Multifamily veteran Fred Tuomi came out of retirement to lead a new, Dallas-based venture in single-family home rentals.
Dallas-based Invitation Homes has become the largest institutional owner of single-family rental houses in the country, including about 2,000 in North Texas. While it’s a niche that’s stayed mostly under the radar, renting out single-family homes became a lucrative new class of investment following the Great Recession.
Hundreds of thousands of houses had been foreclosed upon back then. So giant real estate investment firms saw a chance to snap up houses on the cheap, renovate them, and rent them out to those who wanted to live in single-family homes instead of apartments, but could no longer afford the mortgage.
Invitation, whose February 2017 IPO was the second-biggest of its type in U.S. history, raising a whopping $1.77 billion, knows it’s operating in a somewhat controversial environment. Critics have blasted corporate landlords for steep rent increases, high eviction rates, and fee gouging. But the Dallas company says it doesn’t operate like that.
“If one resident’s not happy, it’s too many,” Ernie Freedman, Invitation’s CFO, told writer Kerry Curry. “But the important thing is to attack the problem and be fair.” Read all about Invitation Homes and how it became the 800-pound gorilla in this niche in the April issue of D CEO, right here.