Tags: big | investors | buying | houses

Big Investors Plowing Money into Single-Family Homes

Monday, 10 Dec 2012 09:17 AM

By Dan Weil

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Seeking to take advantage of the rebound in the housing market, some big-time investment firms are snapping up single-family homes.

The private equity titan Blackstone Group, for example, has shelled out more than $1 billion to buy 6,500 single-family homes so far this year, The Wall Street Journal reports.

Another private equity firm, the Colony Capital Group, led by Los Angeles billionaire Thomas Barrack, has acquired 4,000 homes.

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

Hedge funds and private equity firms have attracted up to $8 billion to invest in foreclosed single-family homes, Jade Rahmani, an analyst at Keefe Bruyette & Woods, tells The Journal.

The firms are buying the foreclosed homes through all channels, including auctions. The idea is to renovate the houses, rent them out and ultimately sell them.

Existing home sales rose 2.1 percent in October, according to the National Association of Realtors. And property values have risen at the highest rate in seven years over the last 12 months.

Many experts say it’s a good time for small investors to join the fun too

"We haven't seen home prices this low in so many years, coupled with the rates being so low," Jill Sjolin, an agent with Windermere Real Estate in Woodinville, Wash., tells Bankrate.com.

"When the money is cheap to borrow and the houses are cheap to buy, it's absolutely the best time to invest."

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

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