Institutional investors as well as nontraditional investors are poised with $6 to $9 billion to acquire REO (real estate-owned) properties that many number from 60,000 to 90,000 in the single-family rental market, according to nationalmortgagenews. Keefe, Bruyette & Woods analyst Jade Rahmani says while this may account for only 15 percent of the distressed market, this REO-to-rental market implies long-term investment and the emergence of an institutional asset class. “Investor interest has increased meaningfully as the large foreclosure inventory combined with a secular shift towards renting has created the possibility of larger-scale investments in the space,” he notes. MHProNews has learned analysts estimate cash returns in the 5-7 percent range with the possibility of 15-20 percent total returns.
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