On the topic of hedge funds and bad real estate deals… Look at Stuyvesant Town in NYC and the big boys who bought it – then backed out of the deal, leaving CalPers, among others, holding the bag.
Not local… but it could happen on a smaller scale here.
Difference is that the SFR’s and condos in SD Co are typically offered at anywhere from 6-10% cap now. Same in many NJ towns that I’m interested in.
StuyTown — let’s do the math. They paid about $500k per apartment. Average rent was likely about $2000/mo, what with rent control and stabilization of quite a few tenants. Management, maintenance costs, and property taxes likely eat 50% of this, so we’re left with $1000/mo, or $12k/yr per apartment, if VERY lucky. Yeah, the fucking fools bought at 2.4% cap.[/quote]
They also did that in 2006. A few things have changed since then.
