K4 Family Investments
Zareen Zapata
FIP is Iowa's Temporary Assistance to Needy Families (TANF) program and provides cash assistance to needy families as they become self-supporting so that children may be cared for in their own homes or in the homes of relatives.
The only way you can get FIP for more than 60 months is if you can prove that you have a reason why you cannot support your family. This is called a hardship exemption." Examples of hardship are: Physical or mental health problems; Substance abuse problems; or Domestic violence.
The Refugee Cash Assistance program provides cash assistance for up to twelve months to needy families, including single adults, who enter the United States as refugees who are not eligible for the Family Investment Program. Unless determined exempt, refugees must cooperate with work and training requirements of the RCA programs.
Any local HHS office can answer questions about the programs and services described here. Contact the local HHS office serving the county where you live (County HHS Office Locations). The local HHS office serving your county is also listed in the State or County Government section of your local phone book, under "Department of Health and Human Services" or just "Human Services". You may also contact the HHS Division of Community Access by calling 1-800- 972-2017.
Rights: You have the right to ask for an appeal if you disagree with a decision Iowa HHS makes. You have the right to ask for an exception to policy for an item or service not otherwise covered by Iowa HHS.
We calculate your annual fee based on family income, type of income, tax complexity and net worth. You pay the first half of your annual fee when you hire us and the second half approximately halfway through the first year of your engagement.
An open retainer agreement means you are free to call us or schedule a meeting at any time on any financial issue and there will be no additional charge for the extra meeting(s). The logic behind this arrangement is simple: each year you have to put your pen down on your checkbook and rehire us. If we have not provided value during the previous year, you can choose not to rehire us. And we really appreciate getting rehired!
We may refer you to outside vendors and/or product specialists to help you with the implementation of your planning needs. We accept no referral fees or compensation of any kind from these people and/or companies. Our referral is only based on our belief that they will be of assistance to you.
When we manage money for you directly, an asset management fee applies. This annual fee equates to 1% of assets under management, or less in some cases, depending on the size of the relationship and specific services provided. These fees are deducted on a quarterly basis and are calculated based on the market value of the portfolio at the end of the preceding quarter.
MIM strives to generate an optimal portfolio to address the needs of a variety of our institutional clients. We are committed to building strong relationships by understanding client objectives and goals.
The past year capped off another decade of significant change in how institutional investors view the residential investment sector, and also signaled what is likely to come. Specifically, the single-family rental sector is following the same path toward institutional acceptance that apartments navigated in the 1990s and 2000s, and we believe this is being driven by two factors. First, demographic and secular shifts point toward a medium and long-term increase in demand for larger format rentals, such as single-family homes1 . Second, and perhaps more importantly, advances in information management platforms have made smaller investments accessible to investors with billion or trillion-dollar portfolios.
We believe the institutionalization of single-family rentals (SFR) which began in the early 2010s may near full maturity as an asset class by 2030. This could cause several things to occur. The most noticeable effect in the short term may be a compression in SFR yields as the market moves from small private investors who expect double digit levered returns, to institutional investors who may be comfortable with a higher single digit levered returns, due to both economies of scale and a lower average cost of capital. Yield compression could, in turn, put downward pressure on the homeownership rate as renting becomes more affordable relative to owning an equivalent quality home. This increase in the ratio of renters could translate into a larger investible universe for rental housing.
In the medium to long term, we believe the most significant effect of the institutionalization of SFR will be a rise in popularity of master planned rental communities, as opposed to traditional construction of more disparate homes or neighborhoods built for owner-occupiers. To understand where the SFR investment sector is headed, we believe it is important to first understand the history and current state of the more established rental apartment sector.
Before the 1990s, institutional investing in the apartment sector was challenging due to a lack of transparency, the need for large staffs, and a lack of reliable and regionally scaled property managers. At the time, reporting standards from NCREIF, as well as early publicly listed REITs, gave investors only a basic level of transparency. As investment track records lengthened and national property management firms were formed and consolidated, more capital was allocated to the apartment sector. This resulted in lower required yields by investors, and the risk premium ascribed by investors relative to the earlier-to-institutionalize office sector also evolved. Between 1985 and 1995, apartment yields traded 50 bps above office assets. Over the subsequent decade apartment yields traded on average 70 bps below office yields.2
Following the subprime mortgage crisis of 2008, a small number of institutions believed depressed home prices created an opportunity in the SFR sector. Institutional investors, however, had few direct paths to owning equity in single-family homes. Much like apartment investing in the 1980s and earlier, investing in single-family homes as rentals was challenging. However, improvements in software and the ability to scale property management companies have made the SFR space easier to access in a relatively short amount of time.
In terms of transparency, the public REIT sector now offers investors around a decade of performance history for SFR. In addition, a growing number of specialized data vendors have been collecting and reporting on information that allows investors to understand market conditions and more consistently underwrite opportunities. Lastly, in 2021, the NCREIF Research Committee created a Single Family Rental Task Force that has been tasked with evaluating how to categorize and benchmark the sector4.
Based on our view of the volatility of historical returns, and our outlook for demand and supply growth that we will discuss next, we believe single family rental yields should be slightly below apartment yields. In practice, however, we estimate that single asset single family rentals are trading at a 5.5% cap rate, and portfolios are trading at a 4.5% cap rate. Built-for-rent communities, which represent a very small share of the single family renal investible universe and are thinly traded, may be trading with return expectations that are on par, or slightly below, where apartment assets are trading.5
Examples of temporary / cyclical COVID-related conditions include factors that limited housing supply last year, such as seniors remaining in their homes rather than moving into group facilities, thus reducing the supply of existing single-family houses for sale. Supply was also limited through September 2021 by eviction and foreclosure moratoriums. We expect these conditions to abate in 2022 and 2023, which should modestly ease inflationary pressures in residential real estate markets.
Additionally, low interest rates have kept monthly mortgage payments relatively low for would-be home buyers, driving down for-sale home inventory and driving up prices. This had a secondary effect on rents, and could help support fundamentals even as some of the temporary COVID-related factors mentioned above reverse.
Taken together, we believe home price appreciation, apartment rent growth, and single-family housing rent growth will remain elevated, but could moderate somewhat as the cyclical conditions mentioned above begin to dissipate next year.
In our view, population growth is one of the most straightforward metrics to forecast. We know how many people were born every year, how long they will likely live on average, and precisely how long it will take them to reach every age bracket.
Households entering child rearing years, office workers needing more space to occasionally work-from-home, and aging Baby Boomers, are the three categories that will exert the strongest demand pressure on the residential investment market over the next decade, in our view. We believe these groups will demand a similar form of housing, namely 2-3 bedroom units in the 1,000-2,000 square foot range. But why rentals, and why not for-sale housing?
Aging Millennials and Baby Boomers are both facing their own versions of financial challenges. Millennials continue to contend with elevated student debt burdens and lack of savings. The median student loan debt among home buyers aged 31-40 is $33,000, and nearly 70% of homebuyers say debt is delaying homeownership. At the same time, we estimate the average down payment requirement has nearly doubled between 2010 and 2020.8 This suggests Millennials may continue to rent for longer than prior generations.
On the other end of the population range, Baby Boomers (who will account for a large share of net household formation in the 2020s) are contending with concerns over social security, changes to (and challenges with) pension systems, and lower savings rates, while medical and other household expenses have risen.9 Uncertainty about their standard of living in retirement has partially driven a rise in rentership among the older generation, who may use home equity to unlock retirement funds.