Ryan CadwellManaging Partner @ Resolute RDM | CCIM® | CPM®

Why Some Investors Buy the Debt Instead of the Property #RealEstateInvesting

28 Jul 2026 · 1 min

Watch on YouTube

0:46

In this segment, the speaker explains a recent shift among large institutional investors, exemplified by BlackRock, from purchasing single‑family rental (SFR) equity to acquiring distressed commercial debt. After exiting its SFR portfolio and building cash reserves, BlackRock began buying loan notes directly, effectively cutting out equity holders and planning to take ownership through foreclosure. The speaker characterizes this as a broader market wave that emerged between 2022 and 2024, where investors prefer the simplicity and upside of owning the note rather than navigating equity structures. The key takeaway is that this debt‑first strategy is now an established play that savvy investors deploy when market conditions present distressed loan opportunities.

Chapters

I think one of the things that didn't totally surprise me, but if you were watching BlackRock, they were exiting last year out of their big SFR portfolio. They were building up cash and then they went through some fundraisers. And then this year everybody was expecting more people to start buying that commercial asset, the distressed stuff. And instead of buying them, they're just going straight for the loans. They're just cutting equity straight out. I think once I saw that, I was like, okay, this was really the wave that was being created between '22 and '24 is somebody coming in and just saying, Well, I don't really want to deal with all the equity people. I'll just buy the note when we foreclose and we've got the asset. So just keeping in mind that that strategy is out there and that there are people that know about it, use it, and they just use it when the market presents the opportunity.