Buying Scattered-Site Single-Family Portfolios When Others Can't

We love a good apartment deal and will only go after one when it makes sense. Ohio has not faced the same kind of distress as some other markets, and the room is still crowded when a good deal comes available.

How buyers stand out

When deals come available, buyers have to differentiate themselves. The obvious way is the highest price. Groups also stand out through credibility, ability to close, and ease to work with. Nobody wants a deal locked up for three months and a buyer who fails to close, so the highest bidder does not always win.

We have some pull in this market through a strong local reputation and a history of closing with various brokers. None of that changes how crowded the room is. So we stopped trying to be a sharper version of everyone else and looked at where we already stand alone.

Slocomb Reed brought up a Bruce Lee quote during our annual recap last year: "Be like water making its way through the cracks."

Where the crowd is

• A lot of groups got shaken out of their 2022 purchases.
• Legislative tailwinds are scaring portfolio buyers off. The ROAD to Housing Act is one example.
• Most syndicators focus on single-site assets with on-site property management.
• The property managers with the operational chops to run scattered single-family rentals do not have the investment arm to own them.

Where we sit

That gap is where we sit. The playbook is to build the company first, run the operations clean, and let what we are actually good at decide where we go. That is how we ended up pursuing scattered single-family at scale while most of the market moves in the other direction.

For the mechanics, read why the friction in these portfolios creates the opportunity and how to value a scattered-site portfolio.