Is this a good idea? Well, yeah if you are Blackstone or Colony or Equitybuild. They moved in at rock bottom, totally dominated the foreclosure market, and now they want to help you, the "little guy" start building your own portfolio of investment properties.
Awwww, it brings a tear to my eye thinking about how much Wall Street cares for small "mom and pop" investors. To think that they'd not only sell you a bunch of these homes, but they will even loan you the money to buy them with.
Knowing what I know about the old real estate seminar biz and how those numbers looked when the big gurus sold houses to unsuspecting small and newbie investors, this plan promises to be "da bomb" of real estate investing. I'll bet it's likely that the total costs will be pushing 90 cents on the dollar or more, of market value. While they say they will "guarantee" that the rental income will cover the debt service, that hardly means that you will make any money. Better keep a close eye on this deal, the fox is in the hen house.
The tell tale sign here is going to be the recent 4th quarter of 2013 housing data showing that home prices began trending into decline late in 2013. If home prices begin to fall and you are buying houses at 90 cents on the dollar, the outcome won't be pretty. My advice is to sit tight for now and watch what happens going into the 2014 selling season. If prices remain soft, you can bet on seeing more and more aggressive dumping by the big Wall Street funded real estate companies. Buying under these circumstances could end in disaster if prices go soft. The fundamentals appear to be headed in that direction.