Investing In The Consolidation Of Single Family Rental Homes

Broadstone REAL ESTATE . LLC PRESENTS RENTING AMERICA INVESTING IN THE CONSOLIDATION OF SINGLE FAMILY RENTAL HOMES LESS HOMEOWNERS AND MORE RENTERS THAN EVER THE HOMEOWNERSHIP RATE HAS DROPPED EVERY YEAR FOR THE LAST 9 YEARS FROM 69.1% (Q1 2005) TO 64.8% (Q1 2014) FOR EACH 10 YEAR AGE GROUP BETWEEN 25 & 54 THE SHARE OF HOUSEHOLDS OWNING HOMES... AGES 25-34 AGES 35-44 AGES 45-54 .IS NOW AT ITS OLOWEST POINT SINCE RECORDKEEPING BEGAN IN 1976 FROM 2006-2014 115 MILLION OCCUPIED HOUSEHOLDS INCREASED BY MORE 111 MILLION THAN 4 MILLION об Q1'14 NET LOSS OF NET GAIN OF 1.8 5.8 MILLION HOMEOWNERS MILLION RENTERS THE NUMBER OF RENTER HOUSEHOLDS DEED INCREASED BY 17% SINGLE FAMILY RENTALS (SFR): IN 1973 2006 TODAY AT LEAST AT LEAST AT LEAST 14 MILLION HOMES 10 MILLION HOMES 8 MILLION HOMES ARE SINGLE FAMILY RENTALS WERE SINGLE WERE SINGLE FAMILY RENTALS FAMILY RENTALS "THE HOMEOWNERSHIP RATE IS HELD BACK BY SLOW JOB GROWTH, i TIGHT MORTGAGE CREDIT AND DECLINING AFFORDABILITY" -JED KOLKO CHIEF ECOÑOMIST, TRULIA, INC.1 INVESTORS ARE AN ESSENTIAL $. PART OF THIS EMERGING ASSET CLASS INVESTORS ACCOUNTED FOR ONE OF EVERY FIVE SINGLE FAMILY HOME SALES NATIONWWIDE IN 2012 BUT, INSTITUTIONAL INVESTMENT STILL ISN'T KEEPING PACE WITH SFR DEMAND... BREAKDOWN OF SFR INVESTOR OWNERSHIP TODAY 50-100 PROPERTIES 101-250 PROPERTIES PROPERTY 2-10 PROPERTIES 11-50 250+ PROPERTIES PROPERTIES 51% 35% 7% 2% 4% MAJOR INSTITUTIONAL PLAYERS HAVE ACQUIRED LESS THAN 250,000 OF THE 14 MILLION RENTAL HOMES. THAT'S LESS THAN 1.8%! THE CONSOLIDATION IS JUST BEGINNING WE ARE AT THE FRONT END OF A POTENTIALLY HISTORIC CONSOLIDATION OPPORTUNITY RENOVATED & STABILIZED SFR PORTFOLIOS ARE TRANSITIONING MORE CONSERVATIVE, CORE INVESTMENT VEHICLES SMALLER OPERATORS ARE SELLING THEIR PORTFOLIOS TO REALIZE THEIR PROFITS SELL FROM STABILIZING DISTRESSED PROPERTIES BUY PROFESSIONAL MANAGERS CONTINUE TO SEEK AND PURCHASE PROPERTIES BENEFITS OF CONSOLIDATION WITH MORE RENTERS THAN EVER, THIS HIGHER RENTAL DEMAND IS DRIVING THE NEED FOR A BETTER PROCES. Smaller regional operators National, professional asset managers & operating companies CENTRALIZED MANAGEMENT OF A WELL-CAPITALIZED, REPEATABLE PROCESS LARGE AMOUNTS OF CAPITAL EXPENDITURES ARE BEING DIRECTED TOWARD: CONSOLIDATION BENEFITS BOTH RESIDENTS AND IMPROVING THE PROPERTIES SOFTWARE & TOOLS TO MANAGE THE ENTIRETY OF THE LONG-TERM MANAGEMENT INVESTORS. A REPEATABLE PROCESS LEADS TO BETTER A NEW CLASS OF PROPERTY