How To Crack The Hedge Fund Code...Selling Property

[Chuck Walker]

I'm in the St. Louis market which has been a hot market for awhile now. We see hedge funds, corporate purchase, bulk packages, (you name it, however you want to label it) coming in and picking up various numbers of turn-key rentals. These properties are comps to some that we have put out for purchase but we typically have better rents and/or better prices. However, our properties tend to get passed on by these corporate/hedge fund groups. I'm curious why this is happening. I just saw a house that is slightly smaller and getting less in rent sell for 15k more than one I have available just 2 blocks away (same neighborhood) with a ROI of 18%. That smaller house was sold to a group who is still active in my market. I've done some research and can find no agent attached to the purchases. I even reached out to the company but cannot get a return call.

  I see this happen time and again and I, along with some other investor colleagues of mine, just shake our heads stumped at why it happens. Is this an agent issue in that a buyer has an agent working for them and the agent is cherry picking the properties that will make them (the agent) the best money on the deal? I've been in the market for awhile now and I still don't get it.