October 30, 2020

Investor, Asset Manager, Securitization, Due Diligence

Meet the Faces of SFR

Leaders of Radian’s single family rental (SFR) operations team share their insights on changes impacting the SFR industry.

Greg Godderidge

 

Greg Godderidge

Vice President, SFR Operations

Greg joined Radian in 2011, holding roles across various departments including asset management, title, sales and SFR. As Vice President of SFR Operations, Greg is responsible for managing a team of 15 employees based in Salt Lake City that conduct due diligence for institutional SFR transactions.

 

How have you seen the SFR space evolve over your career?

Greg: The SFR asset class is relatively young—it has been around seven years. Our team has been involved in every SFR securitization transaction since the first one in 2013. Over that time, we have seen tremendous growth in the industry, as it has proven to be a stable asset class. In fact, there has been record growth in the SFR market this year both in the quantity and size of transactions. 

Another interesting trend that I have watched emerge in recent years is the growth of iBuyers. These are large online brokerages that have digitized the real estate transaction. Sellers can receive an offer on their home instantly from the iBuyer. Using technology and automation, iBuyers are shifting the way many people are buying and selling their homes.

 

What impacts has the pandemic had on SFR operations?

Greg: At the beginning of the pandemic, rental owners expected delinquencies in rental payments. However, in the single-family sector, rent collection performed at or above pre-pandemic levels. The nationwide stay at home orders created a unique circumstance that prompted many people to rethink their living situation. We began to see a shift of renters moving from urban multi-family units to suburban single-family homes as renters sought more room and access to outdoor space. 

The increased demand from renters and strong performance metrics has yielded more interest from borrowers and investors in the SFR market. In fact, the largest SFR securitization to date, totaling14,000 plus properties, came to market during the pandemic. Looking forward, I see this market steadily increasing with new lenders and new borrowers entering the marketplace on a weekly basis and iBuyers continuing to grow.

 

Holly Marsh

 

Holly Marsh

Client Service Manager

Holly has been in the real estate industry for nearly 20 years, with experience in title, foreclosures and real estate owned (REO). She was involved in the very first SFR transaction in 2013. As a Client Service Manager, Holly manages client relationships and contracts, facilitating work orders with the operations team.

 

Why is it important to focus on the customer experience?

Holly: Our customer focus is very intense because there is no room for error. Our business is unique in that our clients aren’t just one side of the transaction or the other—our clients are both the lender and the borrower. We are working with both parties and meeting all of their expectations, which are not always aligned. Meanwhile, sometimes we have several transactions going on at the same time. Communication is vital to make sure we are all on the same page—there is a lot at stake in these big deals.

 

Share a success story from one of your clients.

Holly: I mentioned there can be a lot at stake in these transactions. For example, one of our clients was approaching a tight deadline to refinance their portfolio, otherwise they would risk default. This was a do-or-die moment for our team to deliver. We would not have been able to successfully close that transaction without going the extra mile and working through the night. This is a somewhat dramatic example, but many of our clients can relate to it. They know we will always go out of our way to deliver for them.

Shawn Hall

 

Shawn Hall

Director, Component Services

Shawn began his career in the mortgage industry as a loan officer. He has over 20 years of experience working closely with borrowers, lenders, banks, underwriters, title, and real estate companies. He joined Radian in 2013 as a core member of a small due diligence team. Since then, his team has more than doubled as the SFR business has grown. As Director of Component Services, Shawn manages a team that reviews documents to verify property information required for funding.

 

What is the importance of component services in the SFR transaction?

Shawn: We work with the largest lenders in the nation. They rely on us as a third party to review and verify information from all parties involved in the transaction. Depending on the scope of the review, there can be over 100 data points per property—a standard review includes the purchase contract, deed review, title review, and lease. Ultimately, we provide a check and balance that is necessary for the lender to approve credit.

 

 

What are the key challenges your clients are experiencing right now?

Shawn: It has become more competitive in the real estate market. Back in 2013, the business model was built on acquiring large numbers of available foreclosures. Now, there is a shortage of housing inventory. We are seeing some clients turn to build-to-rent to create their own housing supply.

 

 

Kristen Bauer

 

Kristen Bauer

SFR Manager

Kristen has over 17 years of experience in the real estate industry. She started her career working for a family-owned construction company building single-family homes. She joined Radian’s SFR team from its beginning. Now, seven years later, she manages a team that has seen the market grow exponentially. As SFR Manager, Kristen’s primary focus is reporting results, delivering the final product and certification.

 

What trends have you observed lately in SFR due diligence?

Kristen: We have received increasing diligence and valuation requests for rental home communities where our clients are creating built-to-rent homes. It’s an exciting opportunity for us to customize our products to fulfill new client requests in this space. In addition, we have also seen an increase in diligence for securitizations this year, one of which was a historically large transaction for the industry. 

 

How do you customize your process for different clients?

Kristen: Since our client’s needs are always changing, our group is dedicated to adapting and creating processes to ensure we have the tools to remain the number one diligence provider in our industry. Whether that means incorporating a new document into our review or customizing our reporting output, we keep an open communication with our clients to determine the services that best fit the scope of their project. In addition, we are excited to incorporate the new MyRadian technology platform, which will help us further enhance and streamline our client interactions allowing them to access their results with only a few clicks.

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