As demand for fractional real estate investing grows, Jeff Bezos-backed Arrived Homes, which specializes in single family rentals, is ramping up acquisitions.
The firm, which acquired $5 million in rental properties in the entire first quarter, has acquired $11 million in new properties in just the last 30 days. As the firm has seen total investors double in the last two months, it has had trouble finding enough properties to meet the demand for its service.
When 12 new properties launched on the platform, new investors flooded the site so quickly it crashed for nearly three hours. And a new batch of properties was added later in the month, it only took eight minutes before they were fully funded.
In the last 30 days, Arrived Homes has spent about $23 million on 59 properties across 17 markets.
Because the company is available to non-accredited investors, it has seen tremendously fast growth. During the final eight months of 2021 it spent $18.5 million on 51 homes. In the first six months of 2022, it has already bought $30 million in rental properties.
The companies prospects looked so promising that Jeff Bezos invested in the company’s $37 million seed round, and made a second investment in the company’s $25 million Series A round.
The way the company works is it purchases single family rental homes and then allows investors to view the homes on their website. If the investor wants, they can invest in the home by purchasing a share of it, with a minimum investment of $100.
The company handles property management, and the investors receive their share of the rental income, as well as wait for the property’s value to appreciate over time.
After five to seven years, the property will be sold, and the equity and profits from the sale are divided up among the shareholders.
Investors have been showing increasing interest in single family homes as home prices have skyrocketed, and rents rose an average of 16.4% in the last 12 months, and as much as 32% in cities like Miami over 12 months.
Now with higher interest rates entering the mix, home ownership is even more unaffordable, forcing even more people to rent, and further increasing the cost of rentals.
