AHMEDABAD: City-based global real estate player Pacifica Companies (PC) has said it aims to rent out 700 single family homes in US state of Florida within a year, after having won bids for these foreclosed homes there.
Pacifica purchased a managing interest of 20 per cent for over USD 12 million, after having won bids for the 700 residential property portfolio put up for auction by Fannie Mae, a US government sponsored mortgage company.
Fannie Mae, a US Federal Housing Finance Agency body, ventured into such an arrangement for the first time, when it had the option to dispose units as per the Foreclosure Act, which is comparable to India’s Sarafesi Act, to recover bank loans.
“We won bids for 700 foreclosed homes which were put for auction by Fannie Mae, amongst 50 bidders in fray. Within a year, these 700 single family homes shall be put on rentals.
“We get 20 per cent upfront management fee on gross rental income collected. The minimum hold period is for three years, and thereafter a call shall be taken on exit,” Pacifica’s Managing Director Rocky Israni told reporters.
The company holds around 4,500 residential units spread across 40 states, with the majority in California, Florida, Nevada, Arizona and Washington.
“In four years, we expect the revenue split will change and it will be 50:50 ratio between Pacifica and Fannie Mae, after a certain threshold is achieved,” he said.
During the sub-prime crisis of 2008, US banks foreclosed homes where customers failed to repay home loans on their property.
Later, portfolios of such properties in each state was bought by federal agencies like Fannie Mae from these banks. -PTI
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