The Expert Podcast

Do you think the real estate market is overvalued Do you think we're in a bubble Do you think it's going to crash Well these people don't This is a very high valued hedge fund That is currently out there buying up homes as fast as they can In fact this company just bought 146 single family homes in Jacksonville Florida This is a hedge fund with hundreds of millions of dollars in assets And they acquired 146 rental homes in a community of Jacksonville It was made by a joint venture between two sponsored funds And these are investment funds with a $300 million credit facility Most of these homes 90% were already occupied at the time of acquisition These are rental homes
What is the significance of this event What this means is that There is smart money at least big money Continuing to go into the residential real market Even in spite of the fact that the prices have gone up And Florida is one of the biggest Increases in the country
It's not like Florida is a undervalued or a sleeper Geographic area Florida has seen some of the biggest increases So on top of that and this is June 27th 2022 this is recent There are Major hedge fund major investors pouring hundreds of millions of dollars Into residential real estate Look they have to they're betting the farm on this This is not somebody who's just speculating on Well I think I want to live here I love this house I'm willing to pay more This isn't somebody who needs a roof over their head This is somebody who their only reason for doing it is Numbers dollars and cents They're doing the math They don't care how nice the countertops are how pretty the backyard is They don't imagine their kids you know playing with the dog next to the Palm tree in the front yard This company is buying these houses strictly on numbers And they're Analysis is saying That the numbers are worth putting money into right now Now sure they're going to make rental income from this But they wouldn't do it If they didn't think the value was still going to be there If you rent these houses out even with a rental return at some point you have to sell them And if you sell them for a loss that could wipe out your rental income so they figure it's still a good deal It also could figure that they're thinking that the rental Dollar mounts are too low and they might Jack up the rents So in spite of the fact that from a gut level Many people think real estate's overvalued It's got a crash We're in a bubble It has to what goes up must come down 2008 All those factors Behind the scenes There are still a lot of money pouring into Real estate At very high levels Could they be stupid Sure There's been lots of big money that has gone into stuff that blown up Enron Bernie Madoff A lot of things have blown up that were Big money putting into it but this isn't the only story like this We've seen this movie before There are a lot of communities that are being bought up And a lot of money going into residential real estate In spite of the increase in prices