Big Money Gets Into Landlord Game

Reading the article excerpted below, I wonder how small investors with
say $100K to invest can find real estate partnerships that invest in
single-family homes. I'm suire I can surf the web and find someone
willing to take my money, but how do I find a reputable firm? My wife
browses MLS and thinks many houses are inexpensive, but we don't have
the time or maintentance skills (I remind her) to be landlords.
One can invest in REITS, of course, but I think residential REITS
usually invest in apartment buildings, not single-family homes.
Big Money Gets Into Landlord Game
By ROBBIE WHELAN
Wall Street Journal
August 4, 2011
...
Buying foreclosed homes as investment properties has long been
dominated by mom-and-pop investors. But now hedge funds, private-
equity firms, pension funds and university endowments are dipping into
that market. The attraction is double-digit returns at a time when
most bonds and other income investments yield very little.
The most popular strategy is for a big investor to team up with a
local company that scouts out houses and finds the renters. The hope
is to flip the homes in the future when prices recover.
"It's kind of the Wall Street meets Main Street phenomenon," says John
Burns, an Irvine, Calif.-based real-estate consultant who has
discussed investing in single-family rentals with hedge funds. "The
Main Street guys need the capital, and Wall Street needs the
expertise."
At the end of May, 3.5 million loans were at least 90 days delinquent
or in foreclosure, according to investment bank Barclays Capital. At
the same time, the country's home ownership rate has fallen, to 65.9%
in the second quarter of 2011 from its peak of 69.2% in 2004,
according to figures released by the U.S. Census Bureau last month.
That drop has produced millions of new renters and helped push the
vacancy rate for rental housing down by about two percentage points,
to 9.2%.
...
Reply to
Beliavsky
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has a list of REITs. Detached housing is more expensive than apartments because of the lack of common walls and larger lot size for the detached housing.
Many of the REITs are local to one area, making it necessary to diversify REIT investments by area to minimize risk.
-- Ron
Reply to
Ron Peterson

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