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The Single Family Asset class has been described as a three trillion dollar opportunity and current capital committed to buying properties is estimated to be six to eight billion.
At the IMN Conference, focused on the REO-to-rental market and currently underway in Scottsdale, Ariz., we are seeing huge interest from hedge funds, private equity groups. Now even Pension funds are looking to have a part in this booming market, as they are among the almost 500 registrants networking here.
Already the market has been compared to the multifamily market of the early 90’s and day-by-day more players enter the field.
So what are the questions attendees are asking?
Discussions around the fiscal cliff and the impact of the Mortgage Interest Deduction have already come up, the general composition of the group agrees that a loss of the MID would be beneficial to the investors buying here today.
That lends to the question of the homebuyer today, are they a partner or a competitor? Differences abound depending on the strategy of the investor — but the overall opinion is that the current lending environment simply does not position homeowners as any source of competition.
Additionally, discussions were focused on the opportunity of rental rate appreciation.
Panels here estimate that single family rent appreciation will occur at a faster rate vs. multifamily rents.
The justification for this theory is that families want to continue to live in communities, even when they were displaced by a short sale or foreclosure process.
This is driving demand and opportunity. It's why we came to Scottsdale.
Jonathan Spinetto is Founder and President of Blackhawk Consulting. His opinions are his own.