OfflineInstitutional investors are firing up the housing recovery and many are still very active in multiple markets around the country. They are taking advantage of the continuing flow of bargain properties and the growing demand for rental homes. Some of these large investors are buying huge blocks of homes to sell to other investors looking to get into the rental market.
However, it’s not all just the big players. Despite big players like Blackstone, they only represent a very small segment of the single-family home market. In 2012, 81 percent of the single-family homes purchased were bought by individuals, and 19 percent were bought by investors. Most investors are small, individuals buying one or a few homes in their local market.
Some of the major investors scooping up bargains include:
• Colony American Homes - amassing a portfolio of more than 10,000 homes.
• Blackstone Group - recently secured a $2.1 billion loan from Deutsche Bank AG for its REO-to-rental investment program.
• Ameribid - stages auctions of bulk REO homes and just sold around 125 homes in one auction, with 47 percent selling to investors.
Of course, shrinking inventories and continued investor buying pressure are contributing to price increases. At some point the flow of foreclosures will lessen and we should see a drop in this bulk buying by large investment concerns. However, until then there is plenty of opportunity for the individual investor as well.
When large investors step into the real estate market to buy up all the bargain properties, it can create a challenge to first time home buyers who are generally inexperienced and cash short. If an individual want to compete, they need to know what they are looking for and be ready to act immediately. This means that bank pre-approval is absolutely critical.