Och-Ziff hedge fund looks to exit landlord business
(Reuters) – One of the first big hedge funds to try to profit from a rebound in the U.S. housing market by investing in foreclosed homes is looking to cash out, even as other institutional investors are still getting in.
Och-Ziff Capital Management Group LLC, the $31 billion hedge fund led by Daniel Och, recently told its investment partner, 643 Capital Management, that it wants to exit from the foreclosed homes business, said several people familiar with the matter.
The hedge fund is looking to make a profit on a portfolio of about 300 foreclosed homes in northern California that were acquired at distressed prices, said the sources, who did not want to be identified because they were not authorized to discuss the matter.
Though the total value of the portfolio is not known, its business model involved buying homes at an average price of about $100,000 apiece. In addition, Och-Ziff and its partner needed to spend tens of thousands of dollars on each home for potential renovations before renting them out.
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The experiences of renting a house from an owner who could care less, drove many people right into the clutches of the liars loan predators. Out of the frying pan, into fraudclosure and bankruptcy. It’s encouraging to see a fund vacate an industry that at the very bottom, profits off of the very worst of social rot.
The positive cash flow types are still around however, grabbing at section 8-ers, making 3 bedrooms out of one with drywall, using brutal strong arm tactics to keep renters “in line”. Basically all of the wonderful features of once vibrant housing completely dismantled into a morass of miserable squalor.