What barriers to entry exist in the Freddie Mac K-Deal market?

This is a difficult market to enter, with several material barriers to entry, many of which were created by Freddie Mac to make sure only the best buyers are active in the space. These barriers include:

Operational Expertise: Freddie Mac requires the buyer of these investments be an expert operator of multifamily investments.
Freddie Mac Borrower: To ensure the buyer is not only an operational expert, but is familiar with the inner workings of Freddie Mac, the most prolific buyers of the bonds are also active borrowers.
Investment Size: The equity required to buy the target tranche of the K-Deals is between $25 million – $65 million, which is a big check for most operational experts. The investment size, plus the requirement to be an operational expert eliminates more than 90% of the potential buyers of the bonds.
Controlled Entry: 80% – 85% of the secondary market is controlled by two investment banks, and 100% of the original issues are controlled by Freddie Mac. Both the investment banks and Freddie Mac conduct substantial due diligence to ensure the buyer of the bonds is highly qualified.