2017 California

Investor Survey
 Survey methodology & objectives
Methodology
293 online surveys conducted July-August 2017
Respondents: REALTORS who have worked with
investors buyers in the past 12 months
Sample error: 3% at a 95% confidence interval

Objective
Detail whos investing (investor profile)
What theyre buying and why
How theyre paying and what the objectives are
What the negotiation/process was like
Strategic/relationship considerations for REALTORS
The Investor Business
 Business is brisk generally for investors too
18
16.4 Number of
16 15.2 14.8 Type Transactions
14 13.1
12
Median 3.0
10
8
6.4 Mean 4.6
6 4.9 4.6
4.0 80th
4 2.7
Percentile 6.0
2
0
2013 2014 2015 2016 2017 Max 50.0
Average Investor Transactions Average Total Transactions
Q: How many investor transactions did you close in the past 12 months?
 In some ways, its the only game in town
Returns by Investment Type

13.4% 13.0%
12.0%

9.5%

7.2%
6.0%
5.5%

2.1% 1.8% 2.2%

0.9% 0.9% 0.9%

-0.1%

-2.2%

5-Year CD 10-Year Bond Dow Jones S&P 500 Home Prices

2015 2016 2017
 And its still cheap to play with others money
January 2010 September 14, 2017
6
MONTHLY WEEKLY
5
3.88 3.78
4
3.15 3.13
3

2
FRM
ARM
1

SERIES: 30Yr FRM, 5Yr ARM

SOURCE: Freddie Mac
 Investor business bounced back a bit as result
45%
40% 39%

35% 32%
31%
30%
26%
25%
21%
20%
15%
10%
5%
0%
2013 2014 2015 2016 2017

Q: How many investor transactions did you close in the past 12 months?
Q: How many total transactions did you close in the past 12 months?
Who Is Investing?
Client Demographics
 More businesses getting into the mix
80%
72.0%
69.0%67.9%
70%

60%

50%

40%

30%
22.0%22.0%23.5%
20%

10% 5.3%
0.8% 1.9% 0.4%
3.1% 2.7% 2.9% 2.3% 4.3%
0%
LLP Other Corp LLC Individual
2015 2016 2017

Q: Was your client a(n)?

 Mostly older, individual investors driving market

Number of Agents Age of

180
165 Type Investor
160
140
Median 50
120
100
Mean 50
80
60
57 80th
Percentile 60
40
20 13
7
1 Max 75
0
Individual LLC LLP Corporation Other
Q: Was your last investor client a(n):
Foreign investors not swooping everything
Investor Country

Taiwan 0.6%

Other 1.2%

Mexico 0.6%

Japan 0.6%

China 3.0%

Canada 0.6%

USA 93.3%

0% 50% 100%
 Foreign investors made up slightly more
100% 5% 6% 7%
90%
80%
70%
60%
50% 95% 94% 93%
40%
30%
20%
10%
0%
2015 2016 2017
U.S. resident Foreigner

Q: What is your clients country

of permanent residence?
 Mostly from the 1%, but not all
Investor Incomes
350,000
300,500
300,000
256,407 248,791
250,000 225,000 237,500
220,769
200,000
150,000
100,000
100,000
50,000
-
Entrepreneur Foreign Inheritance Mom/Pop Other Tech IPO Total
Investor
Median Mean
 Increase in smaller investors this year
Median
$300,000
$250,000
$250,000
$200,000
$200,000
$160,000 $155,000
$150,000
$150,000

$100,000

$50,000

$0
2013 2014 2015 2016 2017

Q: What is your clients annual income/revenue?

 Some groups missing an opportunity
Investors by Race
60%
52.1%
50%
38.8% 37.8%
40%

30%
19.6%
20% 16.0%
14.0%
9.8%
10% 5.6%
2.5% 3.8%
0%
Asian Black Hispanic Other White
% of Investors % of Population
 Not only not getting better, getting worse
100%
90%
80%
49% 53% 52%
70% 60% 55%

60%
50%
40% 20%
29% 19% 24%
30% 17%
10%
20% 13%
14% 11% 13%
10% 9.5% 16.0%
7.9% 9.7% 7.8%
0% 0.7% 2.2% 3.6% 2.4% 2.5%
2013 2014 2015 2016 2017
African American/Black Other Hispanic/Latino Asian Caucasian/White

Q: How would you describe your clients ethnic background?

