What's the Best Path To Real-Estate Profits?
Please read the entire Barron’s Article
One of the unique aspects of this real-estate recovery is the role of large investors, including private-equity firms such as Blackstone Group (BX) and Colony Capital. In the past, real-estate recoveries were driven by individuals looking for homes to live in and small "Mom and Pop" investors buying a few homes. Institutional investors shied away from investing in large portfolios of single-family homes due to the logistical challenges of managing the individual properties.
However, these big investors are overcoming their reluctance because of the strong rental market and the potential for capital gains in an environment where returns are hard to come by. By late March, Blackstone was buying $100 million of homes a week and had purchased 20,000 houses worth $3.5 billion since closing its $13.3 billion Blackstone Real Estate Partners VII Fund in the fall. Colony Capital had spent $1 billion on 8,000 homes since closing its $1.5 billion Colony Distressed Credit Fund II in the spring of 2012. These funds are largely aimed at institutional investors.