Private equity firm Colony Capital has struck a deal with Fannie Mae to purchase a 10% stake in a portfolio of 970 foreclosed homes for $35 million.
The Wall Street Journal reports that the portfolio represents 432 homes in California, 210 in Nevada and 328 in Arizona. Through the transaction, Fannie Mae will keep majority ownership of the portfolio, and Colony Capital will obtain minority stake and manage the portfolio, garnering cashflow from rental property management fees in the process.
Paul Fuhrman, a managing director at Colony, told the WSJ that the company will earn ‘about $1 million a month’ for managing the homes.
Read the article HERE.