Hedge Funds

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Hedge Funds

Bob Pohl
Bay Area, CA · Member since 2013 · 21 posts · 2 votes

Hi everyone,

I wanted to see what peoples thoughts were regarding the hedge funds. Buying all they can as well as if and when they decide in a few years to unload the mass properties they are buying, what effect it will have on the market.

Best,

Bob

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  • Scott W.
    Real Estate Investor · chicago, IL · Member since 2012 · 1k+ posts · 231 votes
    13y

    they can only buy so much even with all their $. my personal opinion is only 10% of the market is affected by them. they also overpay so no way I'm going with that.

    they will sell when the market comes back so it won't have a terrible affect on real estate.

    the key is not to compete with their current purchase prices. it's insane.

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  • Wes Love
    Investor · Atlanta, GA · Member since 2012 · 64 posts · 3 votes
    13y

    Hey Bob,
    Hedge funds here in Atlanta have been a topic of conversation for a while now. Here in Atlanta they have easily bid up all homes under 100k and as an agent I see them regularly offering over list. I can see how they can have a strong effect on homes under 200k as well as stabilizing rent amounts in areas because of such size and purchasing power. Several of the funds here in Atlanta also make money on the renovations and will make money when they resell later when the market rebounds. I dont forsee them just flooding the market at least not voluntarily. As an economics graduate simple supply and demand tells us they should slowly liquidate just as banks have been doing with some of the foreclosures since the 'crash'. One thing I dont like is FNMA selling them bulk tapes at discount if they promise to rent them out for several years before reselling.

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  • Marco Santarelli
    Specialist · Orange County, CA · Member since 2008 · 2k+ posts · 623 votes
    13y

    Hi Bob Pohl,

    This is certainly a concern. What you're referring to could be argued as a "pump and dump" scheme by wall street. Buying up large volumes of property, riding the price cycle upwards, then selling near the top (potentially creating that top) is a pump-and-dump, and that will leave many investors holding the bag after prices the market softens.

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  • Anson YoungBusiness Member
    Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
    13y

    I was just talking with another BP member about this last night on the phone. Its nice to have the opportunity to wholesale properties to them, but then what? That will go away eventually, and 5 years from now they likely plan on selling, so hang on for the ride I guess!!

    Podcast Guest on Show #235
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  • Thomas Williamson
    Investor · atlanta , GA · Member since 2012 · 287 posts · 148 votes
    13y

    Thanks for the info Anson. I agree, I'm going to keep the bulk of my houses, but this one has just been a pain for some reason, and I'm ready to cash out and put the money into another house in a different area.

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  • Steve Stern
    Lender · Haverstraw, NY · Member since 2009 · 199 posts · 10 votes
    13y

    Bob Pohl they will not dump housing. Many of them are holding long term and are not looking at this as a "trade".

    Exit #1 REIT
    Exit #2 sell to existing tenants once lending requirements loosen

    These are sophisticated investors using highly qualified local operators (deep knowledge of each neighborhood).

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  • Steve Stern
    Lender · Haverstraw, NY · Member since 2009 · 199 posts · 10 votes
    13y

    http://www.bloomberg.com/video/gray-says-blackstone-not-driving-u-s-housing-REULYKNeQEaI1jcId0X_zg.html

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  • Robert AdamsBusiness Member
    Real Estate Broker · Henderson, NV · Member since 2009 · 1k+ posts · 373 votes
    13y

    The hedge funds have been buying up Las Vegas and Henderson over the past 18 months. Now with increased prices the CAP rates and cash flow are not working for them and they are beginning to pull out of Vegas.

    [email protected]702-349-9175
    The Adams Team at Rothwell Gornt Companies4.972 Reviews
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  • Sam Jackson
    Wholesaler · Bradenton, FL · Member since 2013 · 15 posts · 0 votes
    13y

    Yup, the banks are setting up a pump and dump. For one they have no soul. Two, they don't care who they screw over. They need to dispose of their toxic debt. It's a great opportunity for smart investors, and it's better to be safe then sorry. Just look what Freddie and Fannie did with the lead up to 2006. Bankers have there own agenda. Just ride the waves, because there is nothing you can do about it.
    www.youtube.com/watch?v=wbrVR0uL8Zo

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  • Sam Jackson
    Wholesaler · Bradenton, FL · Member since 2013 · 15 posts · 0 votes
    13y

    Also Bloomberg is not Credible. The banks own it. No different from watching FOXNews.

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