Blackstone Group and other Investment Firms Buying Florida Foreclosures
According to the Palm Beach Post, several hedge funds and other investment firms purchased more than 5,000 Florida homes out of foreclosure last year. RealtyTrac, an online marketplace of foreclosure properties, issued a report indicating that several big firms including New York-based Blackstone Group and Lake Success Rentals, based in Ft. Lauderdale, purchased hundreds of distressed Florida homes last year. All of the homes were in some stage of foreclosure and were purchased with plans of being rented until property values increase enough to allow for the properties to be sold for a sizeable profit.
Real estate experts warn that the rush by these big money firms to purchase distressed real estate at bargain basement prices could lead to locally based housing price bubbles. South Florida real estate investor Don Cameron, owner of a We Buy Ugly Houses franchise, purchased 100 houses last year to renovate and sell at a profit. Cameron says he has lost out on homes because of competition from large investment companies. According to Cameron, the big firms pay asking price or more, which Cameron says is inflating the market. Experts say, if the investment firms tire of waiting for housing prices to rebound, they may flood the market with properties.