'Conscientious People' Coming Out of a Crisis
Many of these single-family renters are like Jacobs' tenants, whom, he said, are "fairly conscientious people that just went through a foreclosure crisis" and want to retain some semblance of homeownership.
People like Michael Williams, who lives in Memphis, Tenn. When he couldn't find enough work, he was forced to sell his home in a short sale in 2011 for $110,000 -- nearly $40,000 less than he owed on his mortgage. Now he lives in a single-family rental, which costs him $1,025 a month. He said that he feels "blessed" to still be able to reside in a home of his own close to his old neighborhood.
"I'm partial to a home," he said. "I have my own privacy, and [I also] have grandkids."
Williams rents from REI Nation, an "REO-to-rental company" that purchases homes in Dallas, Memphis and Phoenix and flips them to "mom-and-pop" investors. REO is real estate parlance for bank-owned properties.
"They're looking for stability and still have pride of ownership," said Chris Clothier, a partner with REI Nation, of its tenants.