Foreclosed homes are shown as yellow dots in map of central East Oakland from 2007-2011.
A recent report released by the Urban Strategies Council shows that 42 percent of the 10,508 homes that went into foreclosure in Oakland between January 2007 and October 2011 were sold to investors who frequently turn around and rent the home at a rate higher than what a homeowner would pay if he or she had purchased the home.
Private equity firms are buying low-priced properties in Oakland to buy and rent out. “Very few people are aware of the investor activity that taking place under our feet,” said Steve King, Economic Development Coordinator at Urban Strategies.
Private equity firms such as the Waypoint Real Estate Group LLC, Community Fund LLC and REO Homes 2 LLC, have bought nearly half of Oakland’s foreclosed homes. It is a trend that is occurring across the nation.
Community Fund LLC thus far has purchased three hundred and seven foreclosed homes and apartment buildings, paying an average of $111,000 per foreclosed home. The problem is that “all-cash” investors are squeezing out homeowners who attempt to buy a home with conventional financing, according to housing activists.