2016 CALIFORNIA INVESTOR SURVEY 1

Survey Methodology 364 online surveys conducted in February-March 2016 Respondents: REALTORS® who have worked with investors in past 12 months (February/March 2015 – February/March 2016) Sample error: 3% at a 95% confidence interval 2

REALTORS®’ GENERAL INVESTOR BUSINESS Investor Market Overview 3

Number of Transactions Declining Q: How many investor transactions did you close in the past 12 months? 4

Investor Business Declining Q: How many investor transactions did you close in the past 12 months? Q: How many total transactions did you close in the past 12 months? 5

LAST INVESTOR BUYER TRANSACTION 6

Buyers Dominate Investment Transactions Q: Who did you represent? 7

More Transactions Conducted in Southern CA Q: Where was the property located in your last investor transaction? 8

Single Family Purchases Decreasing Q: What type of property did your investor client purchase? 9

Majority Transactions Not Distressed Q: Was the property a(n)? 10

Investors Purchase More Units Per Property Q: How many units did the property have in your last investor transaction? 11

Initial Listing Price Growing Q: What was the initial listing price? 12

Final Sale Price Growing Q: What was the final sale price? 13

Listing & Sale Prices Nearly Equal 14

Days on Market Declined Q: How many days was the property on the market? 15

Nearly ½ Properties in Suburban Location Q: How would you describe the location of the property purchased? 16

Majority of Investors Rented Properties Q: What was the intended use of the property? 17

Transaction Cost Down Q: How much did it cost to purchase the property? 18

More than ¾ Investors Remodeled Properties Q: What type of rehabilitation/remodeling was done to the property? 19

Remodeling Cost Increased Q: How much did your client invest in rehabilitating/remodeling the property? 20

Investment Cost is 6.4% of Sale Price 21

Expected Rate of Return Increased Slightly Q: What is the expected rate of return on the property investment? 22

Top Reasons for Buying Q: What was the single most important reason that your last investor buyer chose to purchase that particular property? 23

Most Investors Own Other Properties Q: How many other investment properties does your client own? 24

17% Other Investments Located Outside CA Q: Where are those properties located? 25

Majority of Investors Purchased Other Properties Within the Past Year 26 Q: How many other properties did your last investor client purchase within the past 12 months?

Fewer Properties Found on MLS Q: How did you find the property for your client? 27

More Properties Found Directly from Seller Q: How did you find the property for your client? 28

Investors Take Less Time to Find Property Q: How many weeks did you spend looking for a property with your client? 29

Investors Viewed Slightly More Properties Q: How many properties did you view with your client prior to the client making a purchase? 30

More Investors are Making Offers on Other Properties Q: How many offers did your client make on other properties? 31

Sellers Received 4.2 Offers on Average Q: How many offers did the property purchased by your last investor client receive, including that of your buyer? 32

Future Price Predictions are Positive Q: Do you think real estate prices in the neighborhood where the property is located will go up, down or stay flat? 33

Intended Length of Ownership Rose Q: How many years does your client intend to keep the property? 34

2/3 Properties Managed by Owner Q: Who will manage the property? 35

Investors Plan to Charge 19% Higher Rent 36 Q: How much will your last investor client charge for monthly rent on the property?

Investors Plan to Increase Rent by Twice as Much as Last Year for the Next Tenant 37 Q: How much will your last investor client increase the monthly rent for the next tenant?

Investors Expect Properties to Appreciate Less 38 Q: How much does your last investor client expect the property to appreciate by the time he/she sells?

Most Investors Bought Properties Not Under Rent Control 39 Q: Is the property subject to rent control?

FINANCING 40

Fewer Investors Paying Cash Q: How did your client pay for the property? 41

Most Cash Funds from Personal Savings Q: What was the source of the cash funds in your last investor transaction? 42

Majority Financing from Bank Q: What was the source of the financing in your last investor transaction? 43

CLIENT – AGENT RELATIONSHIP 44

Many REALTORS® Getting Repeat Business Q: How did you establish a relationship with your last investor client? 45

59% of REALTORS® Market to Attract Investors Q: What kind of marketing do you do to attract investor clients? Please select all that apply. 46

Most Investors are Knowledgeable Q: How would you describe your last investor client’s real estate market knowledge? 47

57% of Investors Didn’t Analyze Return Potential Q: How did you and your client analyze the investment return potential of the property the client purchased? 48

Most Essential Info to Investors Q: What information was essential to your client in his/her decision to purchase that particular property? 49

INVESTOR DEMOGRAPHICS 50

Most Investors are Individuals Q: Was your client a(n)? 51

Nearly Half of Investors are Individuals Who Purchased Single Family Homes 52

More Minority Investors in 2016 Q: How would you describe your client’s ethnic background? 53

Annual Income/Revenue 67% Higher Q: What is your client’s annual income/revenue? 54

5.8% of Investors are Foreigners Q: What is your client’s country of permanent residence? 55