MEMPHIS, Tenn. — ABC 24 News is digging into the companies buying up thousands of single-family homes in Shelby County.
A recent analysis from Shelby County Property Assessor Melvin Burgess' office found in the past two years, investment companies have bought more than 7,000 homes and turned them into rental properties.
It's not only pushing up the price of rentals, but making it harder for the average person to get a house.
So who are these companies and why buy here?
"It was definitely a lot longer of an experience than I anticipated," said Tyler Ladner, a new homeowner.
Ladner recently bought a home Shelby County, but it wasn't easy. He made seven offers on different homes, often 10% to 20% above asking. But he kept losing out to investors.
"A lot of these investors were coming in and making all cash, no contingency offers. It's kind of hard to compete with that," said Ladner.
According to the Shelby County Property Assessors Office, of the 7,000 homes that were bought by investors and turned into rental properties in the past 2 years, Cerberus Capital Management out of New York purchased the most in Shelby County, at just over 1,400. The median appraised value of the houses they bought was just over $145,000.
According to its website, Cerberus Capital is an investment firm managing more than $55 billion assets. In its portfolio, it has more than 24,000 single family homes under management in 20 US markets.
Pretium Partners, also based in New York, bought more than 1,300 Shelby County homes. The median price just over $200,000. According to its website, it has 66,000 homes in 29 markets with a 96% occupancy rate.
Another group, American Homes for Rent, is a Real Estate Investment Trust out of California. According to the analysis, it bought 450 homes in Shelby County in the last 2 years. The median value was more than $213,000. According to the company's website it owns more than 50,000 homes in 22 states.
Some of the large LLC's that recently bought hundreds of homes in Shelby County are harder to track down, but the bottom line is there are big billion dollar firms buying up Memphis' housing market.
"For an investor, it's a dream," said Jay Bailey, Shelby County Property Assessor CAO."
Bailey said most of the homes purchased are inside the beltway, but sales have happened all over the county.
Bailey said not only is it squeezing out the typical buyer because they can't compete, Shelby County is losing money.
"Those investment companies don't pay commercial property taxes. They pay residential property taxes, I need to tell you that, so they are paying the same taxes my mother and grandmother pay," said Bailey.
Bailey said something needs to be done to stop the average buyer from being squeezed out of the market.
That's something Ladner understands,
"Where is the middle ground to where regular people have a place to live but you still allow people to invest or they want to choose, so it's tough."