Who’s the Big Money Betting on Foreclosure Homes?

In yesterday’s blog “Foreclosure Home Flipping is Back” I shared how the small investor is making big money in today’s housing market, by buying pre-foreclosures that are not listed for sale, at wholesale prices, and quickly selling them to cash-rich investors, putting instant profits in their bank. Wondering who all these cash rich investors are? Check this out… there are a TON of cash waiting to buy these deals…

Big money betting big on housing

By Maureen Farrell @CNNMoneyInvest

Investors are betting big on the housing recovery.

Hedge funds and private equity firms have been rushing in to buy up companies and assets in every part of the housing supply chain, including undeveloped land, home-builders, foreclosed homes, and building parts manufacturers.

One of the most notable moves is coming from hedge fund manager John Paulson, best known for his big (and lucrative) bets against subprime mortgages in 2006 and 2007.

Now, he’s turned his attention to snapping up undeveloped land in areas hardest hit by the housing crisis. “Land is the accordion in the home building equation,” said Michael Barr, who runs Paulson’s real estate investments. “It falls the most in a downturn, but also rises the most in an upturn.”

Over the past two years, Paulson & Co has bought up enough land in California, Arizona and Nevada to build up to 25,000 homes and is aggressively scouting for more, according to Barr.

Private equity firms are also getting in on the game.

Blackstone Group (BX) spent $2.7 billion last year to buy 17,000 single family homes, post-foreclosure, around the United States and plans to continue ramping up those efforts in 2013.

Pine River Capital Management took real estate investment trust Silver Bay Realty Trust (SBY) public in December. Silver Bay, which acquires, renovates, leases and manages single family homes, has already purchased more than 2,500 homes in areas hard hit by the housing crisis. In a recent SEC filing, Silver Bay said that it plans to purchase 3,100 more homes.

And in a sign of investors’ growing appetite for a piece of the housing market, shares of publicly traded homebuilders have been soaring. PulteGroup (PHM), KB Home (KBH), and Lennar (LEN) are all trading near 52-week highs. Pulte’s shares have more than doubled over the past year, while the KB Home and Lennar’s shares have nearly doubled.

Others are lining up.

A lot of investors see a short window of opportunity where there’s good inventory on the market at bottom market prices. No one knows how long it will last, so these investors are trying to buy as much as they can right now. (Full Story here.)

Wondering How to Flip Deals to Cash-Rich Investors?

It all begins with your deal. You need to have something that your cash investors want – a great deal on a home, well below market – tied up and ready to deliver to them. For your fastest paydays, you would flip your deal to your cash investor “as is” and let your investor fix it up to their standards and rent it out for long term growth. You get paid when your investor buys the deal from you… and when you do buy it “right” you should expect to make $30,000 or more per flip in less than 30 days… without having to lift a hammer.

If this is something you want to do, Join me TONIGHT for my Live New Investor Training Webinar “How to Buy Wholesale Foreclosures And Make Fast Profits Now“. Make sure you Register NOW and then Login to Join me at 5:50pm Pacific, 8:50pm Eastern. I go live at 6pm Pacific, 9pm Eastern… Talk to you Tonight!

This Post Has 3 Comments

  1. Diane

    Amazing! Its in fact awesome post, I have got much
    clear idea regarding from this post.

    Review my web blog; Www.flickr.com/people/upcomingtradera/

  2. Gertrude

    Spot on with this write-up, I truly believe that this amazing
    site needs a lot more attention. I’ll probably be back
    again to see more, thanks for the info!

    Here is my web blog – Mastodon.social/@upcomingtradera

  3. Taren

    Its such as you read my mind! You appear to understand so much approximately
    this, like you wrote the book in it or something.
    I think that you can do with some p.c. to drive the
    message house a bit, however other than that, this is fantastic blog.
    A fantastic read. I will definitely be back.

Leave a Reply