Large investment firms buying up rental properties in hot housing markets

In recent articles, we've advocated the benefits of cash flow real estate as a method of wealth preservation. We recommended that individual investors who are currently in or are planning for retirement look into this type of asset-based strategy because of its history of quality returns and low-risk benefits.

According to news sources like Forbes and USA Today, both large institutional firms and smaller hedge funds are beginning to see the advantages of this form of investment as well.

In a recent article, foreclosure industry source DSNews reported that government-backed mortgage servicer Fannie Mae sold 94 properties in Chicago to The Cogsville Group LLC, a private equity group from New York. As part of the deal, the financial institution promised to rent out these foreclosed homes for a period of at least three years. The value of the residential blocks were estimated at $13.7 million.

USA Today wrote in a piece published on October 21 that Colony Capital LLC, a multinational firm, intends to spend over $1 billion during 2012 and 2013 on residential properties, and expects to have a rental-based portfolio consisting of between 15,000 and 20,000 homes.

Areas in the United States like Arizona, which have been hit the hardest by the foreclosure crisis, are experiencing unprecedented levels of investor interest. Regional newspaper The Arizona Republic reported on October 22 that roughly 3,000 homes in the Phoenix area have been purchased by large finance institutions. According to the source, a large number of funds and groups that are worth a collective $11.5 billion will snatch up residences in the Arizona market over the next 18 months.

Due to this interest, there's no telling how home prices and inventory levels will be impacted over the next several years. Those who may have even a casual interest in cash flow real estate should consider looking more deeply into the subject before the more financially beneficial properties are snatched up. To learn more, visit today and get your own "Free Game Plan Report."