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Big Money Chases Foreclosure Home Market

By: Alexis McGee | Written: March 13, 2013

There’s a lot of talk about the “big money” coming into town and buying up the MLS foreclosure inventory, Bank Owned homes, and at the trustee sale (sheriff sale) auctions. They have raised a lot of money to invest in what they see as a very undervalued market – bidding close to market value, fixing and holding for long term cash flow and appreciation.

This is just the beginning. Flip investors, do not stress out. I have a plan for you… so make sure you read this post fully and then join me Tonight in my Strategy Session to learn more.

Foreclosure Home For Rent

Will Wall Street Buy Into Single-Family Rental Craze?

So Far, Institutional Ownership of Single-Family Rentals Appears to Have Legs, Analysts Say

Private-equity funds, pension funds and other institutional investors have been playing in the single-family rental investment market since the middle of last year, but the space is likely to get quite a bit more crowded in coming months as public REITs join the party.

Along with dozens of other private firms and pension funds, two of the biggest private equity investors in the world, Blackstone Group LP and Colony Capital LLC, formed private REITs and stepped up their acquisitions of vacant homes to be converted to rentals last year, initially targeting the large pool of distressed housing in markets where prices have fallen furthest.

According to current estimates, between $6 billion and $10 billion have either been invested or are expected to be invested in the single-family rental sector, according to Fitch Ratings. Markets like Phoenix and Atlanta have actually seen home prices rebound due to investor hunger for these properties, fueled by demand from families either displaced by foreclosure, or would-be buyers that don’t meet down payment or other mortgage requirements.

“What is significant, however, is the trend towards institutional ownership of [single-family] homes, and this does not seem to be a fleeting trend. Single-family rentals can be found in virtually every community today and more and more families are choosing single-family rentals, either as a temporary stop on the road to becoming homeowners or as a permanent solution to their housing needs,” said Chris Clothier, director of sales and marketing and partner of Premier Property Management. Read the full story from CoStar here.

Flip Investors, Do Not Stress Out!

If you are a “flip investor” the higher prices they are paying are locking you out of those deals. Frustrating, yes, but I have a plan to help you capitalize on this incredible trend…

  • First of all, you don’t want to compete with these buyers – so that means stay away from the MLS, Bank Owned or Auction inventory – that is where the big boys are buying.
  • Second of all, if these investors are looking for deals, and paying close to retail, why don’t you just flip your deals directly to these institutional buyers?

I’ve got the first part already handled – by working pre-foreclosures that are NOT on the market, I have the inside lead to deals that my competition is missing (both equity sales and short sales).  Plus, by doing my research, I know which lenders are discounting their short sales in my market – so I can make a targeted effort in my local market for those deals. The next step is to call owners direct and make those deals. I will be sharing these details and more in my Strategy Session Webinar TONIGHT.

The second part I am working on now. I have a lead to one of the big private equity groups’ buyers’ representative. I can’t wait to get more details on deal submissions from him. Talk about instant money for deals!  Make sure you join my Strategy Session Webinar “Get Your Wholesale Offers Accepted in a Competitive Market” TONIGHT at 6pm PDT (9pm EST) to stay in the loop!

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