Fidelity SPDR Advertisement
Home > Boards > Stock Clubs > Long-Term > Billionaire Boys Club Member Forum (BBCMF)

in full; Private Equity Bets Billions on Foreclosures

Public Reply | Private Reply | Keep | Last ReadPost New MsgNext 10 | Previous | Next
mick Member Profile
Member Level 
Followed By 1,990
Posts 547,814
Boards Moderated 206
Alias Born 09/04/00
160x600 placeholder
Roche Hit By Failure Of Cancer Drug Trial
Roche said a late-stage study of its breast cancer drug Kadcyla failed to yield superior results to an existing treatment, damaging the outlook for stronger sales in one of its key drug markets.
More Top Equities Stories Of The Day
Deezer Names New CEO Before Full U.S. Launch
Whistleblowers Score a Big Payday -- Update
Mobile's Rise Poses a Riddle for Banks
AT&T Boosts Dividend
U.S. Hot Stocks: Hot Stocks to Watch
Brazilian Shares Rise, Led by Rossi Residencial; Real Weakens Slightly
Oracle Beats Street View for First Time in a Year
Alstom CEO Expects to Settle DOJ Bribery Allegations Very Soon
mick Member Level  Friday, 07/27/12 01:25:00 AM
Re: None
Post # of 383760 
in full; Private Equity Bets Billions on Foreclosures
By John Gittelsohn on July 26, 2012 Tweet
http://www.businessweek.com/articles/2012-07-26/private-equity-bets-billions-on-foreclosures

Carrington Capital Management paid $207,000 in May for a house at 36644 Ponderosa Court in Murrieta, Calif. Built in 2005, the four-bedroom home originally sold for $420,500 with 100 percent financing. The owner borrowed $100,000 more in 2007, increasing total debt on the property to $520,000, before losing the home to a bank in August 2011.

The house looked almost new as workers replaced the kitchen stove and laid fresh sod on the front lawn during a July 23 visit. “When you think of foreclosed property, this isn’t the first thing that comes to mind,” says Carrington Vice President Rick Sharga. “I’m betting renters will be lining up when we put this on the market.”

Private equity firms including Colony Capital, Blackstone Group (BX), KKR (KKR), and Och-Ziff Capital Management Group (OZM) are rushing to make similar bets. They plan to spend at least $7.2 billion to snatch up undervalued single-family homes and then rent them out.

The aim is to capitalize on U.S. home prices that are 34 percent below their 2006 peak, as well as on a broader shift toward renting. At 65 percent in the first quarter, U.S. homeownership is at its lowest level since 1997. Scott Simon, head of mortgage bonds at Pimco, says about 6 million borrowers will lose their homes in the next five years, creating demand for as many as 4 million new rental homes.

“Our view is there’s tons to buy and tons to buy attractively,” says Justin Chang, acting president of Colony Capital’s American Homes unit.



Public Reply | Private Reply | Keep | Last ReadPost New MsgNext 10 | Previous | Next
Follow Board Follow Board Keyboard Shortcuts Report TOS Violation
X
Current Price
Change
Volume
Detailed Quote - Discussion Board
Intraday Chart
+/- to Watchlist