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- June 2012: Vol. 24 No. 6

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Home Sweet Home: Managers Begin to Build Rental Home Portfolios, But Will Investors Put Out the Welcome Mat?

by Brad Berton

Considerable institutional capital has started targeting the budding business of operating foreclosed single-family homes as rental properties. A handful of investment managers are ramping up and designing programs to take advantage of the current distress in the single-family market. A lot of variables playing out in coming years will determine whether this REO-to-rental space ultimately becomes a core institutional investment category.

As the giant federal housing enterprises and money center banks slowly start offering foreclosed houses in bulk, institutional capital managers are jockeying to back specialists able to aggregate and operate ever-larger rental-home portfolios — and perhaps even take them public some day.

Yes, these budding opportunistic pursuits could represent the genesis of a real estate asset category that hasn’t previously attracted institutional attention: single-family rental portfolios.

Or maybe not.

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