The rebound from a housing disaster has transformed a lot of companies. Beazer Homes might have transformed the most as it has gotten creative and may have found a way to increase revenue while the housing market continues to find a bottom. Investors can put money into a slew of real estate: office properties, apartments, retail stores, etc. Beazer has joined forces with KKR to add single family homes to the investment list. Warren Buffett said he would buy hundreds of thousands of these homes at today's low prices. Now the common investor can throw some money into single family homes through an REIT.
There are 25.5 million single family rental properties in the US compared with 18 million rental apartments. This new single family home REIT will capitalize on a largely untapped investment locale for the common investor. Beazer already has 192 single family homes in the Phoenix and Las Vegas areas. More than 10% of these properties are homes that Beazer originally built and sold. KKR is hoping that Beazer’s expertise can help turn houses around to a rental market. Most homes are being purchased at a discount because of foreclosures or short sales, which isn’t surprising given that Phoenix and Las Vegas are still in terrible condition.
Currently, the REIT is private. Once the assets increase and reach a specified amount, Beazer and KKR will consider making it a publicly traded REIT. Essentially, it will be made up of ‘certified pre owned houses.’ It has worked in the automobile industry the past few years. Why not housing?
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