Dallas-Fort Worth Real Estate Investor Club

Just when you thought it was safe to go back in the water -

  • 06 Oct 2012 5:20 PM
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    Message # 1096436
    Deleted user

    Taken from Preston Ely's blog:

     

    The End of “Mom & Pop” Real Estate Investing?

    I’ve noticed a scary trend that’s picking up major steam lately …

    From The Wall Street Journal, October 3rd: “Private-Equity Giant Blackstone’s $1 Billion Bet on Foreclosed Family Homes” …

    real estate mogulreal estate mogulreal estate mogul

    From The Tampa Bay Times, September 22nd: Wall Street behemoth plans to spend $1 billion on Tampa Bay’s hobbled housing market …

    real estate mogulreal estate mogul

    Also from The Wall Street Journal: “Big Funds Get Into the Landlord Game”

    real estate mogul

    From U.S. News & World Report: “High-Profile Institutional Investors Commit Money to Buying Foreclosed Homes”

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    And from HousingWire:

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    What do you think about this trend of big funds crowding out smaller “mom & pop” investors? Has this hit your town yet?

    Last modified: 12 Oct 2012 5:46 AM | Deleted user
  • 07 Oct 2012 1:50 AM
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    Reply # 1096710 on 1096436
    Deleted user

    Yeah we are going to have to somehow come together and buy bulk if we want to survive. I mean because it's a no brainier if a "Mom and Pop" investor connects with a bank and only wants 1 or 2 properties and these big organizations are buying 300 then the gate keepers are going to start holding the best properties for the big boys and not give us the time of day.

    Last modified: 07 Oct 2012 1:53 AM | Deleted user
  • 07 Oct 2012 1:54 AM
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    Reply # 1096714 on 1096436
    Deleted user

    Good info by the way Barry Thanks!
  • 07 Oct 2012 9:45 AM
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    Reply # 1096920 on 1096436
    Deleted user
    Actually, this trend (which has been going on for a LONG TIME) should not effect small "Mom & Pop" investors very much - provided you position your business properly. 

    The Hedge Funds are purchasing bulk REOs from bank administrators. In order to get the deals, the hedge funds have to agree to take 1/3 of the inventory they buy as "above average," 1/4 to 1/3 as "average," and the rest as "below average." 

    Having spent the last 18 months putting together a large buying syndicate I can assure you, you most likely would never touch the "below average" properties. They are usually in VERY poor condition and are in neighborhoods that only warrant Owner Fi or Rental dispositions. Usually, with the expectation of a lower down-payment and eviction / foreclosure in the not-to-distant future.

    The way for small investors doing low transaction volume to thrive right now is to go where the big guys aren't - to the dinner tables of individual motivated sellers. the homes are usually in much better shape and are typically in neighborhoods that allow multiple exit strategies.

    However, if you want to join a large group of investors who are positioning themselves to compete with the hedge funds, please drop me a line and we can discuss it. On the other hand, if you want to learn to purchase investment properties effectively, and directly from the homeowner, I suggest you consider taking Robin & Cindy Carriger's "Success in Wholesaling Class" next Saturday (I believe there are still a few seats left) and my "Success in Real Estate Investing" workshop November 3rd & 4th (there are still 4 seats left). These workshops are VERY inexpensive, have been specially designed to solve this kind of problem, and each have a 100% satisfaction guarantees. 

    Best regards,

    -Greg

    Greg Wilson
    The REI Mentor
  • 08 Oct 2012 1:14 AM
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    Reply # 1097559 on 1096436
    Robin Carriger (Administrator)
    As is the case about 95% of the time, Greg and I agree on this one.  I'll also say that I take all the news reports posted above as really good news.  It says some really big-time, institutional investors think residential real estate is finally at the bottom and is about to make a comeback.  One of the ideas I've shared with our Platinum Members over the last several months is to not only stay informed about the real estate market and the various forces that affect real estate values but track what the elite, ultra-wealthy investors are doing, and, with appropriate scale, try to intelligently align your plans with theirs.  If the big boys are diving in to single-family rentals (like Warren Buffet recommended) in a major way, I'm even more motivated to continue do to likewise.
  • 09 Oct 2012 8:24 AM
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    Reply # 1099002 on 1096436
    Tim Cook

    Just a quick note to say I agree with both Greg and Robin.  Staying on top of the market news and trends is a great way to keep ahead of the wave and changes coming, adjusting your business model and keeping your business solid and strong.

    Great job to all.

    Tim 
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