Tuesday
September 2, 2014

Blackstone Becomes Lender to Smaller Investors

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Blackstone Becomes Lender to Smaller Investors

Blackstone Group, a giant investor in the single-family rental home market, is introducing a new lending platform to offer cash to smaller investors who also want to jump into the rental market. 

Blackstone Group has invested nearly $7 billion in rental properties through its Invitation Homes unit in recent years, and it sees an opportunity in now helping smaller investors break into the single-family rental market, too. 

"The market for financing for small and medium-sized borrowers in the single-family rental space is underserved — they don't have access to good capital now," John Beacham, president of Blackstone's B2R, a buy-to-rent lending platform, told CNBC.

Blackstone is originating loans of $500,000 to $50 million to small and mid-size investors who want to purchase a minimum of five single-family rental properties. Each home they purchase must be valued at $50,000 or more, and borrowers must have a 25 percent to 30 percent stake in each of the homes. 

"We underwrite our loans on a very conservative basis ... like a commercial real estate loan," Beacham says. "We confirm the lease and the rent on the lease. We think that by underwriting this like a multifamily building, on pools of houses with more sophisticated borrowers, we have a pretty conservative loan product."

Source: “Looking to play the rental market? Blackstone wants you,” CNBC (Dec. 16, 2013)

Read more:

Blackstone Offers New Type of Rental Bond
Some Home Owners Say Rentals Are Ruining Neighborhoods
Single-Family Rentals Still on the Rise