 Maybe opportunity to create investors?
Investor Income by Race
$400,000 $379,444

$350,000

$300,000
$264,841
$247,080
$250,000

$200,000

$150,000 $138,571
$103,500
$100,000 $81,667

$50,000

$0
Asian White Other Hispanic Black Total
 The Tech IPO still a unicorn, but lucrative!
Client Financial Background Client Net Worth
Inheritance
3% Foreign
Investor Total 6.2
Other 4%
Tech IPO 25.5
11%
Tech IPO
2% Other 2.3

Mom/Pop Mom/Pop 2.2

18%
Inheritance 0.8

Foreign Investor 1.0

Entrepreneur
62%
Entrepreneur 7.5

0 20
$Millions

Mean Median
How Sophisticated
Are Investors?
Client Real Estate Background
 Generally, investors are pretty savvy

Client Real Estate Knowledge

160 152

140

120

100

80
65
60

40
21
20
5
0
This Photo by Unknown Author is licensed under CC BY-SA
Expert Knowledgeable Limited Needs
Knowledge Handholding
 And getting savvy-er

50.0%
Extremely knowledgeable/experienced 60.0%
62.6%

37.0%
Knowledgeable, but fairly inexperienced 33.0%
26.7%

10.2%
Limited knowledge, first time investor 5.5%
8.6%

Not at all knowledgeable, required a lot of 2.9%

1.5%
oversight/consulting 2.1%

0% 10% 20% 30% 40% 50% 60% 70%

2015 2016 2017

Q: How would you describe your last investor

clients real estate market knowledge?
 Some clients need more hand-holding
Client RE Knowledge by Type
80.0%
70.0% 66.7%
60.0% 57.6%

50.0%
41.4%
40.0% 33.3% 33.3%
28.6%28.6% 27.8%
30.0%
20.7%
20.0%
10.0% 6.1%
0.0%
Entrepreneur Foreign Investor Mom/Pop Other Tech IPO
% w/Expertise % w/Limited Knowledge
 Buying less other properties, but some BIG ones
7.0 74% 80%
6.5
6.0 64% 70%

% Who Own Other Properties

# of Properties

60%
5.0
47% 50%
4.0
40%
3.0
30%
2.0 1.8
2.3 20%
1.0 10%

0.0 0%
2015 2016 2017
% who purchased other properties Average # of properties

Q: How many other properties did your last investor client purchase within the past 12 months?
 2017 Investors: Not my first rodeo
% who own other properties Average # of other properties
9.0 8.3 100%
90% 91%
8.0 83% 83% 85% 90%

% Who Own Other Properties

# of Properties

7.0 6.5 6.4 80%

6.0 70%
6.0 5.6
60%
5.0
50%
4.0
40%
3.0
30%
2.0 20%
1.0 10%
0.0 0%
2013 2014 2015 2016 2017

Q: How many other investment properties does your client own?

 Most own other investment properties
Avg. # of Properties
# of 5.0
Type Properties 4.5
4.5
4.2
4.0
4.0
3.5
Median 3 3.0 2.9
2.5
2.0 1.8
Mean* 6 1.5
1.5
* Excludes 1,900
1.0
0.5

Max 1,900 0.0

Entrepreneur Inheritance Mom/Pop Foreign Other Tech IPO
Investor
Vast majority of those are here at home
More specifically, here in CA
mostly in core

Some action along resort areas

Tahoe
Central Coast
Bulk own in 3 distinct Cores
Southern California metro
Coastal as well as Inland Empire
Becoming 1 mega-region?
Core Bay Area
Not much in Sonoma, Solano, Napa
East Bay particularly popular
Sacramento
 SoCal investments on the rise more deals
100% 5% 3% 4%
1% 7%
90% 15% 3%
20%
21% 21% 2%
80% 17%
70% 20%
60% 41%
33%
50% 44% 48%
40% 42%
30%
20% 50% 42%
29% 26%
10% 20%
0%
2013 2014 2015 2016 2017
Other CA Southern CA Northern CA Another country Another state

Q: Where are those properties located?

