McDonald’s was only meat and potatoes until America fell in love with fast food. Facebook was a fad for college kids until everyone had to have their own site to be social. Wall Street’s clients were largely America’s upper crust until 401Ks and IRAs democratized securities trading and launched the most prosperous era Wall Street has ever known.
These are examples of how the mainstreaming of products and services breaks down barriers that restricted access to only a few. Mainstreaming transforms entire industries, creates new wealth and changes the way Americans live.
The next business for ripe for mainstreaming is residential real estate investing. Over the past seven years, investors have saved millions of American homeowners from disaster, rehabilitated more than four million foreclosures and turned them into single family rentals, the fastest growing rental category, just in time to house millions of families unable or uninterested in owning homes.
The Secret is Out
The secret is out about real estate investing. The magic of cash flow and appreciation working together, the relative stability of the real estate economy, the appeal of owning property and providing a home to deserving families—for these and other reasons interest in investing in property continues to grow.
Since 2007, millions of individuals and small partnerships have discovered the magic of real estate. Their success caught the attention of some of the nation’s largest private investment companies. Backed by billions from many of America’s wealthiest private equity investors, they have bought up over 200,000 homes. Now they are securitizing them to sell to institutional investors worldwide because the profit potential of single- family rental homes is so high and the risk is so low.
At the same time, individual investors are looking for an alternative to securities. Public confidence that the stock market will rise in the succeeding year is at its lowest since 1998. Interest in real estate investing is on the rise and it is not diminishing as foreclosures diminish and property values rise. That’s because real estate:
- Creates a constant cash flow that pays back investors in good times and bad;
- Can be leveraged to increase investors’ buying power; and
- Appreciates over time to create, with cash flow, an extraordinary return on investment that other investment options can’t match.
For middle- aged investors seeking to improve their retirement fund in the remaining years in the workplace, young investors who realize how real estate offers tremendous potential and entrepreneurs looking for a better alternative, real estate is increasingly popular.
Until now, however, investing in real estate, especially properties in distant markets that offer the best prospects. Finding the right market and the right property, securing financing, getting it rent-ready, retaining the right property management—these and other tasks are often more than the average investor can handle.
Now, companies like HomeUnion are reducing the learning curve and taking the guesswork out of real estate investing. HomeUnion’s new investment platform matches investors with properties based on each individual’s investing goals and interests. Each investor fills out an extensive online interview that feeds critical data into the site’s algorithm to create a profile that is used to select markets, price range and particular properties. HomeUnion also provides professional support from expert local brokers, lenders and property managers in each market. In a matter of days, an investor can be the proud owner of a new property in one of the nation’s best markets, ready to receive his first rent check.
Just as the first burgers, Facebook pages and 401ks seemed odd and foreign at one time, the process of mainstreaming them began with familiarization and accessibility. Today, real estate investing is the province of the very rich, the investor-landlord, or the full time professional. Tomorrow, it will be open to everyone who wants to share in its rewards.