Thursday, Nov 27, 2008
Just when you thought it was getting safe - you will have to outbid the sharks!
FT: Investor buys entire street at cut prices
Investment funds are taking advantage of the sharp downturn in house prices to buy cheap properties from struggling buy-to-let landlords and distressed homeowners
Posted by whostolemyendowment @ 12:22 PM (952 views) Add Comment
10 Comments
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1. planning4acrash said...
Just as I told you, re: Woolies, the sharks will use our takeover, I mean, bailout money, to buy up the depreciated assets of businesses they decimated. And we'll pay interest on the loans via income tax, stealth tax, all kinds of tax, and inflation.
2. str 2007 said...
Maybe HPC members could create their own property investment fund, at least we've got a good idea of the real prices that should be paid.
3. shipbuilder said...
Some of these investors will be OK, most I suspect will be like the guys in the depression who bought halfway down the market thinking it had bottomed out. There may be enough to cause a bull trap, maybe not, but until the average homebuyer comes back, things are on the way down.
4. Alan Lubin said...
friend of mine is running a vulture fund over in Spain - i asked him if he had any plans to set up over here but he said that the market is too sophisticated and that players are well connected and have been well placed for a while to get involved.
5. mountain goat said...
No thanks Str2007, not interested in property investment right now even though it would hedge my main investment - a naked short on this market by renting ;-)
6. wiltshire said...
Too much social injustice is going to lead to direct action.
7. planning4acrash said...
str 2007 - Nearer the time, we'll be sharing info about where to buy and how. For now, just try to save up some secure capital.
8. last_days_of_disco said...
This fund is going to lose their shirts, they are way too early.
9. 51ck-6-51x said...
mountain goat:
You have no naked short in property.
You are paying to borrow a property you need so as not to be long.
A naked short would be selling someone a property you do not own now with the idea that by the time they want delivery you can buy the property for less than you sold it.
last_days_of_disco:
Whether the fund lose their shirts depends on their strategy and the terms of their funding deals.
They may well be searching for value whilst expecting prices in general to fall much farther. with this strategy they will currently be looking for only the most distressed assets, and only buy up a very small percentage of what they look at with an eye to increase their purchase rate during the period of the draw down - this is a typical long-term strategy - their average price will not be as good as if they find the market bottom and go on a spending spree - but that is hard for two reasons: 1) finding the bottom; and 2) managing to buy enough at that time. However with a long-term view the average price will be a good one.
10. Bobby9983 said...
And on the basis that most of these funds will be buying at 40-50% off value summer 07 I would say the bottom has already been found.