Investing in foreclosed US homes is quickly becoming a popular choice for REITs:

“The next wave of real estate investment trusts south of the border is likely to be made of distressed properties bought by private-equity investors so cheaply that they can be rented out and still produce good returns despite the high management costs. This asset class does not exist now among REITs, which, in terms of rental properties, has been restricted to apartment buildings.

Since last spring, Toronto-based Tricon Capital Group has accumulated a portfolio of about 700 houses for about US$80-million in various U.S. locations. Blackstone Group LP has spent about US$300-million to buy more than 2,000 foreclosed homes. Beazer Homes USA has created Beazer Pre-Owned Rental Homes Inc., backed by private-equity firm Kohlberg Kravis Roberts & Co.

David Berman, chief executive of Tricon Capital, says unlike vacation properties, there is nothing romantic about his investments — it’s all about the numbers.” (Source: Fiancial Post: November 10, 2012)

Please click link below to read article in its entirety:

http://business.financialpost.com/2012/11/10/no-better-time-to-buy-reits-now-invest-in-foreclosed-u-s-homes/

 

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