When Twila True and her husband, Alan, founded True Investments in 2012, they benefited from a second-mover advantage in the single family rental space. The larger, public players were the first movers, focusing on a home appreciation model in their play for more expensive homes.
“We’ve taken advantage of the second-mover opportunity,” True said. “The trail has been blazed and to be the second guy in and look over the fence and see what really worked and what inefficiencies there [were] and prepare for those inefficiencies” was a definite advantage.
True Investments takes a different approach, buying purely on a rental yield performance model, helping to revitalize neighborhoods and provide institutional quality rental housing to its tenants.
“We’re buying for a rental yield, not looking at what we can sell for,” she said. “As most people look at the nation, there’s a modest home price appreciation you can count on, but that’s not our model.”
Over the past year, True has deployed additional family capital in acquiring SFR homes, adding 416 homes to True Investments’ portfolio, which now totals just over 1,000 homes. With homes priced in the $70,000 range, located primarily in the Midwest, True Investments isn’t competing with big players such as Blackstone.
“Nobody’s in our box,” she said. “They’re looking at $200,000 [homes] and we’re looking at value homes. Our only competition are mom and pops, so we’re usually the biggest dog in the room. We’re the Blackstone in the room and have broker attention.”
True brings a unique perspective to real estate and to serving renters in the affordable sector. Prior to True Investments, she and her husband ran True Innovations, a multinational consumer products licensing and manufacturing business based in Asia that employed more than 4,000 employees. True Innovations designed and manufactured office and home seating to big-box retailers in the United States, Canada and Mexico. In 2011, True Innovations was acquired by Li & Fung, a publicly traded company in Hong Kong.
During that time, True lived in Asia for 15 years and assembled an impressive private portfolio of real estate in multiple asset classes in Asia and North America. When the hot Hong Kong summers arrived, she would return to the U.S. and noticed a changing landscape.
“The American dream was a pool and barbecue and owning a home,” she said. “Then with the real estate crash … we right-sized ourselves. There is no bad stigma if you don’t own a home.”
True said controlling finances and not getting over your head is honorable and has led to a renter nation.
In 2012, the Trues were interested in adding more properties to their U.S. real estate portfolio and decided the highest opportunity for yield was the SFR class. Working with their own family private capital – they call it “patient capital” – they created structures, operations and analytics to identify where and what to buy.
“It made us a little more disciplined and longer to come out with our model,” she said.
As a member of the Oglala Sioux Tribe from Pine Ridge, South Dakota, True grew up in one of the poorest regions of the country. Her family, a father who held a stable job and a mom who stayed home, is her renter demographic.
She’s also a dedicated philanthropist, co-founding True Children’s Home in 2006 with the mission to save orphaned children’s lives, fund corrective surgery, provide post-surgical care, place children with foster families and facilitate adoption. True Children’s Home merged with Love Without Boundaries in 2011. She’s also the founder of True Sioux Hope Foundation.
“We’ve been very fortunate, and many of our ventures have been very successful,” she said. “If you can, it’s nice to be able to help anyone who’s less fortunate. We’re in a position of being able to do that.”