Second Homes 411

From: WSJ.com

Silver Portal to Buy Homes in San Diego,
Preferably Near Starbucks

By MICHAEL CORKERY
August 6, 2008; Page C1

Burl East is looking for a good deal on a foreclosed house. Make that a good deal on 1,500 foreclosed houses.

Mr. East, a managing principal of Silver Portal Capital LLC, a small real-estate investment bank, is raising $150 million to purchase foreclosed houses in and around the firm’s hometown of San Diego. He is scouring lender portfolios and real-estate listing services — as well as spots to get a cup of coffee — for houses that he can rent out and then resell in five years. That is when he bets that the local housing market will have recovered.

“It’s like the infantry,” says Mr. East, 48 years old, who plans to buy his first house later this month. “We’ve made a list, and we are going house to house.”

Mark Brewer

Silver Portal is raising money from pension-fund advisers and opportunity funds and has completed about 75% of its fund-raising process, Mr. East says.

At a time when investors are culling through the wreckage of distressed debt instruments and delinquent subprime mortgages, Silver Portal is venturing into largely uncharted territory. The business of buying and managing foreclosed single-family houses has typically been dominated by mom-and-pop landlords because it is considered too costly and labor-intensive for institutional investors.

But with the prices of foreclosed houses plunging in cities with healthy rental markets and good-quality housing stock, a few investors and operators are testing the waters.