Non-accredited investors have previously been locked out of investing in single-family rentals. But that’s not the case any longer thanks to Dallas-based Common Dwelling.
Drawing on his career in architecture and real estate, founder Ty Lee launched an online investment portal targeting single-family rentals throughout Texas. His unique business model renovates, manages, and leases the properties—and design is kept in-house with construction partners to keep costs lower.
“We’ve always been frustrated that good investment options are limited for the general public,” Lee says. “We’ve created a platform in which individuals with as little as $100 can participate in attractive returns associated with single-family rentals.”
In a recent conversation with D CEO, Lee reveals his motivations behind founding the company, why single-family rentals are such a hot investment right now, and his new-found love for martial arts.
D CEO: You started your career in architecture and then transitioned to the development and investment sides of the real estate. What is it about the investment side of the business that appeals to you?
TY LEE: “What’s interesting about architecture is that you have to be creative in order to be in that field. And as I was exposed to the investment side of real estate development, what I learned is that you actually have to be creative on multiple fronts simultaneously. You have to be creative in how you obtain your equity. You have to be creative in how you structure your partnerships. You have to be creative in how you underwrite your debt. And then you also have to be creative in the design, execution, marketing, and leasing, in order for a development to be successful. So, for me, it was like creativity on steroids, and I was able to really exercise that part of my brain on multiple front.”
D CEO: Let’s talk single-family rental investment: I was just reading how DR Horton, one of the largest home builders in the country, is putting $1B into the single-family rental market. What makes single-family rentals an attractive investment right now?
LEE: “I think it has a lot to do with demographics and demand. When you read about the generational population groups in our country, millennials being the largest and Gen Z being the third largest. What’s interesting when you look at the data, what the market is feeling right now in terms of a shortage of supply is actually the older millennials creating it. If you look at the millennial age group, it spans about 10 years. So, as a developer, when you’re looking at an asset class that will be in high demand for the foreseeable future, this asset class should have runway for at least a decade if not longer, especially with Gen Z on the tail.
And then you add into it the fact that after the great financial crisis, a lot of the builders stopped building the same amount of intensity because of them getting burned during that time, it all adds up to a pretty attractive asset class.”
D CEO: Your new company Common Dwelling quite literally breaks down the barriers for investment. Non-accredited investors can invest with as little as $100, in essence democratizing high-yield investment opportunities that would in many other cases require a lot more capital. Until your idea, the only real estate investment options open to non-accredited investors have been real estate investment trusts (REITs), retirement plans, or equities. Why is this democratization of investment important to you?
LEE: “I didn’t come from a wealthy family growing up. And I want to sort of help solve that problem for people that have similar backgrounds. You know, just because you don’t have millions or billions to invest shouldn’t limit your options.”
D CEO: You’ve worked for CBRE and a number of other larger real estate firms. What made you want to start your own real estate investment firm and have a go at it yourself?
LEE: “I always have this desire to constantly improve things, innovate, and try things. At the end of the day, when you’re an employee of someone else, if you disagree—unless you own the company—you can’t really ensure that the change occurs. And so, for me, that was a big thing: if I felt strongly about something, I just didn’t want somebody telling me I couldn’t try it.”
D CEO: Your goal is to raise $20 million. What’s the timeline? I know you’ve had some recent success with Common Ground Capital and a $7 million capital raise in the past six months.
LEE: “So far, so good. The interest has been really strong. We’ve already gotten a number of investors. And I am starting to really promote it more now that the holidays are over. I didn’t want to, you know, call on people while they’re trying to have turkey dinner or open presents. But now that it is the new year and we’re back in the saddle, we’re going to push it more and promote.”
D CEO: Finally, at D CEO, we tell the story of the DFW business community through the people who lead companies here. We enjoy letting people in on the personal side of business. Can you tell me a fun fact about yourself that not very many people know?
LEE: “I recently took my first Muay Thai private lesson in hopes to learn self-defense—and maybe sweat a little in the interim. You know, it was really fun. I think I’ll probably do it again. And I heard that it’s the best self-defense for beginners, so I said, ‘Okay, well, that’s me.’”
Author