 What Are
Investors Buying?
 Single family purchases pop back up
90%
80% 78% 76%
73.0%
72.0%70%
70%
60%
50%
40%
30%
20.5%19%
19.4%
20% 14% 17%
10%
10% 7% 6.7%7.0% 7%
1% 0.9%0.9% 0% 0%
0%
Single family home Multifamily Bulk sale Other
2013 2014 2015 2016 2017

Q: What type of property did your investor client purchase?

 Some have more appetite for other types
Property Type by Type of Investor
100% 2.0% 0.0% 0.0% 0.0% 1.2%
90% 14.3% 20.0%
14.1% 24.1% 16.8%
80% 27.8%
70% 18.2% 20.0% 16.8%
60% 17.2% 11.1%
50% 100.0%
40% 85.7%
30% 58.6% 55.2% 55.6% 60.0% 59.6%
20%
10%
0%
Entrepreneurs Mom/Pop Other Foreign Inheritance Tech IPO All Investors
SFR Duplex/Triplex Townhouse/Condo Other Raw land Apartments (4+ units)
 Older investors willing to dabble more
Property Type by Age of Investor
80% 75.0%
70%
60%
50%
40%
30% 24.6%
19.4%
20%
10% 5.3% 3.2%
0%
SFR Duplex/Triplex Townhouse/Condo Other Raw land Apartments (4+
units)

Under 40 40-49 50-59 60+ All Investors

 Businesses shy from attached homes
Type of Property by Investor Category
70% 64.1%
60.0% 61.3%
60%
50%
40%
33.3%
29.2%
30%
20.5%
20%
10% 7.7%
3.0% 4.5% 2.4%3.8%2.9% 3.8%2.1%
1.2%
0%
SFR Detached Attached Other Raw land Multi-Family
Individual Business All Investors
 Several large multi-unit purchases this year
14.0 13.0*
12.0

10.0
# of Units

8.0
6.6
6.0
3.8 4.0
4.0 3.5

2.0 1 1 1 1 1
0.0
2013 2014 2015 2016 20017
Average Median

Q: How many units did the property have in your last investor transaction?
 In general, family homes or smaller MFRs
Avg. Sq. Ft. Avg. Units
8,365 8,532
7,896 38.7

12.0 13.0
1,922

1.4

Attached Multi-Family SFR Total Attached Multi-Family SFR Total

Detached Detached
SFR detached is about young families
Property Characteristics
5.4 5.2
5.0

3.4
2.9 2.7
2.1 2.1 2.2

Attached Multi-Family SFR Detached

Beds Baths Parking Spaces
Businesses drawn to same units as people
Avg. SFR Property Characteristics by Type of Investor

3.3 3.4

2.8 2.7
2.2 2.2

Beds Baths Parking Spaces

Business Individual
 Buying higher-end units? Up 2X from market
Median List Price
$469,000
$409,500
$381,500
$322,500
$307,500

2013 2014 2015 2016 2017

Q: What was the initial listing price?

 Similar growth in closed prices
Median Sale Price
$470,000
$410,000
$375,000
$320,000
$292,000

2013 2014 2015 2016 2017

Q: What was the final sale price?

Core draws em

Some action along resort areas

Tahoe
Central Coast
Bulk own in 3 distinct Cores
Southern California metro
Coastal as well as Inland Empire
Becoming 1 mega-region?
Core Bay Area
Not much in Sonoma, Solano, Napa
East Bay particularly popular
Sacramento
The importance of jobs: cities on the rise
2% 5% 3%
13% 9%
13%

46% 46%
47% Other
Rural
Suburban
Urban

40% 41%
35%

2015 2016 2017

Q: How would you describe the location of the property purchased?

