Following the announcement that the federal government will be implementing a pilot program in the first quarter to sell Fannie Mae, Freddie Mac and Federal Housing Administration REO homes in bulk to potential investors, two California companies are in the works to develop their own rental platform.
Private equity fund GI Partners will be investing $250 million in Waypoint Real Estate Group based out of Oakland, Calif. Waypoint developed a process of acquiring foreclosed homes, renovating them before leasing the properties to residents. Waypoint has been in business for three years and since opening has acquired 1000 homes in California. Over the next two years they plan on buying and leasing $1 billion in single-family rental homes.
“Our approach to buying and renovating distressed homes and leasing to residents who are committed to a path to future home ownership is a viable solution to our nation’s housing crisis,” said the managing director and co-founder of Waypoint Real Estate Group, Colin Wiel.
A propriety technology is used by Waypoint to successfully identify residential real estate markets that have a strong rental demand that could potentially benefit from their “REO-to-rental” model. “Waypoint has not only developed an effective strategy for investing in distressed single family homes, but has built a business that has a positive social and economic benefits in the communities in which they invest,” said Ric Magnusson, executive managing director of GI Partners.