Goldman Backs Mullen in Rentals After Subprime Short - Bloomberg

Goldman Backs Mullen in Rentals After Subprime Short - Bloomberg

Mullen, 54, has raised almost $1 billion to buy single- family houses to rent since leaving Goldman Sachs last year as head of global credit and mortgages, five years after overseeing the bank’s bet against the imploding subprime home-loan market. His Fundamental REO LLC has already purchased or is close to acquiring almost 2,500 properties through foreclosure auctions, government agencies and even an Arizona non-profit that promotes affordable-home ownership, property records show.
Mullen plans to spend as much as $2 billion by 2016, joining private-equity giants including Blackstone Group LP (BX) and Colony Capital LLC seeking to take advantage of home prices 29 percent below the 2006 peak and rising demand for rentals from Americans blocked out of homeownership. Investors, including former bankers and bond traders, are rushing to buy and renovate properties, as well as secure Wall Street funding to turn what’s been a mom and pop business into an institutional asset class.