What you buy depends on where investing
Type of Home by Type of Geography
5.0% 3.6% 4.5%
18.2%
21.4%
9.1% 29.3%
43.0% 9.1%

70.5% 63.6% 61.2%

49.0%

Urban Suburban Rural Total

SFR Detached Attached Other Raw land Multi-Family
Why Are The Buying?
 Boomers?? Wont move or sell investments

Years Expected to Hold Property Avg. Length of

Ownership (Years)
9.3
7.9 8.1
8.0
11.4

6.1

4.2

2013 2014 2015 2016 2017 Business Individual

Q: How many years does your client intend to keep the property?
 The real Trump Bump: Bullishness!
20% 19%
Expected Rate of Return
18% 17%
17%
16% 14%
13%
14%
12%
10%
8%
6%
4%
2%
0%
2013 2014 2015 2016 2017

Q: What is the expected rate of return on the property investment?

 Future Price Predictions are Positive
100%
5.4%
90% 16.1%

80%
70%
60% Don't know
79.4%
50% 70.4% Up
Flat
40%
Down
30%
20%
10% 14.8% 7.8%
0% 0.4% 5.8%
In 1 year In 5 years

Q: Do you think real estate prices in the neighborhood

where the property is located will go up, down or stay flat?
 Not all rates of return w/9 years of tenure
Expected Price Appreciation
30%
27%
25% 25%
25%

20%

15%

10%

5%

0%
2015 2016 2017

Q: How much does your last investor client expect the

property to appreciate by the time he/she sells?
 Motivations dictate properties of interest
Primary Motivation for Purchase
80%
71.4%
70%

60%
50.7%
50%
40.0%
40%

30% 24.5%
20%

10%

0%
Single-Family Attached Multi-Family Land
Bargain price Annual rental income Short-run gain Future price appreciation
Tax purposes Other Safety and/or hedge
 Biz wants deals; individuals mostly rents
Primary Motivations by Type of Client
45%
40% 38.5%
35.6%
35%
30%
25% 21.8%
20% 17.9% 18.4% 17.8%
14.1%
15% 11.0% 11.0%
10%
5.1% 3.7% 2.5%
5% 1.3% 1.3%
0%
Business Individual
Annual rental income Future price appreciation Bargain price
Tax purposes Short-run gain Safety and/or hedge
Other
 Less focus on location and returns
Location 38.0%
34.2%

Rate of return 30.3%

25.1%

Good price 17.0%

21.4%

Future development potential 6.9%

9.5%

Size 6.6%
2.9%

Other 1.8%
7.0%

0% 10% 20% 30% 40%

2016 2017

Q: What was the single most important reason that your last
investor buyer chose to purchase that particular property?
 Blip for flips? Rental share is down.
100%
7% 10% 12% 13%
90% 14%

80% 20%
26% 26%
70% 28% 30%
60%
50%
40%
73%
30% 65% 62%
58% 57%
20%
10%
0%
2013 2014 2015 2016 2017
Rental Flip Other

Q: What was the intended use of the property?

 Probably due to more business investors
Rent/Flip by Type of Client
100%
90% 12.7% 12.7%
80% 18.2%
70%
60% 57.7%
50%
40%
69.1%
30%
20%
29.6%
10%
0%
Businesses Individual
Rent Flip Other
 Fewer investors spending money: turn-keys
100%
9% 12% 9%
90% 17% 17%
80% 22% 18% 21%
70% 22% 19%

60%
50% 33%
39%
51% 39% 40%
40%
30%
20% 36%
30%
10% 18% 22% 23%
0%
2013 2014 2015 2016 2017
None Minor cosmetic Major cosmetic Major remodeling

Q: What type of rehabilitation/remodeling was done to the property?

 Those that did rehab, spent a lot more
Median Cost of Rehab
$25,000

$20,000
$20,000

$15,000
$15,000 $13,500

$10,000 $10,000
$10,000

$5,000

$0
2013 2014 2015 2016 2017

Q: How much did your client invest in rehabilitating/remodeling the property?

