Chasing Higher Yields
Buying, renting, and selling single family residences
Private investors are entering the distressed single family home (SFH) market with increasing frequency, buying large numbers of properties with intent to refurbish and then rent and/or sell them.
A successful approach to this new institutional asset class requires careful strategy, scalable acquisition and operational plans, independent valuation sources, robust management infrastructure, and careful consideration of tax consequences.
This article offers perspectives on single-family residential foreclosure sales; among them, the challenges of holding foreclosed single-family residences; asset management issues; lessons learned on liquidation approaches; acquisition strategies; and potential transaction structures.
Institutional investors are actively seeking foreclosed single-family residences from lenders, government-sponsored enterprises (GSE), and municipal courthouses. They believe that markets will recover over time, rental markets will provide strong yields, and ample capital will remain available.