Family offices could be hit in Trump ban on investors buying homes

A version of this article originally appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to high-net-worth investors and consumers. become a member to receive future editions straight to your inbox.

Private investment firms staffed by ultra-wealthy families may be inadvertently targeted by President Donald Trump’s proposed ban on “big institutional investors” buying more single-family homes. While Trump’s announcement targeted Wall Street landlords and private equity giants like Blackstone in particular, Haynes Boone partner Vicki Odette told Inside Wealth that family offices aren’t necessarily out of control.

According to a survey published by , three-quarters of family offices in North America invest in real estate, allocating an average of 18%. Campden Asset and RBC Asset Management last year. According to the same report, residential properties accounted for just under a third of the average family office’s real estate assets.

The implications of Trump’s proposal depend on how he defines the large institutional investor, which has not yet been disclosed. In recent years, Congress and government agencies have focused on the number of homes owned rather than the investor’s total assets or investment strategy, according to Odette.

A 2024 report on institutional investors from the Government Accountability Office focused on those who owned more than 1,000 properties with four or fewer units. The threshold is even lower in the Stop Predatory Investment Act, which went into effect in March and names “disqualified single-family property owners,” defined as taxpayers who directly or indirectly own 50 or more single-family residential rental properties.

“There are a lot of wealthy families who would mistakenly fall into this category because they are real estate developers and make their money in real estate,” said Odette, a Haynes Boone partner who advises family offices, funds and institutional investors.

Family offices often prefer multifamily housing and commercial developments, he said. However, he said there are some family offices, especially in the South, with meaningful portfolios of single-family homes in suburban or rural areas.

Michael Cole, managing partner of R360, an investment community for centillionaires, said it was too early to tell whether the ban would affect family offices. He said there are issues that cloud the fact that family offices are structured in a wide variety of ways.

“There is no legal entity called a family office. It’s not a corporation, it’s not an LLC, it’s not an FLP,” he said, referring to family limited partnerships. “These are organizations governed by the single-family office concept, but a single-family office is not a legal structure.”

Withers’ real estate partner, Arielle Frost, said family offices likely won’t be immediately affected because the primary target is Wall Street landlords. What’s unclear, he said, is whether politicians and lawmakers will continue to target other types of investors.

“The first strike is probably the most important because you need to get the support and the momentum behind it,” he said. “The question then becomes, ‘Okay, we’ve made our base happy and now we’re moving on to other things,’ or is this really something the administration cares about and will continue to focus on?”