Buying a foreclosed single family home, renovate the home, and rent it out to bring in monthly income. That sounds great to me, but unfortunately I cannot hang a picture correctly. The other issue is the amount of money you must have to get started initially. And assuming you have that money, it could be tied up for years.
So how can we profit from this strategy without laying out large amounts of money and/or learning how to rip down walls.
Let me introduce you to Silver Bay Trust ($SBY). The company was recently spun off from Two Harbors ($TWO) and owns thousands of single family homes and it rents out about 80% of the homes in an effort to generate rental income. Along with income there is the potential for capital appreciation of the homes.
The stock began trading in mid-December and is expected to register as a REIT, which will force it to distribute the majority of its income to shareholders. If this is the case I would expect $SBY to pay an above-average dividend.
More to come on $SBY in the future and if any clients or newsletter subscribers have questions on $SBY feel free to email me at info@pennfinancialgroup.com.
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