Beware! Hedge Funds Are Buying Distressed Homes In Orlando (sales, foreclosure)

[FLBirdwatcher]

Is the rental market in Orlando capable of sustaining such practices? If not, I would think that the hedge fund would want to sell out quickly.

[StreetSmarts]

I've seen many homes being bought by investors for rent. Its awful. I love being in real estate development, love the company I work for, but I'll hopefully transfer within the company to greenville sc if this happens. i cant go thru another bust like a few yrs ago.

[FLBirdwatcher]

Are any foreclosures coming on the market for sale or are the hedge funds getting first pickings on these?

[WithDisp]

They'll hit the market now and again- the investors have a set amount they are willing to pay. Only issue is, they pay cash which makes it challenging to compete.

[FLBirdwatcher]

I wonder what the set amount is that investors are willing to pay. Do they buy in all neighborhoods or just certain ones?

[neaters]

Assume a property is not in foreclosure and owned outright, these investors are willing to make lucrative cash offers?

[vvega]

As any seller, bank might prefer a slightly lower cash offer to ensure quick closing and hedge itself from the risk of buyer’s failure to obtain financing. About 6 months ago I lost to a cash bidder, but this was a fair game: their offer was stronger. Did it actually happen to anyone that your higher-price offer lost to a cash bidder offering significantly less money?

[FLBirdwatcher]

Cash being king, I see why big investors are winning and buying up all of the distressed properties. Hedge funds, in particular, are supported by banks who have some of the holdings of the hedge funds. If a bank has foreclosure inventory, they can simply call the hedge fund investors to see if they are interested in it before listing the property on the market. That way the banks do not have the expense of listing a property with a realtor. There are probably many foreclosure properties being sold this way that we never even hear about, because they never hit the MLS "for sale" market.

[GregTraub]

Originally Posted by neaters

Assume a property is not in foreclosure and owned outright, these investors are willing to make lucrative cash offers?

Yes, All Depends on if your home falls within their buying criteria. All of them have different criteria though in terms of area, price, age, condition.

Originally Posted by FLBirdwatcher

Are any foreclosures coming on the market for sale or are the hedge funds getting first pickings on these?

Yes, foreclosures are still coming on the market; but at the same time, again yes, there are many "hedge funds" buying the mortgages directly from the banks and foreclosing themselves, or buying at the courthouse auctions before they ever make it to the open market.

Originally Posted by FLBirdwatcher

I wonder what the set amount is that investors are willing to pay. Do they buy in all neighborhoods or just certain ones?

All the funds are different and have different criteria.

Originally Posted by FLBirdwatcher

Is the rental market in Orlando capable of sustaining such practices?

Yes, but not as strong a market as others around the country so we aren't seeing HUGE purchases, but still a good amount.

[FLBirdwatcher]

Originally Posted by GregTraub

Yes, All Depends on if your home falls within their buying criteria. All of them have different criteria though in terms of area, price, age, condition.



Yes, foreclosures are still coming on the market; but at the same time, again yes, there are many "hedge funds" buying the mortgages directly from the banks and foreclosing themselves, or buying at the courthouse auctions before they ever make it to the open market.


All the funds are different and have different criteria.


Yes, but not as strong a market as others around the country so we aren't seeing HUGE purchases, but still a good amount.

Thank you for your informative and honest answers. I just hope the hedge funds do not cause a real estate bubble by running up the prices of houses due to low inventory and then a crash in prices when they put their houses on the market. Their ultimate goal is to make money and I doubt that they can make the money they desire by renting out the properties. Their potential profits will come when they unload their properties onto the market. When that happens, they will be competing with regular families who wish to sell their homes. The inventory of for sale houses could get very large at that time which could cause a drop in prices. Couple that with the rising interest rates on mortgages and the coming changes to Fannie Mae and Freddie Mac the first of the year, it will be interesting to see how it all plays out. Rising home prices, rising interest rates, large inventory, and tight lending practices--sounds like 2008.