Progress Residential in Vegas

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Progress Residential appears to be is a hedge fund buying SFR's in Vegas. We are seeing more and more rentals being listed by them. They apparently have 300 homes sitting vacant just waiting to be turned into rentals...they just can't turn them over fast enough as there aren't enough contractors/skilled trade. I mentioned this company in a post a few months back. Back in March Progress Residential purchased a few houses in North Las Vegas on a street I manage so I started following them. I was awe struck at the rent rates they were asking and getting...about $400-$500 over market.

I bring this up because any small investor might be competing with them during the offer phase. They typically offer cash and roughly 5% over list. I'm unsure if they play hard ball during due diligence but I would assume they do to lower their overall purchase price. If you check their facebook page renters aren't too thrilled with their services. I've heard stories of bait and switch where they list a home for rent w/ washer and dryer (and physically have both in the home during viewing) and then in the fine print of the lease they increase the monthly payment by $150.

It's like they are creating a private or public residential REIT using SFRs in Vegas. Is anyone seeing Progress Residential in other markets like Phoenix? I believe their involvement in our local real estate market is one factor rents have significantly increased the last few months.

Houses that were renting for $1,495 a year ago are now going for $1,895- $1,995 a month or more. Houses that were renting for $1,895/mo a year ago are renting for $2,500. It's simply bonkers.

It's a feeding frenzy for any detached SFR rental under $2k.

[Kurt Brauner]

I am extremely familiar with Progress on many levels. I have brokered deals as listing agent, represented them as a buyers agent (some years back) and also currently rent from them.

On the listing broker side they are obviously all cash deals with a quick close. But they will also work on the sellers timeline. They also have no issue with coming in above market value. In my experience they have. Ever asked for a repairs credit or any other concessions. 

Their model is simple, purchase property in desirable areas with minimal cap ex (newer properties), clean, paint, flooring and rent. 

In Q2 2021, hedge funds purchased over 2700+ properties on and off market. Most will become rentals. Progress, purchased approx 385 properties but it is hard to tell as the hedge fund buy under different LLC names. I regularly track these numbers and this has been about average for them Q over Q.

I also currently rent from them as I sold my primary residence with a 7 day close in March.  I under estimated the fact that I was going to be able to find a rental or replacement home that allowed pit bulls. They openly don’t have breed restrictions  and they allow you to buy out you lease with 1 month rent. The home is an average home In Centennial Hills that I would have rented for about $1750. I am paying $1895. When I submitted my application I sent one bank statement that had more then the years rent but no other paperwork to secure the lease, although I’m sure my credit more then was sufficient. From what I was told they will rent to anyone that can provide job/income verification and marginal credit.

As far as rental price increase this is a supply issue with eviction moratoriums and uncertain economic outlook most of my investors are fleeing this market. Cash out and move to steady growth markets with less appreciation swings with more certainty and better job outlook if we have another shutdown.

I see continued hedge/pension fund influx into our SFR market to hedge possible inflation. But time will tell….