 Costs equate to roughly 8% of sale price
100% $10,000 (3%) $15,000 (5%) $10,000 (3%) $13,500 (3%) $20,000 (4%)
90% $9,000 (3%) $12,900 (3%)
$12,000 (4%) $15,000 (4%) $20,700 (4%)
80%
70%
60%
50% $410,000
$292,000 $320,000 $375,000 $429,300
40%
30%
20%
10%
0%
2013 2014 2015 2016 2017
Purchase Price Transaction Cost Rehab Cost
 Median rent flat despite higher prices
Median
$2,500
$2,200
$2,100
$2,000 $1,850

$1,500

$1,000

$500

$0
2015 2016 2017

Q: How much will your last investor client charge for monthly rent on the property?
 Maybe a leading indicator rents topping?
Median
$120
$100
$100

$80

$60
$50 $50

$40

$20

$0
2015 2016 2017

Q: How much will your last investor client increase the monthly rent for the next tenant?
 How are Investors
Paying for Properties?
 Still cash buyers, but with rates this low
100%
90%
80% 33% 33% 34%
45% 43%
70%
60%
50%
40%
30% 67% 67% 66%
55% 57%
20%
10%
0%
2013 2014 2015 2016 2017
Cash Financing

Q: How did your client pay for the property?

 Cash is still king for certain clients
Financing by Type of Client Financing by Country of Residence
100% 100%
90% 22.5% 90%
80% 80% 36.4%
52.1% 53.2%
70% 70%
60% 60%
50% 50%
40% 77.5% 40%
30% 30% 63.6%
47.9% 46.8%
20% 20%
10% 10%
0% 0%
Business Individual Foreign Domestic
Cash Financed Cash Financed

Q: How did your client pay for the property?

 Most Cash Funds from Personal Savings

Personal savings 46.0%

37.5%

Proceeds from previous investment 19.0%

18.4%

Private investors 19.0%

13.8%

1031 exchange 8.9%

9.9%

Foreign bank 5.6%

4.0%

Other 10.0% 16.4%

Hard Money and Biz
Proceeds

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

2016 2017

Q: What was the source of the cash funds in your last investor transaction?
The Negotiation Process
and Dealmaking
 Sellers still getting top dollar in 2017
Sales-to-List Price Ratio
101%
100.1% 100.1%
100%
99.2%
99% 98.3%
98%
97%
96%
95.0%
95%
94%
93%
92%
2013 2014 2015 2016 2017
 Businesses throw weight around
Sales-to-List Price Ratio
106%
103.9%
104%
102%
100% 99.7%
97.9% 98.3%
98%
96%
94%
Business Individual
Mean Median
 Businesses much more cheeky w/offers
Initial Offer-to-List Price
100.0%
99.5% 99.4%

99.0%
98.6%
98.5%
98.0%
97.5% 97.4%

97.0%
96.5%
96.0%
Business Individual Total
 Foreign investors willing to pay premium
Sales-to-List Price by Residency
110%
108.3%
108%
106%
104%
102%
100% 99.5%
98.8% 98.3%
98%
96%
94%
92%
Foreign Domestic
Mean Median
 Lots of others competing for investment units
Average
4.5 4.2
4.0
3.5
3.5 3.3 3.3

3.0
# of Offers

2.5
2.0
1.5
1.0
0.5
0.0
2014 2015 2016 2017

Q: How many offers did the property purchased by your

last investor client receive, including that of your buyer?
 But really hot for single-family homes
Number of Offers
4.0 3.8
3.5 3.5
3.5

3.0
2.7

2.5

2.0
1.6
1.5 1.4

1.0

0.5

0.0
SFR Detached Attached Other Raw land Multi-Family Total
 Others start to give Bay Area run for its $
Multiple Offers by Region
4.5
4.1
4.0
3.5
3.5 3.3
3.2
3.0
3.0
2.5 2.3
2.0 2.0
2.0
1.5
1.0
0.5
0.0
Southern Bay Area Central Sacramento Central Far North Another Total
California Valley Metro Coast State
 Those are the areas to watch heat up
California Job Growth
Multiple Offers by Region
Shasta 5.2%
4.5 4.1 Madera 4.3%
Napa 4.2%
4.0 3.5 Ventura 3.5%

3.5 3.3 3.2 Butte 3.0%

3.0 Tulare 2.9%
3.0 Modesto
Yuba 2.6%
2.9%

2.5 2.3 Inland Empire 2.4%

2.0 2.0 Monterey 2.2%
2.0 Santa Cruz
Kings
2.1%
2.1%
1.5 Imperial 1.9%
Kern 1.9%
1.0 Santa Barbara 1.8%
Fresno 1.8%
0.5 San Luis Obispo 1.7%

0.0 San Francisco

Merced
1.7%
1.7%
East Bay 1.7%
Sacramento 1.5%
San Diego 1.5%
Santa Clara 1.0%
San Joaquin 0.9%
Solano 0.9%
Los Angeles 0.9%
Sonoma 0.0%
Orange County
-1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%
 Moving even faster than the market overall
Median Days on the Market
35
30
30

25 23

20
15 15 14
15

10

0
2013 2014 2015 2016 2017

Q: How many days was the property on the market?

