It used to be that Wall Street had little interest in single-family home rentals, especially in low-income areas.
Times have changed.
Bloomberg News reports that companies like Promise Homes Co. are gobbling up properties in working-class neighborhoods all over the country. The company just paid $22 million to Invitation Homes Inc. for 220 homes it owned in the Atlanta area.
Promise is a startup company funded by Wall Streeters Tony Ressler and Michael Arougheti of Ares Management. Their strategy in buying rental homes is focused on helping tenants improve their finances so that they continue to rent, thus minimizing turnover.
“Larger companies are getting rid of underperforming assets,” said Jade Rahmani, a managing director at Keefe, Bruyette & Woods Inc. “That’s leaving an opening for companies to move more downstream, companies targeted to the affordable market, to lower-income residents -- because there still could be an opportunity to earn a return."
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