From the WSJ: Investors pounce on distressed houses.
The pace of housing sales has been rising in many markets this year, but it is only partly because families seeking affordable housing are returning to the market.
It also is because of investors like former Deutsche Bank managing director Matthew Cooleen, whose firm has spent $30 million buying pools of foreclosed houses from banks.
His newly formed Greenwich, Conn.-based firm, HudsonCross Financial, is betting it can make a profit reselling in beaten-down markets in states like Nevada, Arizona and Florida and in Southern California because it is paying so little for the homes.
Outside San Francisco, a former Morgan Stanley executive director’s new firm is buying four houses for 75% less than they cost four years ago, and is raising $6 million to purchase others.
I can already hear Walt asking, “so what are Futter & Fontanski doing about all this?” The answer, Walt, is contained in the warning set forth below – a number of investors already knew this and are calling us. Your house is on the potential list, I’m sorry to say.
Buying houses, rather than apartment buildings or other commercial property, tends to favor small investors who are agile and understand local submarkets. …. Much of today’s buying is being done by mom-and-pop investors, who are acquiring a few houses to rent out.
But in some markets, where prices have fallen the most, the bargains are difficult to pass up for larger investors.