Vulture investors move from flippers to landlords in down market

A feast for vulture traders is being served by the depressed Americas housing market. Flocks of vulture investors are snapping up distressed properties ripe for the plucking due to depressed prices, record-low interest rates and a strong rental market driven by individuals who have lost their houses. Nevertheless, typical vulture investing strategies are changing with the bad economy. In boom times, vulture investors were home flippers looking for quick personal loans. Now that times are bad, using properties to generate healthy rental incomes is the preferred approach.

Source of article - Vulture investors move from flippers to landlords in down market by Personal Money Store.

Vulture investors circle a struggling housing market

Vulture investors earned the name by swooping down and snapping up distressed properties. CNN reports that they focus on places like Las Vegas, Phoenix and Miami, where foreclosures and short sales have dropped prices up to 70 percent. Home prices often were driven unrealistically high by their frequent flipping. These days, potential rental profits are looked at as the more stable long-term strategy. Vulture investors today may actually be helping stabilize neighborhoods.

Strategy changes for vulture investing

Vulture investors have switched from flipping to renting due to several factors in the current housing market. Mortgage resource HSH.com said ever-rising home prices, the meal ticket for house flippers, are a distant memory. There\s no cash in getting low and selling low. Also, millions of foreclosed borrowers become tenants for vulture investors who got to the properties for a song, because they have to wait years before they can get an additional mortgage.

Cash flow the primary attraction for vulture investors

Vulture investors that pay in money can start making cash from the first month they start renting the homes. CNN uses Las Vegas as a case study, where home prices have plummeted 70 percent when rents have only fallen about 20 percent. Las Vegas vulture investor Glenn Plantone, as outlined by CNN, is getting a 12-to-14 percent net cash flow return on investment . The beauty of cash flow is that if real estate values continue to fall, the return for the vulture investor holds steady.

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