Houston Chronicle by R.A. Schuetz May 2, 2019
Sydnee Eldridge’s phone pings every time a house in her price range in the MacGregor neighborhood of the Third Ward hits the market.
The alerts, for three-bedroom homes priced from $250,000 to $350,000, come from Houston Association of Realtors, Zillow and Redfin. Yet no matter how quickly she acts, other buyers were beating her to an offer.
“We found several houses where we saw them the weekend they were listed,†Eldridge said. “We put an offer in the same day. And there was already an offer in on it.†Sometimes in cash.
“It gets down to a point where you can’t really compete.â€
What Eldridge didn’t know was that she was competing against a pool of investors that includes some of the largest hedge funds in the world, many of whom are armed with cutting-edge technology created by Entera, a Houston company, that’s designed to identify deals faster than she ever could.
Competition for homes in this price range ratcheted up in the wake of the subprime mortgage crisis a decade ago. As the bottom of the housing market fell out, institutional investors saw another opportunity: cash flow from rental properties. Hedge funds began snapping up single-family homes and turning them into rentals in huge numbers, reducing the pool of housing available to entry-level buyers.
The ability of institutional buyers to roll up these properties has been enabled, in part, by Entera, co-founded by Martin Kay. Amid the housing crisis Kay, who had proved his data mining and analytic service chops in the energy and infrastructure sectors, turned his attention to real estate, using data to automate the process of identifying homes that would be profitable to turn into rentals.
From that was born Entera, which provides the same service to institutional investors, allowing them to find homes before they even hit the market and place offers on them in minutes.
If a regular homebuyer has a hard time competing, well, that’s kind of the point. “We hope we’re very hard to compete against,†said co-founder Robert Salmons.
More:
https://www.houstonchronicle.com/business/article/Houston-s-entry-level-housing-snatched-up-by-13811625.php
