More Big-Money Investors Eye Single-Family Homes

More Big-Money Investors Eye Single-Family Homes  It’s not exactly like the old pre-crisis days when investors would swoop in on below-market homes, then renovate and flip for a profit.
Investors nowadays are deploying big money into distressed foreclosure properties or bargain single-family homes nationwide, even as prices are showing double-digit annual growth around some major cities.
The strategy this time around has shifted more toward the longer term, instead of near-term flips. Investors and landlords are growing a larger portfolio of long-term properties to then use management services from the likes of this property management Jacksonville Florida company or others to ensure their properties are well looked after as long-term investments.
Big money is intent on growing real estate portfolios as the housing market recovers and sufficient bargains remain, bank-owned or not.
Five Ten Capital, a Piedmont, California-based asset manager, last month signed a $100 million deal with Deutsche Bank to open a new fund to acquire, renovate and manage single-family rental homes.
In addition to Florida, Georgia, Illinois, Indiana, California, Arizona, and Nevada, where Five Ten currently operates, Five Ten expects to expand into Texas and Missouri with this additional funding. Some of these states, particularly Florida, California, Nevada and Arizona, have seen some of the highest foreclosure rates since the housing crisis.
“Financing firms like Five Ten help stabilize neighborhoods dealing with high foreclosure rates and depressed housing values, while providing significant local employment for renovation and management of rental properties,” said Five Ten’s CEO, Rob Bloemker.
Investors have helped rejuvenate communities. Investments groups accounted for more than half of home purchases in Las Vegas in March, according to DataQuick.
Private-equity giants and hedge funds have spent billions of dollars to buy these foreclosed single-family homes. In many cases, their intention is to upgrade the properties, rent them out and anticipate rising values as the housing market continues a steady recovery.
Investors have actually played a growing part in helping fuel home-price gains.
The potential downside could come as prices continue to surge. There are concerns that investors would dump their homes back onto the market, and put the brakes on the housing recovery. This does not seem to be the strategy — for now.
“Investors aren’t going to dump a lot of properties into a market and run the risk of losing money or
devaluating the rest of their portfolios,” investor Rick Sharga told CNBC. Sharga is part of Carrington Mortgage Holdings, a Connecticut-based group that invests in distressed homes and distressed mortgages.

2 thoughts on “More Big-Money Investors Eye Single-Family Homes

  • May 3, 2013 at 5:11 pm
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    “Financing firms like Five Ten help stabilize neighborhoods dealing with high foreclosure rates and depressed housing values, while providing significant local employment for renovation and management of rental properties,” said Five Ten’s CEO, Rob Bloemker.
    Bull crap. The long-term plan is to turn us into a nation of sharecroppers. Keep in mind, if you are a renter, your landlord can charge you whatever he considers to be “market rate” to occupy his property. If that same landlord just happens to own most of the other houses in that neighborhood…he also gets to determine “market rate”. The landlord also gets to add surcharges for upkeep and repairs he deems is beyond normal “wear and tear”, late charges on late rent that escalates daily, etc. Also, remember the fact that renters can be EVICTED usually at the landlord’s discretion. That means…if you complain to much…you’d be forced to move to the next “rent house” and start the institutionalized slavery process all over again with a new landlord. Shame on them.
    This is playing out so neatly that I can’t help but wonder if this wasn’t the plan all along. Destroy the “American Dream” so that you can create a permanent class of people that you can move and shove around anytime you want to. Now that’s crowd control for sure.

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