Institutional Investors Are Not Competing With Homebuyers
Posted by Hank Miller on
Institutional investors are not the enemy of traditional homebuyers. They do not compete for inventory; traditional homebuyers cannot buy what real estate investors buy. 89.6% of single-family rentals are held by “mom-and-pop” landlords who own between 1 and 5 rental properties. The media continues to do an outstanding job of misrepresenting what a “real estate investor” is, conflating “institutional investors” with the “mom and pop” investor. It makes for fantastic click bait given the public’s 10 second attention span. The MSM should examine the “rules” traditional homebuyers are subject to as well as what those in the lower price tier are up against. It will then be obvious; there is no competition. In fact, institutional investors were net SELLERS…
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Home sellers can be a prickly group. This is especially true when markets are shifting, like now as sellers lose the edge and the market balances (mid-summer ’25). The trendy label is "accidental landlord", but an accidental landlord is nothing more than a stubborn seller. They don't listen, they know best. Their home is the “exception”; they have the one that all the buyers will flock to. Data? Meh, that’s for the others, not them. They know what the house is worth, just ask them. They are "experts".
permits lined up and trying to hold onto the wallet. Rookie investors make rookie mistakes; overpaying, underestimating repairs, poor project management, overestimating finished market value and a thousand other things. But even experienced flippers get surprised from time to time.