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It’s no secret that 2022 has been a tumultuous and unpredictable year for the SFR industry. As we enter Q4, the rare combination of continued interest rates hikes, falling unemployment, growing inflation, housing inventory shortages (especially in metro areas), and the first signs of month-over-month home price and rent depreciation have created a level of uncertainty in the housing market. Taken together, these factors have resulted in cooled SFR investment–at least for now.
This environment has also made it more important than ever for investors to control transaction costs. This means ensuring they are both predictable and competitively priced. In most cases, the solution calls for streamlining operations through internal process changes, in addition to forming new and stronger relationships with like-minded partners.
As SFR activity has slowed, many investors are leveraging their increased bandwidth to reassess and strengthen their internal processes and partnerships for acquiring properties at scale. By focusing on increasing efficiency, streamlining processes, and selecting the right partners (from deal sourcing to post-acquisition diligence), forward-thinking investors are taking advantage of the temporary lull in activity to better position themselves to be nimble and react quickly to any significant shifts in the housing market. While some investors will inevitably be caught flat-footed when the market eventually turns, those that have strengthened their operating model will be able to take advantage of a stabilizing housing landscape.
Among the most important components of a unified property acquisition operation is a well-integrated title and closing process. For most organizations, developing such a process means partnering with a title and closing agency that both understands the organization’s needs, and is equipped to address those needs through a combination of customer service and technological capability. This capability can include elements like APIs, automated reporting, customer portals, and consumer-facing dashboards.
In addition to providing excellent customer service and tech-focused advantages, the best title and closing partners take a consultative approach, acting as an advisor that can help SFR investors understand and improve their own internal processes. At Spruce, we take pride in our SFR-tailored offering, combining our proprietary technology with a specialized team of experts.
To find a title and closing partner that provides the right level of customer service and possesses the necessary technological capabilities, each investor needs to select a company based on its own needs and goals. For example, an investor operating in a single market with low transaction volume (let’s say 10 transactions or less per month) might find a local title and closing company with minimal technology suitable–a smaller number of localized transactions doesn’t require the speed and expertise of a centralized offering and seasoned team. On the other hand, an investor operating across multiple markets with high transaction volume typically requires a different type of title and closing partner: one with a nationwide offering that can integrate with the investor’s internal systems via API and provide a consistent experience across all geographies. In either case, it’s important for the investor to have a clear picture of what constitutes a successful relationship, and select a partner that can help to meet its goals.
Once the right title and closing partner is selected, forming and maintaining a strong relationship with that partner requires two things: (1) developing a workflow that meets the investor’s needs, and (2) continued improvement and iteration as market conditions and needs evolve.
For most organizations, kicking off a relationship properly can be difficult when transaction volumes are at their highest and the internal team is stretched thin. In contrast, when the internal team has bandwidth—as many currently do—they can work closely with their selected partner to build out the optimal workflow and API connectivity through both tight communication and technological integration.
At Spruce, we work closely with large and midsize SFR investors to build out integrations and workflows that increase operational efficiency and agility. To learn more about how you can work with Spruce to make the most out of this brief period of reduced activity, fill out the form below or reach out to us at sales@spruce.co.
Request a demo or, start a conversation.
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