Love affair is on the rocks?

Their love affair with traditional lenders is on the rocks, so some residential real estate developers have found a new partner: private equity.

More than 20 firms are looking to team up with homebuilders to go bargain shopping for distressed properties.

For developers, private equity firms bring much-needed cash. For investors, it’s a classic contrarian play, adding new homes to a market flooded with inventory. That would be a doomed strategy if pursued on a large scale, but analysts believe a few well-chosen projects could pay off.

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