Selling to Hedge Funds

[Brandon Jackson]

Okay, I have spent the last hour sitting through the doomsday presentation that a well known "guru" sent out (I will withhold the name out of professional courtesy).

After watching this, I became curious. Ive seen it all over the place about hedge funds buying up properties and keeping them as rentals (and why not? Its the best way to ensure long term, passive income). In this little "drink the Kool Aid" session, they mention that certain hedge funds will hire you to find them properties, or will simply buy your finished product.

So now I have to ask: Anyone ever deal with something like this? If its legitimate, how do you go about getting started? So far the posts Ive seen on here have been a little vague

[J Scott]

I think it's unlikely the big hedge funds will buy a low volume of deals directly from you -- they typically have management firms and/or agents on the ground in the areas where they buy and the purchasing will go through them.

That said, they'll certainly buy your properties. I've sold a lot of properties over the past 18 months to institutional investors. They generally have specific requirements (move in ready, attached garage, at least 2 baths, etc), but if you do a rehab that meets those requirements, it's not tough to make a sale. When starting out, the best thing to do is just list on the MLS and the agents for the investors will find you. Once you've done this a few times, you'll learn who the agents are, and you can start to market deals to them directly.

For example, in Atlanta, we've found about a half-dozen agents who are buying high volume for their clients (100+ per month) and another dozen or two who are buying a medium volume (20+ per month).