Lucille
01-09-2013, 04:54 PM
It's how fascism rolls.
Guest Post: America Meet Your New Slumlord: Wall Street
http://www.zerohedge.com/news/2013-01-09/guest-post-america-meet-your-new-slumlord-wall-street
Well they aren’t really your “new” slumlord in the sense you have been debt slaves to the financials system for decades. What I really mean is that it is now becoming overt and literal. Literal because financiers are now the main players in the real estate market and are buying all the homes ordinary citizens were kicked out of over the past few years. Yep, we bailed out the financial system so that financiers with access to cheap credit can buy up all of America’s real estate so that they can then rent it back to you later.
Of course, my opinion is that this will ultimately backfire on all the private equity buyers once they find out multiple generations will start living together and a weak economy will not provide the rental income they envision going forward. Particularly once we have another severe slowdown…which always happens eventually. Incredibly, Blackstone has spent $1.5 billion to buy homes in the last 2-3 months alone!
[...]
Of course the market is improving. Not because citizens are buying, but because financiers with access to cheap credit are in a bidding war to become America’s slumlords.
The firm, along with Thomas Barrack’s Colony Capital LLC and Two Harbors Investment Corp., is seeking to transform a market dominated by small investors into a new institutional asset class that JPMorgan Chase & Co. estimates could be worth as much as $1.5 trillion.
No more small banks, only mega banks. No more small real estate investors, only mega real estate investors. Get the joke?
It’s bought so quickly it’s “warehousing” more than half of the homes it’s acquired as it completes the purchase and hires staff and contractors to renovate and rent the properties, Gray said. It takes about 30 days to fix each home and then as much as 30 days to lease the property, he said.
“While leverage is currently limited, potential financing options include secured credit lines, lending syndicates, high- yield debt, government sponsored enterprise-provided financing, and securitization,” Jade Rahmani, an analyst with Keefe, Bruyette & Woods Inc. in New York, wrote in a note yesterday.
In the case of the single-family business, Blackstone will rent and manage the homes through Invitation Homes, which it founded last year with Riverstone Residential Group, an apartment management company based in Dallas.
Oh and so next time you go to rent a home or apartment and the leasing company is called “Invitation Homes” don’t be fooled. It is actually Blackstone; your Wall Street slumlord.
Full article here.
Guest Post: America Meet Your New Slumlord: Wall Street
http://www.zerohedge.com/news/2013-01-09/guest-post-america-meet-your-new-slumlord-wall-street
Well they aren’t really your “new” slumlord in the sense you have been debt slaves to the financials system for decades. What I really mean is that it is now becoming overt and literal. Literal because financiers are now the main players in the real estate market and are buying all the homes ordinary citizens were kicked out of over the past few years. Yep, we bailed out the financial system so that financiers with access to cheap credit can buy up all of America’s real estate so that they can then rent it back to you later.
Of course, my opinion is that this will ultimately backfire on all the private equity buyers once they find out multiple generations will start living together and a weak economy will not provide the rental income they envision going forward. Particularly once we have another severe slowdown…which always happens eventually. Incredibly, Blackstone has spent $1.5 billion to buy homes in the last 2-3 months alone!
[...]
Of course the market is improving. Not because citizens are buying, but because financiers with access to cheap credit are in a bidding war to become America’s slumlords.
The firm, along with Thomas Barrack’s Colony Capital LLC and Two Harbors Investment Corp., is seeking to transform a market dominated by small investors into a new institutional asset class that JPMorgan Chase & Co. estimates could be worth as much as $1.5 trillion.
No more small banks, only mega banks. No more small real estate investors, only mega real estate investors. Get the joke?
It’s bought so quickly it’s “warehousing” more than half of the homes it’s acquired as it completes the purchase and hires staff and contractors to renovate and rent the properties, Gray said. It takes about 30 days to fix each home and then as much as 30 days to lease the property, he said.
“While leverage is currently limited, potential financing options include secured credit lines, lending syndicates, high- yield debt, government sponsored enterprise-provided financing, and securitization,” Jade Rahmani, an analyst with Keefe, Bruyette & Woods Inc. in New York, wrote in a note yesterday.
In the case of the single-family business, Blackstone will rent and manage the homes through Invitation Homes, which it founded last year with Riverstone Residential Group, an apartment management company based in Dallas.
Oh and so next time you go to rent a home or apartment and the leasing company is called “Invitation Homes” don’t be fooled. It is actually Blackstone; your Wall Street slumlord.
Full article here.