More than 1,300 single-family rental homes in the Atlanta area will soon have a new owner, as Altisource Residential (RESI) announced its intentions to purchase a massive portfolio of rental homes from Invitation Homes.
Altisource announced the deal as part of its second-quarter earnings presentation. According to the company, Altisource will purchase 1,325 single-family rental homes from Invitation Homes for $112.6 million.
If the deal is completed as expected later his month, Altisource will increase its portfolio of rented single-family rental homes from 777 at the end of June to an expected total of 2,282 – a nearly threefold increase.
According to Altisource, this purchase marks the company’s first bulk purchase of single-family rental homes.
“In the second quarter of 2015, we took crucial steps to diversify Residential's acquisition strategies to anticipate and respond to changing market conditions and grow our single-family rental portfolio,” Altisource Chief Executive Officer George Ellison said as part of the company’s second quarter earnings release.
“I believe these critical achievements position Residential to be one of the preeminent single-family rental players in the industry,” Ellison continued.
According to Altisource’s investor presentation, the average market value for the subject properties is $85,000 and 100% of the homes are located in Atlanta.
The average monthly rent for the properties is $848 and the average size of the properties is 1,575 square feet.
Altisource also detailed its plans for the properties once the deal is completed.
“We are also undertaking grassroot efforts to offer quality, affordable rental homes to working-class families while offering incentives and beneficial programs for our renters to improve their credit ratings and provide with them opportunities to improve their living situation,” Ellison said.
To that end, Altisource said that it plans to offer “family flexible leases.”
An example of a “family flexible lease” cited by Ellison in a call with investors is that Altisource plans to put 25% of the Atlanta homes into a rent-to-own program.
Additionally, families will be free to move within Altisource’s network of homes after 12 months of timely payments, Ellison said.
Ellison also said that all homes in the Atlanta portfolio will be “Internet friendly.”
Altisource will also arrange for Department of Housing and Urban Development-certified pre-purchase homebuyer counseling to all customers in its Atlanta homes.
“Altisource Residential aspires to be the best provider of quality, affordable housing for working-class families,” the company said in its earnings presentation. “Part of the success in this effort requires commitment and involvement in each neighborhood’s issues.”