I know what you’re thinking…. What is a Hedge fund? By Wikipedia’s definition, a Hedge fund is “a collective investment scheme, often structured as a limited partnership, that invests private capital speculatively to maximize capital appreciation.”
You might be asking, “How does a hedge fund affect me and my home here in Riverside?”. Well, the hedge funds have recently seen (and acted on) the enormous potential in homes that once were selling for 300k, which are now selling for a fraction of that price, since the recession of 2008. In the past couple of years, thousands of properties were purchased by different real estate funds in Southern California. Yes, though the territory is extremely large, the reality is that there are a large number of these investment funds which DEFINITELY create increased demand. Combine the demand with the shrinking inventory caused by institutional and private buyers, and it equals strong home price appreciation! If you’re thinking about buying a home or even a second home for investment purposes, consider that investors and funds are making the move right now (and have been for the past several months). The longer you wait to get involved, the higher the home prices will be and the less return you’ll see on your real estate investment.
To love a hedge fund or to despise the hedge fund? Make no doubt about it, their impact on the local market and our home values is very real. To everyone wondering that same question, “how long will it last?”, The answer is that no one knows for sure. But if anyone out there knows anything about hedge funds, they know about Warren Buffett. He is a CEO Berkshire Hathaway and is considered to be the most successful investor of all time. Buffet believes it is a smart move right now to invest in a distressed property for a reduced purchase price, and find a rental family to move in and pay rent. That way you’ll be adding a cheap asset to your portfolio. Lately, many funds and private investors (like you) have been very active in purchasing distressed homes in the Riverside area either adding to their investment portfolios, or starting one. So, with thousands of these homes being purchased up by hedge funds and private investors right here in our backyard in the Inland Empire, it is apparent someone is learning the lesson Warren Buffet knew long ago!
So with all of that said, I hope you are still with me. I know it can great real tricky understanding how the market works in terms of hedge funds and private investors. In that same note, if you are interested in buying a home for yourself, or buying a home as an investment (be like Buffett), my team of real estate agents is ready to help and knowledgeable about the Riverside area real estate market. Your Riverside real estate agent (and surrounding cities of course), Michelle Longnaker @ 760-687-6072.