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» VISIT US ONLINE @ DSNEWS.COM 23 THE PROS AND CONS OF A "FIXER-UPPER" Many homebuyers and investors purchasing a fixer-upper may face unexpected challenges and complications. A study from Porch.com takes a look at the tradeoffs between buying a fixer-upper versus buying a move-in-ready "turnkey" home. When renovating, those who purchased a fixer-upper home and went over budget on repairs spent 38% more than planned on average. Much of these extra costs went toward things such as a new HVAC and plumbing. For those who chose turnkey homes over fixer-uppers, a majority of buyers (63%) stated that they chose their home simply because they liked the house or neighborhood. On the other end, most fixer-upper buyers indicated that they made their purchase decision based on finances, stating they believed they could get a better price on a fixer-upper than a turnkey house. Despite the expectation of spending less, fixer-uppers ended up costing homeowners about the same or more on average as move- in ready homes. According to Porch.com, 44% of buyers ended up spending more than expected on repairs, going over budget by 38% on average. e rooms most likely to go over budget were basements and bathrooms. e move toward existing and fixer- upper homes is also being reflected in the rental market. According to the National Association of Homebuilders (NAHB) and the Census Bureau, the number of single- family dwellings built-for-rent declined at the start of 2019. ough built-for-rent single-family rentals have been on the decline, the overall single- family rental market has been on the rise. e demand for single-family rental (SFR) securitizations continued to grow month-over- month. It increased to 4.7% in March from 4.2%, according to the latest Morningstar Credit Ratings report on the SFR market. e report indicated that the average vacancy rate had declined overall to 4% in March—the lowest since May 2018. e average retention rate for expiring leases also dropped to 78.9% in February, the latest month available, from 80.4% in January. BRITAIN'S BARCLAYS RE-ENTERS RMBS MARKET A decade after bonds tied to U.S. home loans contributed to the financial crisis, British investment bank and financial services company Barclays is returning to the residential mortgage- backed securities (RMBS) market, Reuters reported. Many banks retreated from selling and trading portions of loans tied to residential property, auto, or commercial real estate following the crisis. However, Reuters reported that Barclays, after assembling a team of more than 140 securitization bankers and traders, is preparing to re-enter the sector as investors are looking for higher returns on deals compared to traditional stocks and bonds. "is was a 500 million pound ($632.80 million) business for Barclays in terms of revenues last year, when global peers are making 1 billion pounds a year, so for us to get to 500 million pounds additional revenue over three years or 100-150 million pounds a year should be achievable at a measured pace," said Stephen Dainton, Barclays' Head of Global Markets. Barclays' return is led by Scott Eichel, a securitized assets trader who experienced the troubles of the mortgage-backed securities market leading up to the 2008 crash. According to Reuters, Eichel has assembled a team of 144 bankers and traders who package and sell everything from commercial and residential home loans to more esoteric assets, such as media and sports franchise rights. "e market has changed both outside and inside banks, both from a regulatory perspective and best practices inside firms," Eichel said. e report states that Barclays' comeback into the market does hold its risks, given that the bank paid $2 billion last year to settle a U.S. probe into its selling of mortgage-backed bonds that allegedly helped trigger the crash. In a statement at the time, Barclays CEO Jes Staley called the terms of the settlement "fair and proportionate." Barclays ranks sixth for sales of U.S. securitizations this year, which is up two places from last year. e bank is hopeful that signs of softening U.S. regulations underpinning the securitization industry could help consolidate and expand its market share, the report stated. A U.S. Treasury report in October 2017, prompted by an executive order from President Donald Trump, supported the stance that post- crisis regulation was too strict. "e result has been to dampen the attractiveness of securitization, potentially cutting off or raising the cost of credit to thousands of corporate and retail consumers," the report said. was the percentage of available homes purchased by investors in the U.S. in 2018. Source: CoreLogic, "Investor Homebuying Activity Reaches Historic Heights" STAT INSIGHT 11%

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