Buying Foreclosed Homes In Bulk From Banks Bad Idea For One Company Now Seeking To Unload Holdings

The Wall Street Journal reports:

• Many investors have been tempted by the idea of buying foreclosed homes in bulk from banks, at a steep discount. But the experiences of a Washington, D.C.-based property investment firm, Redbrick Partners LLC, show it can be difficult to manage a large number of single-family rental homes scattered across a metropolitan area.

• Though Redbrick was never in the business of buying foreclosed homes, the firm in recent years bought hundreds of properties in working-class areas of East Coast cities including Baltimore, Philadelphia and Trenton, N.J. It hired local managers to handle rentals and maintenance. Now Redbrick, formed in 2003, has concluded that it is too costly to manage those homes and is trying to sell most of them.

For more, see Beware the Foreclosure Allure (Redbrick's Model of Scattered Bets Is Cautionary Tale).