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Real-time Estimate Quote. Real-time Estimate Cboe BZX - 07/29 02:54:27 pm
378.325 USD   +1.09%
11:18aVOLKSWAGEN VORZÜGE : Goldman Sachs reaffirms its Buy rating
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SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Goldman Sachs Backs Single-Family Rental Fund for Small Investors

06/01/2021 | 06:14am EDT

By Konrad Putzier

A startup that wants to open up the single-family home rental market to small investors is ramping up its home purchases, after winning the backing of Goldman Sachs Group Inc.

Real-estate firm Fundrise manages a fund that enables customers to invest as little as $500 in homes going up in fast-growing cities such as Charlotte, N.C., Tampa, Fla., and San Antonio. With the dearth of homes for sale throughout the U.S. pushing up housing prices, single-family rentals have become an increasingly popular alternative to buying in desirable neighborhoods.

Goldman Sachs last week provided a $300 million credit facility to Fundrise, the startup said. The deal comes as more financial firms court individual investors. Apps such as Robinhood have turned thousands of younger and less wealthy people into busy stock traders, leading to hopes that some of them could be drawn to real estate, too.

Washington, D.C.-based Fundrise manages a so-called interval fund, in which individual investors can invest small sums without going through a broker, though they can only pull out their money at set intervals.

The fund has raised around $200 million since its January launch, and has bought or signed contracts to buy around 2,500 homes, said Fundrise Chief Executive Ben Miller.

Mr. Miller said he hopes single-family rental homes will appeal to small-time investors who find stocks too expensive or volatile, or to those who want a hedge against inflation.

The single-family-rental industry has been booming as institutional investors and big public companies such as Invitation Homes Inc. and American Homes 4 Rent look to profit from rising demand for suburban houses. The growing popularity of remote work has led many families to seek out larger homes, while millennials choose to buy homes and have children later in life and rent in the meantime.

Most single-family rental homes are owned by small landlords who often live nearby. Companies like Fundrise and California-based Roofstock hope to make it easier to invest in these properties from afar. The sector has also attracted more foreign institutions.

Rather than buy existing houses, Fundrise invests in newly built homes, either by buying them upon completion or by partnering with home builders.

The company plans to use the credit facility to finance these purchases for a period, before refinancing the debt, for example with mortgage-backed bonds. Aside from single-family homes, the fund also invests in other types of real estate like apartments and warehouses, Mr. Miller said.

Fundrise, founded in 2012 by Mr. Miller and his brother Dan, pioneered commercial real estate crowdfunding, a practice that lets small-time investors buy stakes in properties over the internet. But crowdfunding has struggled to gain a foothold in the real-estate market, and in recent years Fundrise shifted to managing vehicles that more closely resemble traditional investment funds.

Write to Konrad Putzier at konrad.putzier@wsj.com

(END) Dow Jones Newswires

06-01-21 0814ET

Stocks mentioned in the article
ChangeLast1st jan.
AMERICAN HOMES 4 RENT 0.78% 42.115 Delayed Quote.39.30%
DJ INDUSTRIAL 0.53% 35110.65 Delayed Quote.14.55%
INVITATION HOMES INC. 0.56% 40.76 Delayed Quote.36.50%
THE GOLDMAN SACHS GROUP, INC. 1.01% 377.91 Delayed Quote.41.91%
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Financials (USD)
Sales 2021 55 113 M - -
Net income 2021 18 654 M - -
Net Debt 2021 312 B - -
P/E ratio 2021 7,09x
Yield 2021 1,77%
Capitalization 133 B 133 B -
EV / Sales 2021 8,07x
EV / Sales 2022 10,2x
Nbr of Employees 40 800
Free-Float 37,3%
Duration : Period :
The Goldman Sachs Group, Inc. Technical Analysis Chart | GS | US38141G1040 | MarketScreener
Technical analysis trends THE GOLDMAN SACHS GROUP, INC.
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 28
Last Close Price 374,23 $
Average target price 411,80 $
Spread / Average Target 10,0%
EPS Revisions
Managers and Directors
David Michael Solomon Chairman & Chief Executive Officer
John Edward Waldron President & Chief Operating Officer
Stephen M. Scherr Chief Financial Officer & Executive Vice President
Marco Argenti Co-Chief Information Officer
George C. Lee Co-Chief Information Officer
Sector and Competitors