 Inventory issues in popular property types
Median Time on Market
120
100
100

80
60
60
45
40

20 11 14

0
Attached SFR Detached Raw land Multi-Family Other
 Driving up competition for those units!
Sales-to-List Price by Property Type
106%
104.3%
104%

102%

100% 99.5%

98%
96.5%
96% 95.1%

94% 93.6%

92%

90%

88%
SFR Detached Attached Multi-Family Raw land Other
 Transaction costs rise more than prices
Median Cost
$25,000
$20,700
$20,000
$15,000
$15,000 $12,000 $12,900
$9,000
$10,000

$5,000

$0
2013 2014 2015 2016 2017

Q: How much did it cost to purchase the property?

Strategic Considerations
& REALTOR Relationship
 Finding deals takes patience in this market
Average
12.0
9.9
10.0
7.8
8.0 7.0
# of Weeks

6.8
5.9
6.0

4.0

2.0

0.0
2013 2014 2015 2016 2017

Q: How many weeks did you spend looking for a property with your client?
 Many had to go to several properties to close
4.5 4.2 90%
4.0 80%
3.5 70%

% Multiple Offers
3.0 2.7 2.8 60%
# of Offers

2.5 2.3 50%

2.0
2.0 79% 40%
69%
1.5 63% 30%
54% 57%
1.0 20%
0.5 10%
0.0 0%
2013 2014 2015 2016 2017
% Multiple Offers Average # of Offers

Q: How many offers did your client make on other properties?

 Especially businesses trying for deals
Other Properties Bid On by Type of Investor
4.5
4.0 70.4%
3.5
3.0
2.5
2.0
1.5 67.9%
1.0
0.5
4.1 2.2
0.0
Business Individual
Number of Offers % Multiple Properties
 Keep vehicles in good repair, lots of showings
Average
12.0 11.1

10.0
8.7 8.9
8.4
# of Properties

8.0
6.9

6.0

4.0

2.0

0.0
2013 2014 2015 2016 2017

Q: How many properties did you view with your client prior to the client making a purchase?
 Still a traditional business

36.0%
Previous client 29.0%
28.0%

17.0%
Referral 22.0%
22.2%

11.0%
Friend 12.0%
16.5%

11.0%
Client found me online 8.5%
4.9%

0% 5% 10% 15% 20% 25% 30% 35% 40%

2015 2016 2017

Q: How did you establish a relationship

with your last investor client?
 MLS is still alive and well
80%
70% 67% 65%
62% 60%
60% 57%

50%
40%
30%
21%
18% 18%
20% 15% 14%
5.8% 8.0%
10% 3.7% 4.0% 5.3%

0%
2013 2014 2015 2016 2017
MLS My listing Directly from seller

Q: How did you find the property for your client?

 Still pays to work with a REALTOR
65%
MLS 57%
60%
15%
My listing 18%
14%
6%
Directly from seller 8%
5%
5%
Other 7%
7%
3%
Another agent's private listing 5%
9%
5%
Client found property 5%
5%

0% 10% 20% 30% 40% 50% 60% 70%

2015 2016 2017

Q: How did you find the property for your client?

