Sale-leasebacks increasingly target struggling homeowners

Companies like EasyKnock and Invitation Homes look to tap that investment option

Wall Street ramps up funding to lease homes to struggling homeowners (Getty, Unsplash)
Wall Street ramps up funding to lease homes to struggling homeowners (Getty, Unsplash)

 

Sale-leaseback deals are becoming an increasingly popular investment option as homeowners struggle to pay their mortgages, with many facing the prospect of having to sell.

Some companies are investing in that corner of the single-family home rental business, tapping into a property’s value while keeping a steady rent flow by not forcing out the seller, according to Business Insider.

One such company, EasyKnock, is going all in.

The firm is now armed with a $500 million credit line that it will use to buy homes then rent them back to sellers, EasyKnock CEO Jarred Kessler told Business Insider. That boosts the company’s buying power significantly. Its portfolio now includes $200 million worth of homes.

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Richard Hill, an analyst at Morgan Stanley, said that some large single-family rental companies could also use sale-leaseback deals as a way to market to older homeowners who need to tap into their equity for retirement or healthcare spending.

Invitation Homes, the largest single-family home landlord, previously said that it will seek to add sale-leaseback deals to its pipeline of acquisitions.

[BI] — Keith Larsen