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Why This Billionaire Investor Is Aggressively Buying Income Generating Properties

If you own a home or are interested in buying one, you are aware of the considerable residential real estate downturn in the United States. Sales numbers are falling to the lowest rates since 2020, but interest rates continue to rise to around 6.5%. This scenario does not mean that investors should look for another option seen as less volatile.

Take real estate investment trusts (REITs), for example. REITs are not just a platform to invest in residential real estate, offering properties such as commercial spaces, large malls, hotels, apartment buildings, offices and hospitals. And while house prices remain high, other property categories are not as overvalued, potentially shielding investors from the risk of sharp price declines.

Investors have not given up on the residential market, using financing options to take advantage of low housing stocks and turn properties into rentals. This strategy contributes to the high housing prices observed in the last two years.

According to real estate intelligence data firm CoreLogic, investor share of single-family homes sold in the first quarter of 2022 reached 28%, up 11% from the same period in 2021. Their data also showed that investors with 1,000 or more homes bought 3% of homes in 2021 and so far in 2022, compared to 1% in previous years.

Big real estate players like Redfin Corp. and Offerpad Solutions Inc. they also bought houses on a large scale. Zillow Group Inc. fell flat on its face in this endeavor, alienating real estate agents who stopped advertising with a company they believed was competing with them. “Supply shortages are also an advantage for landlords,” said Sheharyar Bokhari, an economist at Redfin. “Many people who cannot find a home to buy are forced to rent.”

Real Estate Billionaire, Author and Sales Trainer Grant Cardone sees opportunity in the current market.

“I believe we are entering the BEST real estate market opportunity since 2008. With the Fed raising interest rates, this has driven homebuyers away, which means prices will drop. If you are an end user looking to get into housing market , now is a great time to buy a home cheaper than at the beginning of the year. You should look for people who at the end of last year or beginning of this year were hoping to make a quick move and had an adjustable loan. They are waking up without a market to sell and your loan payments are doubling,” he said. “Also look for institutions that have already written off a large part of their portfolios and will bring a lot of product/stock to the market in the last quarter of this year.”

Cardone, the former Discovery Network undercover billionaire and CEO or partner in seven private companies, put a rubber stamp on his belief that investors don’t need to shy away from real estate investing by saying, “I’m an aggressive buyer through the end of the year and next year of income generating real estate.”

Of course, not everyone has the cash on hand to buy properties at a discount. A growing number of investors are turning to more passive options, such as real estate funds managed by Cardone through Cardone Capitalwhich has raised approximately $1 billion from nearly 12,000 accredited and non-accredited investors and has a portfolio comprising approximately 12,000 multi-family units and over 235,000 square feet of office space.

Some investors are even entering the market with as little as $100 through the Jeff Bezosfamily-backed real estate investment platform that sells shares of single-family rentals. The company has already financed 203 properties worth more than $75 million.

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Original story found here.

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