The Jeff-Bezos-backed real estate investment platform Arrived Homes has just launched its largest tranche yet of new homes to invest in. It placed seven new homes available on the website today, and will place seven more in the next week.
The platform allows individual investors to inspect new homes it has purchased on its website, and then invest in them, with investments ranging from $100-$10,000 per property.
Arrived Homes was a huge hit with investors last year, when Jeff Bezos invested in it, first in the $37 million seed round in June through Bezos Expeditions, and then again during the company’s $25 million Series A round.
The company has enjoyed incredibly fast growth due mostly to it being one of only a handful of real estate investment platforms available to non-accredited investors. During the last eight months of 2021 the company funded 51 homes on its platform, for a total of roughly $18.5 million in value. 2022 has been moving even faster, with about $30 million in rental properties already funded.
The total value of the latest batch of homes is roughly $7 million. The properties were targeted to several high-growth markets, among them Atlanta, Nashville, upstate South Carolina, and Northwest Arkansas.
The platform purchases carefully chosen rental homes, and then allows investors to browse listings of them and purchase fractional ownership through its platform, with a minimum investment of $100. The company then will handle property management while investors get a share of the rental income as the property appreciates.
After a target hold period of five to seven years, the home is sold and the investors will split the equity according to the shares they own. If the property appreciates, they collect the profits.
The model appeals to investors today due to the average rent in the US having increased 16.4% in the last 12 months, and rents in some areas like Miami increasing as much as 32% over the same period.
And as interest rates increase, and mortgages become more expensive, in an already highly priced real estate market, more and more potential homeowners are being priced out of home ownership and into the rental market.
Even as all of that puts upward pressure on rents due to increasing numbers of renters, the proliferation of real estate investment models like this will put further upward pressures on the prices of homes, pricing even more potential home buyers right into the rental market.
