Wall Street is convinced that your house is a better investment than you think. In the past six months, a number of investment firms, hedge funds, private equity partnerships and real estate investors have turned into ravenous buyers of single-family homes – and not just any homes… but foreclosures. Investment banks, who also want in on the action, are lining up financing options to continue the acquisitions. For instance: about a year ago, private equity powerhouse Blackstone Group wasn’t even considering single-family homes but these days, the company owns 2,000 single-family homes valued at $300 million. Buying single-family homes as an investment option is nothing new (landlords do this all the time). But what’s striking is that these purchases – once limited to mom-and-pop landlords – are now being bought by large Real Estate Investment Trusts (REITs) and private equity funds who historically have focused on entire apartment buildings and commercial real estate, like shopping malls and office buildings. Wall Street’s plan is to buy foreclosed homes at a discount, fix them up, and then rent (or sell) them for a profit.

So how does this impact your house?  According to Goldman Sachs report from earlier this year, the firm predicts that investors could generate 8% investment returns by buying up, fixing up and renting out homes. This means that buying a home right now or even owning the one you have, as long as you didn’t overpay too badly, is a pretty solid investment at a time when 10-year Treasury bonds are paying out 1.5%, and investment yield in general is difficult to find.

We are available to answer your questions on New York City Real Estate. Whether you are interested in buying, selling or renting, we will be pleased to hear from you or anybody you know who can take advantage of our services. Thank You for reading.

Warmest Regards,
Riccardo Ravasini