Colony American Homes Inc., a division of Thomas Barrack Jr.’s Colony Capital LLC with 13,000 homes, has found tenants for only about half of its properties, according to a regulatory filing last month.

Jonathan Gray, Blackstone’s global head of real estate, said last month during a conference call with investors that while about 85 percent of the firm’s renovated homes were leased they have “an awful lot of homes to continue renovating.”

Purchases by investors, including individuals, declined to 20 percent of sales in May, from 22 percent in April, as home prices rose and competition increased, according to the Campbell/Inside Mortgage Finance HousingPulse Tracking survey released today.

Rising Prices

Sylvan Road spends on average $30,000 to $40,000 to repair homes. American Homes 4 Rent spent about 5 percent or $8,762 per house on renovation and acquisition fees, while American Residential Properties Inc., a Scottsdale, Arizona-based single- family real estate investment trust, invested an average $4,222 per house on capital improvements, regulatory filings show.

“Because we are trying to add value through renovations, a lot of the times we are buying houses that nobody else will buy,” Chang said. “When we put an offer on it we’re the only ones, and it’s a house that is typically in the condition that nobody wants to live in it either. In some cases it’s falling apart and basically uninhabitable. We’ll take that and fix it up and if we do this for several houses within a neighborhood, it’s helping improve that community.”

Even though Chang’s expertise is in analyzing data, starting as a summer associate with Morgan Stanley while he was still at Columbia Business School in 2004, his first experience into being a landlord came as a youth in Toronto. His parents owned a few investment homes that they rented out and often recruited him to help tidy up between tenants.

Giant Weed

“One resident didn’t take care of the lawn,” Chang said. “I was around 10 years old, and I remember there was a weed that was as big as I was tall, and it took me about two hours to get it out of the ground. And what stuck with me, even when I first started writing about this at Morgan Stanley, is just how difficult it is to manage these properties.”

Sylvan Road houses come with an electric lawnmower, because many renters want their children to cut the grass as a chore, Chang said.