Following The Big Money Into Investment Properties

Dated: June 5 2013

Views: 1353

I have always been a firm believer of following the big money. Generally speaking these entities (big money firms) have the resources to perform far greater diligence than the average investor and when they take a position, you may want to follow their lead. In other words, they generally know something most of us don't and since they are trying to hit a certain return for their investors, they pour over data, then take a position and rarely make a mistake. 

This happens with Berkshire Hathaway and the stock market. When Warren Buffet takes a position in stocks, generally other smaller investors follow his lead creating a strong positive movement in the stock for the next few days. Well the same thing is happening right now in the real estate market. Big investments companies such as the Blackstone Group and Colony Capital are two such investors placing a big bet on the housing recovery.  
Blackstone owns nearly 26,000 residential properties and Colony Capital owns about 10,000 homes. Colony Capital is currently spending $250M per month to acquire more homes. Based on this type activity, one can guess that both of these companies have done significant research on the current and future housing market. Based on their actions, one can assume we should see appreciation in the housing market.
Although the market is hot and multiple offers are common, chasing a new investment property and securing one or more during this short window of opportunity will pay great dividends during your hold period and most importantly greater dividends in equity as the housing market continues it rebound. I own several rental properties in the area and currently seeking additional investments in California. Specific areas of interest include: Concord, Martinez, Pleasant Hill & Walnut Creek

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