CoreLogic has announced the launch of a new property data and analytics offering that provides enhanced insight to investors participating in the new government-sponsored enterprise (GSE)/Federal Housing Finance Agency (FHFA) REO-to-Rental program and other similar private programs. The new offering provides potential investors with property-level information such as:
►Average potential rent for the subject properties, based on relevant market information, including nearby multiple listing service (MLS) single family residence (SFR) rental data
►Capitalization rate information by geographic area
►Current value of the property through CoreLogic automated valuation models (AVMs)
►Assessment of neighborhood and market trends
►24-month review of housing price trends
►Cash-flow projections on similar properties
The analysis is delivered within 24 hours of bid tape receipt. CoreLogic will report average rental pricing based on completed rental agreements sourced directly from local MLSs, where available. This will provide more accurate and timely data than listings typically "scraped" from Internet sites. After a successful acquisition of REO property, CoreLogic can provide renter screening and occupant rental insurance data to help successful bidders manage properties more securely.
"Over the last five years, there have been more than three million additional potential renters from completed foreclosures, which is more than the net increase in the number of renters during the 1990's and the early part of the 2000's before the housing bust. And many of them seek single-family housing with similar characteristics to the home they owned," said Mark Fleming, chief economist at CoreLogic. "However, until recently, attracting institutional investors into the single-family home rental market has been difficult because of the regional nature of the markets, the difficulty in bundling the properties and the lack of actionable information concerning cash flow and pricing."
Fannie Mae, Freddie Mac and the FHFA recently announced that they will be bringing part of their inventory of 250,000 REO properties to market on a buy-to-rent basis. Initially, the program will focus on areas particularly hard hit by the housing market collapse, with Fannie Mae auctioning 2,490 properties in Georgia, Illinois, Florida, Nevada, California and Phoenix through a complex bidding process. Large private mortgage investors are pursuing similar strategies, including foreclosure rental programs that could allow delinquent homeowners to stay in their homes as renters.
"The GSEs are in the process of prequalifying investors for their programs and a number of investors have announced new funds to capitalize on this opportunity," said Ben Graboske, senior vice president of Real Estate and Financial Services for CoreLogic. "Our new program will give investors the data and insight they'll need to model their cash-flow projections, to bid with confidence and then to set attractive market-appropriate rents. The better the data, the better the chances that programs will be successful and more inventory can be brought to market in this fashion."