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Some bulk investment homebuyers starting to sell


NEW YORK – July 2, 2014 – A year ago, investment firms were buying foreclosed homes at a rapid clip to rent them out. However, with the supply of bargain-priced distressed residences declining, some of the earliest investors are looking to cash out by flipping the properties to competitors.

Waypoint Real Estate Group, for example, is reportedly shopping as many as 2,000 houses in California that it acquired in the past several years with private investment funds. The homes, most of which are rented, are being shown to other companies backed by investor money that have also scooped up distressed houses in such states as Arizona, Florida and Illinois.

Some of the largest institutional investors in the market for foreclosed residences – chiefly the Blackstone Group, American Homes 4 Rent and American Residential Properties – have slowed their pace of acquisitions in response to two factors: climbing home prices and a shortage of foreclosed properties that do not require extensive renovation.

Waypoint is following the lead of other early investors such as Oaktree Capital Management and the Och-Ziff Capital Management Group. However, unlike those two firms, Waypoint is not actually exiting the single-family home market. It is still managing more than 7,000 properties for a publicly traded REIT it established in 2013 with the Starwood Capital Group, dubbed Starwood Waypoint Residential Trust.

Source: New York Times (06/28/14) Goldstein, Matthew

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Related Topics: Real estate investing