But the disruptors are ever-present
 Not getting bang from bucks online?
100%
90%
80% 41%
46% 41%
70%
60% 19%
50% 14%
18% 17%
40% 12%
2%
30%
20% 46%
34% 33%
10%
0%
2015 2016 2017
Online Print Other None

Q: What kind of marketing do you do to attract investor clients? Please select all that apply.
 Biz: online adds; Individuals: print media
Advertising/Marketing by Medium
100%
11.1% 13.7%
90% 19.5%
80% 14.2% 12.3%
8.0%
70%
60% 31.6% 33.2%
36.8%
50%
40%
30%
20% 43.2% 40.8%
35.6%
10%
0%
Business Individual Total
None Online Print Other
 ROI is still an essential piece of information
Essential Information for Purchase Decision
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Attached Land Multi-Family Single-Family Total
Location ROI Price Comps Rents Condition Restrictions Other
 Business wants to see those COMPS too!
Essential Information by Type of Client
35%
29.5%
30% 27.2%
26.1%
24.4% 24.8% 24.7%
25%

20%

15% 14.1%

9.5%
10% 7.3%
5%

0%
Business Individual Total
Location ROI Price Rents Comps Condition Other Restrictions
 Well need to step up the analysis game
Especially if you want some big MF deals
% Performing Analysis Prior to % Performing Analysis by Property
Purchase Type
70% 120%
60% 100%
60% 100%

80% 71%
50% 47%
60% 49% 50%
40% 45%
40%
30%
20%
20% 0%

10%

0%
Business Individual
Opportunities for Property
Management Income
 Property management declines w/flipping
100%
8.0% 11% 10% 8.2%
90% 15%
80% 27% 22% 24% 27% 24%
70% ( by Buyers Agent)
60%
50%
40%
67% 69% 66% 65%
30% 61%
20%
10%
0%
2013 2014 2015 2016 2017
Owner Property manager Other

Q: Who will manage the property?

 Individuals more likely to retain you
Who Will Manage Property
70% 64.2%
60.5%
60%
52.6%
50%
40%
30% 24.4%
20% 14.1% 15.2%
13.3%11.9% 11.5%12.3% 10.9%
9.0%
10%
0%
Owner Buyers Agent Another Manager Other
Business Individual Total
 More likely to get deal in certain types
Who Will Manage the Property by Property Type
70%
60%
50%
40%
30%
20.0%
20% 14.1% 14.3%
10% 8.5%

0%
Owner Other Buyers Agent Another Manager
Single-Family Attached Multi-Family Land
 The management chicken/egg dilemma
Did You Get Management Deal Did You Get the Sale Because You
Because You Were Buyers Agent? Have Property Management
100% Expertise/Experience?
90% 19.0% 100%
80% 90%
70% 80%
60% 70%
60%
50%
50% 100%
40%
40%
30% 30%
20% 20% 43%
33%
10% 10%
0% 0%
Attached Land Multi-Family SFR Attached Multi-Family SFR Detached
Yes No Yes No
 Lease percentages less popular
Forms of Payment for Property Management
100%
90%
80%
70% 60.0% 55.6% 56.6% 56.6%
67.3%
60%
50%
0.0%
40%
16.4% 16.4%
30% 20.0%
13.5%
20% 44.4%
10% 20.0% 27.0% 27.0%
19.2%
0%
Attached Multi-Family Other SFR Detached SFR Detached
Monthly Fee % of Lease Other
 But good money either way!
Annual Property Management Percentage of Annual Income Owing
Income to Property Management Income
$18,000 $16,800
$16,000 Total 6.8
$14,000
$12,000 $11,133 Attached 3.8
$10,000 $8,812
$8,000 $6,853 Other 4.9
$6,000
$3,837
$4,000 Raw Land 7.5
$2,000
$2
$0 SFR Detached 7.9

Multi-Family 13.0

0.0 5.0 10.0 15.0

 Number of rent controlled units is up!
100%
90%
80%
70%
60%
94.0% 92.4%
50%
40%
30%
20%
10%
6.4% 7.6%
0%
2016 2017

Q: Is the property subject to rent control?

 Wrap-up: investors still out there
Investor market still active
More buyers in 2017
Real estate still one of the best bets
Business getting more involved
Some markets doing very well
SFR rentals going strong
Job centers still popular
Watch the cheaper areas!
Investors want returns, but
Also want safety and rents
Flippers back for quick buck too
Strategically
Still need to be online
Who you work with matters
Consider property management
Investors want and need analysis
CAR here to raise your game!
 www.car.org/marketdata/interactive

CARResearchGroup

CARResearchInfo

Housingmatters.car.org /JordanGLevine

@JordanGLevine
Thank You

This presentation can be found on

www.car.org/marketdata
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