While multi-family rental apartments have been the darling of real estate investors for several months, some private equity firms are beginning to bet on single-family rentals, the Wall Street Journal reported.
California-based GI Partners, the firm that made big profits buying empty data centers after the dot-com bubble burst in 2000, is investing $250 million in Waypoint Real Estate Group, a company that buys foreclosed homes and rents them out. Flush with funds, Waypoint may now expand beyond California to purchase foreclosed properties in South Florida, Chicago, Las Vegas and Phoenix.
Though the idea of renting out foreclosed homes has garnered much publicity, especially at the federal level, institutional investors have remained on the sidelines of the sector, because they lack the resources needed to manage thousands of scattered rental properties, the Journal said.
“It’s all done by mom-and-pop owners,” said Colin Wiel, co-founder of Waypoint, which buys about six houses a day. “It’s the industry that nobody thinks about because no large companies have entered into it.” [WSJ]