opportunities for investors across the country, and now we'll be able to do that at an incredible scale," he said.
'A tremendous opportunity in an emerging asset class'
Invesco Real Estate's investment will allow Mynd to scale up its entire business, including expanding the capabilities of its acquisitions and renovations arm.
"We're looking forward to partnering with the Mynd team as they expand their offerings and make it possible for our client capital to grow SFR portfolios -- all online," Pete Cassiano, managing director at Invesco Real Estate, said in the announcement.
"We know SFR represents a tremendous opportunity to invest in an emerging asset class that will allow us to provide a high-quality living experience to Americans seeking their next home," Cassiano said.
Others are seizing that opportunity, too, as more young Americans turn to rentals to get a home without a down payment, mortgage, or maintenance expenses, and small investors don't have to compete with the big guys to buy a rental property of their own.
Here's how you can get involved
You can buy shares in a real estate investment trust (REIT), for starters. Invitation Homes, for example, has a portfolio of more than 80,000 such properties, making it the largest SFR owner in the country. American Homes 4 Rent is another contender and has taken up building entire communities at a time.
Mynd CEO Brien told Bloomberg that his company will continue to build out its management platform for landlords and tenants while it grows from buying as many as 50 homes a month itself to a thousand a month next year.
"As traditional commercial real estate investors that invested in multifamily as their key strategy have moved into single-family rental, we're seeing the market flooded with institutional capital," Brien said in an interview with the business news service.
Bloomberg said other investors in the funding round for Mynd include Thomvest, Common Fund, Squarepoint, Assurant, DivcoWest, and Jackson Square Ventures.
Meanwhile, other major institutional investors already in include JPMorgan Chase and Brookfield Asset Management. And a big one recently announced is a $1.25 billion equity commitment by Centerbridge and Allianz Real Estate to partner with homebuilder Lennar Corp. to buy SFRs in what they call the Upward America Venture. Their goal: to buy more than $4 billion in new single-family homes and townhouses from Lennar and other homebuilders.
The Millionacres bottom line
The market and the metrics both make SFR investing particularly attractive right now, as The Motley Fool's Brent Nyitray explains here. Individual investors have a lot of opportunities, too, to get involved, and while the price of entry just keeps getting higher if you're trying to buy a rental property on your own -- at least in most markets -- you have plenty of proptech help if you do, and you have plenty of other options if you want to buy stock in a promising equity on the exchanges.