Sunday, November 18, 2012

Investors are winning

"Every first Tuesday of the month, a crowd clusters outside the Collin County courthouse in McKinney for the foreclosure auction. Some bring coolers; others bring a tent.

Serious buyers have pockets bulging with hundreds of thousands, even millions, of dollars in cashier’s checks, ready to pay fully and immediately as required. Similar scenes play out simultaneously throughout the state.

Increasingly in Collin County and elsewhere, local investors are being outbid by out-of-state investment companies. In Collin, a major player is American Homes 4 Rent, a company affiliated with a Malibu, Calif., financial management company. The company’s strategy of converting foreclosed homes to rental properties is ratcheting up and quietly having an impact on neighborhoods — for good or ill.

Like American Homes 4 Rent, other investment companies with budgets ranging from modest to bottomless see residential rentals as a solid market in which to plunk down millions or billions of dollars, confident the investment will flourish — in rents and eventually in sales.

“What triggered this was this realization that the prices of properties are so low now that in many areas, investors could make a profit off buying property at a low price and then renting them out,” said Daren Blomquist, Vice President of RealtyTrac, which tracks foreclosures."

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