Home Buying in Chicago>Question Details

Michael, Other/Just Looking in Chicago, IL

Anyone else noticed how these big hedge funds are coming into town and buying up all the inventory? What are your thoughts?

Asked by Michael, Chicago, IL Wed Feb 13, 2013

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MarkusAIC’s answer
In the last year, not meaning the last 2 months, I've done a fair amount of inspections for out of town investors coming into the Chicagoland market. The ones I've done inspections for have mostly been (am I'm going on what they've told me) smaller investment groups. Not big hedge funds of any kind.
Many have been Canadian, some from the east coast and a few from out west.
Most were buying individual parcels in the City to rehab and flip or rent out section 8 for a year or so and then flip. A couple only wanted to buy in the burbs because of horror stories they heard about dealing with the City.
I ran into an outfit about 3 years ago that was gobbling up distressed properties on the near west side to hold and then flip. Can't remember their name though.
Other than that I haven't encountered any mass purchases.
1 vote Thank Flag Link Thu Feb 14, 2013
This is very believable! The property values in some parts of Chicago are projected to significantly increase in the months/years to come and they are positioning themselves for a huge profit. Statistics show that Chicago is (and has been) slower to react to the housing/economic bounce that many other parts of the country have been experiencing. The result of this will only increase property values as the supply decreases. You can already see the lower supply in some areas of Chicago.
Warren Buffett on CNBC: I'd Buy Up 'A Couple Hundred Thousand' Single-Family Homes If I Could.

http://www.cnbc.com/id/46538421/Warren_Buffett_on_CNBC_I039d…

Thus, Investors are good for all of us assuming it does not create another bubble which I do not forsee in the near future.

Need I say more?
1 vote Thank Flag Link Wed Feb 13, 2013
100% correct. There are 3 big ones buying up in Chicago metro areas. Blackstone is one of them....
1 vote Thank Flag Link Wed Feb 13, 2013
your intel is 100% correct... good for them USA is still a great place to invest
1 vote Thank Flag Link Wed Feb 13, 2013
Investors buy real estate. Always have and always will. I am not surprised by this at all.
1 vote Thank Flag Link Wed Feb 13, 2013
There is a lot of investor activity at the bottom end of the market, but I haven't heard of any large hedge funds buying up all the inventory. If they are really large hedge funds they would be buying "tapes" directly from the lenders.
1 vote Thank Flag Link Wed Feb 13, 2013
Michael,

It is not just the hedge funds. Companies like the FLATS re-branding from Estate Properties is pooling investor money and buying up lots of building through out Chicago Land. Real Estate is on the rebound now is the time to buy and catch the steady wave up. This waive will be more realistic.

So if you are renting, go and buy if you can.
1 vote Thank Flag Link Wed Feb 13, 2013
Haven't noticed it but with real estate prices & borrowing costs at extremely low prices it's a great time to be a buyer whether you are a hedge fund or ma & pa.
0 votes Thank Flag Link Wed Feb 13, 2013
I'm really not aware of this either? Where are you getting this information? Are you sure the "town" is Chicago??
0 votes Thank Flag Link Wed Feb 13, 2013
I would like to see the facts behind that statement, because I have not seen it. One fund made a small (100 unit) purchase from Fannie Mae at the end of 2012. that pales in comparison to the 600 and 900 unit purchases in other metro areas.
We get inquiries all the time from people who say they represent a fund with $10 mil or $20 mil to spend in the Chicago market, and yet you do not see any large bulk purchases once they get a look at the areas where there is the opportunity for this.
I work in Garfield Park and can tell you there is a ton of inventory there and no buyers in sight for foreclosures or finished product. I do wish there was, but these people are coming out of Florida, Nevada, California and Arizona, where the housing stock was newer and the market has had a more robust rebound that ours.
when they see the west and south side of the city, they are not motivated nor do they see the same returns based on income and re-sale.
0 votes Thank Flag Link Wed Feb 13, 2013
What???????? I have not noticed and could care less.
0 votes Thank Flag Link Wed Feb 13, 2013
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