Cerberus Seeks to Bankroll Investor Landlords

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Cerberus seeks to bankroll investor landlords

(Reuters) – Private equity firm Cerberus Capital Management wants to provide financing to small investment firms that are buying foreclosed homes as part of a long-term bullish bet on the housing recovery, according to four sources familiar with the situation.

Cerberus is targeting investment firms that are looking to buy a small number of homes in niche housing markets in the U.S. and rent them out, the sources said. These investors cannot tap the much larger financing deals being put together by banks such as Deutsche Bank, Credit Suisse, and Goldman Sachs Group for institutional buyers of foreclosed homes.

Cerberus’ financing deals will be small, under $25 million, and many will be for less than $10 million, the sources said, declining to be identified as the new loan product has not been announced. A spokesman for Cerberus declined to comment.

The move by the New York-based firm, with $20 billion under management, comes amid a rush over the past year by investor groups seeking to raise cash to buy up cheap homes.

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