[quote=jpinpb]davelj – are the “investors” buying bulk places and renting them out? Are they trying to turn them around and flip/sell for profit at higher than what they bought? [/quote]
Both. They are IRR driven (as opposed to NPV driven). If they can buy something for $150K, put $20K into it and sell it for $200K in a matter of six months, then that’s an 18% IRR over six months (excluding expenses), or more than double that on an annualized basis.
If, on the other hand, they can’t get that IRR (say 20%-25% annualized) by flipping it, they’ll fix it up and rent it out until the market improves. It’s a model-driven process with simple inputs. On the rentals, they’ll obviously buy the property for cash and then lever it up to the degree they can to free up equity for other purchases.
