Wednesday, March 7, 2012

Hedge Funds Buy Homes

The big boys are starting to play in the single family house residential market.

Not a good trend for individual investors.

They can borrow money cheaper than you can.

They can set neighborhood rents lower than your break even points and do it on purpose so you will sell your properties to them.

They can offer incentives on rentals you cannot match.

The single family house investor almost always was an individual investor, a mom-and-pop operator.  Not a private equity fund or publicly traded REIT.

The institutional investors are chasing yields and they will chase a good many individual investors out of this market for good.