SAMFORD, CT — (Marketwire) — 04/19/12 — For as devastating as the 2007 housing market crash proved to so many homeowners, it might seem futile to look for a silver lining. For private investors and venture capitalists, however, there has emerged a clear and definite perk to the housing crash — namely, the abundance of foreclosed properties. The latest trend among private equity companies is to invest these foreclosed properties, flipping them or refurbishing them as new, profitable business ventures. According to a recent Business Week , this approach has proven lucrative to many investors. Private equity real estate company Soundview Real Estate Partners is chief among the investment companies benefiting from current market realities.
According to the Business Week report, many investors and private equity firms are investing in properties they never thought they would invest in, and often gaining significant yields. The article points out, for example, that many single-family homes, largely foreclosures, are selling for less than half their original value. Investors are snatching them up and using them as rental properties. The return is typically in the ballpark of 8 or 9 percent, and, should the market rebound, the appreciation stands to be as much as 20%.
is taking advantage of these opportunities, but on a different scale. Right now the company is availing itself of low prices on much larger properties. “In the past we-ve been involved in large-scale single family home REO acquisitions, but currently we are actively buying failed condominium loans and converting them to apartment rentals,” confirms Nicholas Newman, the President of Soundview Real Estate Partners. “We feel that the scale of apartment buildings is a better fit for our investment strategy.”
may be pursuing larger properties, but even investors focusing on single-family houses are finding success in today-s real estate market. The yields are simply very high, due partly to the low prices of foreclosed properties, but also to the high demand for rental properties. Indeed, the Business Week article confirms that the rental property industry is a $3 trillion market. While many investors have long “shunned it” for being too risky or difficult, more and more private equity companies are changing their tunes given the realities of today-s markets.
ABOUT:
Soundview Real Estate Partners was formed in January 2003 as an expansion of the real estate investment platform established by company President, Nicholas Newman. The company, led by Newman and Vice President Benjamin Marcus, uses a joint venture-driven investment model built on an established network of local and regional real estate operators. Since 2003, Soundview has invested over $250 million in equity in over 70 separate transactions and combined real estate valued in excess of $2 billion.