Unlike the house-flipping frenzy of the real estate bubble, many real estate investors (comprising roughly a third of the buyer pool) acquire homes, fix them up and rent them out for a monthly profit. Companies like national francise HomeVestors and Chicago-based MACK Cos have popped up to offer passive investors a crack at the market, too. Typically these companies buy distressed single-family homes, fix them up and secure vetted renters. They then sell the rented property to individual investors and in many cases stay on to manage the property for a small cut of the monthly rental income. MACK Cos guarantees a positive cash flow for two years and, piggybacking on the alternative lending trend, will finance 60 percent of the purchase price with a five-year balloon mortgage.
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