IS IT JUST ME or are institutional investors also raiding your city? Here I loosely define ‘institutional investors’ as ‘organized money’, something backed by a well oiled capital machinery. Because it sure don’t look like cash from under their pillow.
My emotional progression about all of this (not in the least, random):
- Damn, those guys are smart.
- Since when did institutional money become this nimble?
- Aren’t they supposed to be at least a year and a half behind than the rest of us ‘smart, flexible, daily-market-statistics-in-the-field-guys?’
- Crap, they’re getting the best deals in the courthouse steps.
- Wait, are all three of these men colluding in this auction?
- Son of a gun… Won’t even answer a simple question. I knew it!
- This insane demand could actually help my market reach a bottom.
- Note to self: Act like this is going to continue. Compete. I need to find money now. Get cash-flow producing properties. I can’t afford to wait for them to be right and allow them to slurp up all the good deals (They’re not going to stop. They’re obviously unafraid of the dreaded shadow inventory).
I wasn’t planning on seriously investing ’til winter. I can understand why some of you are thinking that I’m just being emotionally competitive (and I am) swayed by a random, big wave that might not even be there tomorrow. And that I should stick to the plan.
You may be right. If it was 2009.
But folks, this is our fifth year in real estate market decline. If you count when the charts officially fell over the cliff, we are in year seven (July 2005). The eighth year since builder stocks started losing it’s mojo.
Yes I have a sense of urgency; and I would, oh, would I have loved to have this eureka internally instead of being shoved in my face (our months supply of inventory is now counted by days. Days!).
It’s hardly a Reno thing…
“..the company, which has bought about 1,200 homes since 2008 — and is now buying five to seven a day…”
“..large investors are salivating at the opportunity to buy perhaps thousands of homes at deep discounts and fill them with tenants…”
“..This year, Waypoint signed a $400 million deal with GI Partners, a private equity firm in Silicon Valley. Gary Beasley, Waypoint’s managing director, says the company plans to buy 10,000 to 15,000 more homes by the end of next year..”
Here’s…. the motive:
“But the new investors believe the rental income can deliver returns well above those offered by Treasury securities or stock dividends..”
I don’t have a heart warming ending to this, no David slaying Goliath feel good quote. But this I know: We have at hand a foreign but extremely competent competition. Something that I haven’t seen the last ten years. We need not abandon our fight plan, but we sure need to adjust to this behemoth in front of us.