Ownify's real estate investor guide

Most savvy investors have a 10-30% real estate allocation in their portfolio, and ultra-wealthy investors often significantly more. The reason for that is that historically, real estate investments have benefitted from tax advantaged treatment, strong cash flows, low volatility, and consistent appreciation. 

For most investors, investing in real estate involves contributing capital to professionally managed projects - ie passive investing rather than becoming an active landlord or developer. Passive real estate investment lets investors benefit from real estate returns without dealing directly with property management or daily operations. Investing in a portfolio of single family homes provides multiple compelling advantages.

Benefits of Investing in Single Family Real Estate

• Cash Flow: Consistent rental income.
• Stability: Single family properties typically perform steadily even during economic downturns.
• Inflation hedge: Rising rents, increasing property value, and smart use of fixed rate debt can provide a hedge against inflation.
• Appreciation: A limited supply of single family homes continues to drive significant value appreciation.
• Tax Efficiency: Opportunities to leverage depreciation as a tax-saving strategy.
• Diversification: Reduces risk by complementing traditional investments like stocks and bonds.

Ownify offers a unique passive real estate investment strategy through the Ownify Home Fund. For the last three years, we've been proving out an investment thesis that goes beyond the traditional drivers of investment return in residential real estate.

How does Ownify increase investor return?

Compared to traditional investments in single family homes or REITs, Ownify's structure provides several ways of driving investor alpha, or incremental return to industry average. Here are the key tenets of our investment thesis:

• Excess consumer demand: for the foreseeable future, the US has a structural shortage of housing units, in particular affordable single family homes. Consumer research and surveys consistently point out the struggle that young families face in making the leap to homeownership. We see this trend in the number of applications we see daily as well as the sigh of relief we hear when we help someone move into their first home. As investors, the consumer demand we see allows us to be discerning in our underwriting, approving consumers with good credit and responsible budgets and selecting only the best properties to invest in.
• Leveraging cutting edge technology: our management combines a unique background of real estate investment, finance, and software engineering and we invested significant R&D into building our underwriting and valuation platform. Ownify leverages over 3,000 pieces of data to make an investment decision into a single combination of a customer and a single family home. Of course, we're continually evaluating and putting to use new AI and data tools to improve our decisions.
• Selecting the right assets: we're investing in single family starter homes - ie largely homes in the $300-500k price range. Historically, starter homes have seen annual home price appreciation of 5-6% vs nationwide average of 3-4%, driven by a number of factors. Read our deep dive into "why we're bullish on investing in starter homes". Beyond our focus on starter homes as a sub-asset class, we rigorously evaluate the appreciation and income potential of each individual home through our underwriting process.
• Getting the best price: as every savvy real estate investor knows, the basis (entry price) for any investment stays with you throughout the live of the investment. So we spend significant effort and diligence up front to ensure the right valuation when we make an initial offer, the right negotiation strategy, and a firm commitment to walking away from deals that don't make sense - for our investors or our Ownis. We've structured a unique compensation structure for our agent partners to help us get the best price - our "2 plus 10" commission plan.
• Structural alignment: one of the most exciting results of our unique fractional ownership structure is that it aligns the incentives of the Owni as the resident and co-owner of each home with the incentives of our investors. Ownis treat their homes like owners do, not like tenants do. That shift to an ownership mentality ultimately results in lower maintenance and repair costs and better appreciation.
• Investing in growing markets: as the old adage goes - location matters. There are over 300 distinct real estate markets in the US and we've built a data-driven thesis on each of them. We've validated our theses for the top markets we're focused on through in-depth research and in-person relationships with local Realtors, investors, and buyers. Currently, we're investing in the Research Triangle in NC, Charlotte, NC, Nashville, TN, and Dallas / Ft Worth, TX. We're continually evaluating markets and will add other markets based on the underlying fundamental economic drivers of job creation, migration, and housing supply / demand.
• A fair balance: core to our mission is to provide a fair deal to both our investors and to our Ownis. We spent significant time and effort making sure that our product structure balances investor returns with real savings for our customers. So in everything we do, we make sure that both sides get a fair deal. That means strong returns for our investors combined with savings for our customers. And yes, we can achieve both! See our investor returns calculator here and our consumer benefits calculator here.

While we're still early in our journey, our investment thesis is proving itself out. Our trailing twelve months investor return are 14%, well on our way to our target returns of 16%. If you're interested in investing in the Ownify Home Fund or working with us as an RIA or Advisor, you can learn more in our investor portal or please reach out directly to investments@ownify.com. Sign up below to join our investor newsletter as well!