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I've been following the FHFA BULK REO program. Now, it seems one of the TBTF's, BoA has decided to let go of 500 foreclosures in 5 states. That doesn't sound like a large number but, it's the second offering in 5 months.
Finally, we get some names of the firms that are bidding on the Fannie & Freddie bulk REO deals. I imagine that these firms will take a look at the BoA offering. OakTree Capital Management Och-Ziff, hedge fund TCW Bond Fund Amherst Securities (1)
Take a good look at this list. I haven't looked at all of the SEC Filings for these firms. Och-Ziff Capital has roughly $29 billion under management. Amherst Securities is no slouch. Amherst has one of the better SFR analysts out there, Lorie Goodman.
You may ask why all this private capital, hedge funds, etc. are interested in bulk reo purchases. Simple, they are chasing Yield for their clients.
I haven't been privy to their market studies or their planning documents but, this has DISASTER & NEW BAIL OUTS written all over it. I mean just look at our Forum. Look at all the requests for advice from landlords.
Blackstone Partners VII, looks like the biggest fund raiser in Q1 of 2012. Blackstone has raised $6.6 million in just the 1st quarter of 2012.(2) Now, how can the small investor compete with Blackstone? Short answer, we can't.
Other notable private fund raisings in the first quarter came from:
UBS Realty Investors, $1.76 billion
Carlyle Group, $1.44 billion
Rockpoint Group, $1.32 billion
GEM Capital, $1.27 billion
McMorgan & Co., $977 million
TA Associates Realty, $833 million
Morgan Stanley Real Estate Advisor, $820 million (2)
Now, look at the above company names. Do you see any property management company names? No, just investment firms & hedge funds. How are they going to manage these properties? Collect rent? I think they have no clue.
Here's the deal in my opinion: Like "shooting craps", these firms are "Betting on the Come". ... "Bet on the Come" is derived from a gambling expression and means you don't have what you want or need, now at the moment; but, you are betting or hoping you will have what you want or need when the time comes. (3) I was in many a dice & poker game when I was in the Army. I was gambling with my own money and it wasn't much.
Why will we allow folks who have no expertise managing rentals control a large portion of the Housing Market is beyond me. But, with the powers that be should we be surprised?
(1) http://www.huffingtonpost.com/2012/04/12/bank-of-america-sell-off-hundred-foreclosed-homes_n_1422236.html?ref=business (2) http://www.costar.com/News/Article/Blackstone-Leads-Hefty-Increase-in-Private-Real-Estate-Fundraising-in-Q1/137707 (3) http://wiki.answers.com/Q/What_does_Betting_on_the_come_mean
Thief in the Night
Finally, we get some names of the firms that are bidding on the Fannie & Freddie bulk REO deals. I imagine that these firms will take a look at the BoA offering. OakTree Capital Management Och-Ziff, hedge fund TCW Bond Fund Amherst Securities (1)
Take a good look at this list. I haven't looked at all of the SEC Filings for these firms. Och-Ziff Capital has roughly $29 billion under management. Amherst Securities is no slouch. Amherst has one of the better SFR analysts out there, Lorie Goodman.
You may ask why all this private capital, hedge funds, etc. are interested in bulk reo purchases. Simple, they are chasing Yield for their clients.
I haven't been privy to their market studies or their planning documents but, this has DISASTER & NEW BAIL OUTS written all over it. I mean just look at our Forum. Look at all the requests for advice from landlords.
Blackstone Partners VII, looks like the biggest fund raiser in Q1 of 2012. Blackstone has raised $6.6 million in just the 1st quarter of 2012.(2) Now, how can the small investor compete with Blackstone? Short answer, we can't.
Other notable private fund raisings in the first quarter came from:
UBS Realty Investors, $1.76 billion
Carlyle Group, $1.44 billion
Rockpoint Group, $1.32 billion
GEM Capital, $1.27 billion
McMorgan & Co., $977 million
TA Associates Realty, $833 million
Morgan Stanley Real Estate Advisor, $820 million (2)
Now, look at the above company names. Do you see any property management company names? No, just investment firms & hedge funds. How are they going to manage these properties? Collect rent? I think they have no clue.
Here's the deal in my opinion: Like "shooting craps", these firms are "Betting on the Come". ... "Bet on the Come" is derived from a gambling expression and means you don't have what you want or need, now at the moment; but, you are betting or hoping you will have what you want or need when the time comes. (3) I was in many a dice & poker game when I was in the Army. I was gambling with my own money and it wasn't much.
Why will we allow folks who have no expertise managing rentals control a large portion of the Housing Market is beyond me. But, with the powers that be should we be surprised?
(1) http://www.huffingtonpost.com/2012/04/12/bank-of-america-sell-off-hundred-foreclosed-homes_n_1422236.html?ref=business (2) http://www.costar.com/News/Article/Blackstone-Leads-Hefty-Increase-in-Private-Real-Estate-Fundraising-in-Q1/137707 (3) http://wiki.answers.com/Q/What_does_Betting_on_the_come_mean
Thief in the Night
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