ALL CASH BUYER INVESTORS ARE BUYING UP HOMES

CNBC Takes note of the REITs ( Real Estate Investment Trusts) currently buying up all the single family homes available,spiking prices via demand: By: Diana Olick CNBC Real Estate Reporter Three years ago Aaron Edelheit was working out of his living room, buying foreclosed properties, and putting them up for rent. Today he is CEO of The American Home Real Estate Investment Trust, one of the first REITs investing only in single family rental homes.

"We think the foreclosure crisis has allowed a couple of firms such as ours to get size and scale to start institutionalizing a very large market," said Edelheit.

The single family rental market was large even before the housing crash, with sixteen million homes designated as rentals in 2010, according to the U.S. Census. Add to that at least five million foreclosures, many of which will become investor-owned rentals, and the enormous scale is apparent. "By some accounts, $6-9 billion has been raised or committed, suggesting potential acquisitions of 40,000-90,000 properties," according to Jade Rahmani, an analyst at KBW, who pointed out that this amounts to around 15 percent of unsold bank-owned, so-called REO (real estate owned), homes. "We expect the REO-to-rental market to experience robust growth over the next 12-24 months, potentially emerging as an institutional asset class." To see that growth, look no further than Edelheit's brand new Atlanta office space, where he now employs 150 workers full-time and hundreds more part-time. His REIT owns close to 2000 properties in Georgia, North Carolina and Florida, and they are buying more every day.

"We outgrew the last space as soon as we had moved in," said Edelheit as he weaves through a maze of desks, followed by his panting dog Frankie, to get to his office. There he shows off his stand-up computer work station that he fabricated out of a small shelf from Ikea. Many of his mostly-young employees stand as well, as they search for homes to buy, rent, market, and manage. The energy is palpable. "In terms of risk and reward, I feel that this is a generational opportunity," Edelheit noted. Two similar REITs, Silver Bay Realty Trust and Altisource Residential just went public in December 2012. Analysts at KBW estimate cash returns on investments in REOs are in the 5-7 percent range, while total returns could reach 15-20 percent. ----------------------------------------------------------------------------------------------------------- What this means to you as a homebuyer: Yes the landscape has changed again. Your competition is an all cash buyer without emotion. You need to make yourself as strong a profile as possible,and be prepared for overbidding. This is not a bubble. It's what happens when big dollars chase too few assets.