Hedge Fund Obtains $2.1 B Loan to Buy SFRs – Investors Pay Attention!

[Corey Dutton]

If you are a real estate investor who buys single family homes, you should sit up and pay attention. This newly announced deal will affect the future of your real estate business and could even put you OUT of business.

Blackstone, the largest real estate private equity fund, just consummated a
$2.1 B loan via Deutsche Bank AG. Blackstone has already invested over $3 B into the purchase of single family homes since 2012 for use as rental properties. This new loan will allow the group to take down another $2 B of inventory over the next 2 years.

Particularly in the Southern California, Las Vegas, and Phoenix markets, Blackstone has created what many are calling an “artificial mini-bubble.” With so many buyers coming off the sidelines in 2012, combined with representatives of hedge funds bidding up properties to above asking prices, it’s no wonder that prices are continuing to rise in those markets.

Known to many real estate investors in California as “the Dark Side of the Force,” Blackstone may all but eliminate any opportunity for the small real estate investor to make money in 2013 and 2014. One Blackstone representative said to a real estate investor friend of mine in California that they were going to put, “all of the little guys out of business.”

Are you a real estate investor who buys single family homes in one of the markets that Blackstone will be targeting over the next few years? Because this information has not been disclosed or readily available, I suggest doing your homework and making sure you aren’t one of those who become a victim of Blackstone, the new “Darth Vader” of the real estate market.

Source: http://nreionline.com/single-family-housing/blackstone-secures-21b-loan-home-purchases

[Dawn Anastasi]

There was a blog post recently ... those that were looking to get gold in the gold rush were not the ones getting rich -- it was the ones selling the pick axes, gold pans, etc. Being a provider of some service the hedge funds need, might be better than trying to get in on the same crop that the hedge funds are buying.