HOMES AND BETTER MANAGERS IS EMERGING INVESTMENTS. CONSOLIDATORS ACHIEVE ECONOMIES OF SCALE OPTIMIZED OPERATIONS AND ARE ABLE TO LOWER OPERATING IMPROVED RESIDENT SERVICES EXPENSES INVESTORS & RENTERS BENEFIT! HOW DOES IT WORK? PRE-STABILIZATION: STABILIZATION: SHORT TERM PROJECT LONG TERM HOLD FLIP INVEST PURCHASE THE STABILIZED HOMES FIND AND BUY PROPERTY REHAB AND RENOVATE MANAGE THE LOCAL MANAGERS LIST THE HOME FOR RENT ROUTINE MAINTENANCE TO KEEP RESIDENTS HAPPY RENT THE HOME HAPPY TENANTS RENEW LEASES THERE ARE TWO WAYS TO INVEST IN THIS ASSET CLASS: OPPORTUNISTIC PHASE CORE PHASE ENTREPRENEURIAL INSTITUTIONAL HIGHER RISK LOWER RISK PROS PROS PROPERTIES ARE ALREADY RENOVATED HIGH RETURN POTENTIAL PROPERTIES ARE ALREADY RENTED QUICK RETURN POTENTIAL PREDICTABLE CASH FLOW FINANCEABLE OWN A TANGIBLE ASSET POTENTIAL FOR RENT INCREASES CONS NO RENT GUESSING X HIGHER RISK X VERY HANDS-ON X NO CASH FLOW X NOT FINANCEABLE X DIFFICULT TO SCALE X RENT GUESSING LARGE-SCALE CONSOLIDATION OPPORTUNITY POTENTIAL FOR LIQUIDITY PROVIDES AN ATTRACTIVE LONG TERM HOUSING OPTION FOR RENTERS CONS X LOWER RETURN POTENTIAL SOME COMPANIES TRY TO DO ONE OR THE OTHER, OR BOTH WHY INVEST IN A STABILIZED PORTFOLIO? THE MESSY WORK IS ALREADY DONE THE HOMES ARE ALREADY RENOVATED THE HOMES ARE ALREADY RENTED ATTRACTIVE CURRENT RENTAL INCOME YIELD POTENTIAL FOR RENT GROWTH AND LONG-TERM CAPITAL APPRECIATION THIS CONSOLIDATION IS HAPPENING NOW! TO LEARN HOW TO INVEST IN A STABILIZED PORTFOLIO, PLEASE VISIT WwW.BROADTREEINFO.COM BROUGHT TO YOU BY Broadstone REAL ESTATE. LLC SOURCES: "wwW.BLOOMBERG.COM/NEWS/2014-04-29/U-S-HOMEOWNERSHIP-RATE-FALLS-TO-THE-LOWEST-SINCE-1995.HTML www.TRULIA.COM/TRENDS/CATEGORY/HOUSEHOLD-FORMATION www.CNBC.COM/ID/101624168 www.CNBC.COM/ID/101680005 www.REALTYTRAC.COM www.COSTAR.COM/NEWS/ARTICLE/IS-SINGLE-FAMILY-RENTAL-MARKET-POISED-FOR-CONSOLIDATION-/151554 INSIDEREALESTATE.HERALDTRIBUNE.COM/2014/05/15/SINGLE-FAMILY-RENTAL-MARKET-PREDICTED-GROW/ SINGLE-FAMILY REO: AN EMERGING ASSET CLASS, 3RD EDITION, KBW; SEPT. 12, 2013 SECURITIZATION OF SINGLE-FAMILY RENTALS, INDUSTRY UPDATE. KBW: JAN, 13, 2014 "THE STATE OF THE NATION'S HOUSING 2013" JJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY "RESIDENTIAL VACANCIES & HOMEOWNERSHIP IN THE FIRST QUARTER 2014" US CENSUS BUREAU NEWS www.CENSUS.GOV/CONSTRUCTION/NRC/HISTORICAL_DATA www.CENSUS.GO/HOUSING/HVS/DATA/HISTTABS.HTML. www.USNEWS.COM/OPINION/ECONOMIC-INTELLIGENCE/2014/05/14/WEAK-HOUSEHOLD-FORMATION-HOLDS-BACK-HOUSING-MARKET K.K.