WatchGet out before it is too late.
"Investors buying foreclosed U.S. homes might have less than two years to accumulate properties as competition and rising prices shrink the pool of cheap assets, according to Blackstone Group LP (BX), the largest buyer.
Blackstone, the world’s largest private-equity firm, has spent about $1.5 billion on 10,000 foreclosed properties in the U.S. this year, making it the biggest buyer of single-family homes in the country, Gray said. Blackstone has been buying $100 million of houses a week, Stephen Schwarzman, chairman of the New York-based firm, said during an Oct. 18 earnings call.
Thomas Barrack’s Colony Capital LLC, a private-equity firm, has bought about 5,500 homes since April, spending more than $500 million, and expects to reach $1.5 billion invested by the end of next year. Closely held Waypoint Homes has said it has bought about 2,500 homes and expects to have 10,000 homes by the end of next year.
Blackstone, Colony and other investors buying homes in bulk to rent have said they could create real estate investment trusts out of the properties to take public, paying dividends from the rental income on the homes, similar to the wave of apartment REITs such as Equity Residential (EQR) that went public in the early 1990s."
Follow
Befriend
31 threads
1,534 comments
Bellingham, WA
Premium
just shoot me!
Follow
Befriend (8)
38 threads
1,606 comments
Mountain View, CA
bmwman91's website
Premium
Fuuuuuuuuuuuuckkkkkk.
Everyone keeps snarkily saying that, "this won't end well for them." I think that "them" actually means all of us average people. The government is bought and paid for by the entities that will soon be our housing overlords. If you thought that HOAs were Satan's spawn, just wait for this shit to get into high gear.
Follow
Befriend (13)
104 threads
471 comments
Premium
Sounds to me as if this is a classic case of heads I win, tails you loose.
Follow
Befriend (2)
61 threads
1,336 comments
Premium
Bellingham Bill says
Wait til Blackstone package it as a public reit, paying dividends to the rich. Lol. A new category, residential reits --- non apartment. Can totally see this coming two years ago when Buffett said the same damn thing.
Follow
Befriend (23)
56 threads
4,081 comments
Scottsdale, AZ
robertoaribas's website
SFace says
What do you gentleman have against capitalism? Ingenuity of the market and all that?
I say great! let's drive Phoenix prices up till the rents fall in line with other markets, 5% or so net expenses!!! woohoo, more money for Rob!
Ok, not really, since I'm not selling anything...
Follow
Befriend
31 threads
1,534 comments
Bellingham, WA
Premium
robertoaribas says
That's just it, ya know.
Buying up existing wealth is not capitalism, it's a form of rentierism.
"Ground rents are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Ground rents are, therefore, perhaps a species of revenue which can best bear to have a peculiar tax imposed upon them." -- Adam Smith, father of Capitalism
Capitalism isn't just acquiring money, by that definition bank robbers are capitalists.
The wikipedia definition of capitalism is a good starting point here:
Capitalism is an economic system that is based on private ownership of the means of production and the creation of goods or services for profit.
I will admit that the construction of MFH can arguably be a form of capitalism. But the problem with all real estate income is that the bulk of its flows is not coming from the creation of goods or services, but the mere ownership of them.
Here we have the pathological -- end state rent-seeking really -- case of the already massively rich actively enslaving families by buying up existing houses -- the foundational element of the American Dream -- and then renting them out.
There is no new wealth creation going on here. Pure rent capture, and the bullshit of what our housing sector has devolved into is a MAJOR reason why things are so fucked now, why the 5% have all the money and the 95% are broke.
Before discovering Georgism I had no firm philosophical foundation to understand what was so wrong about our land economics, and natural resource economics for that matter.
Now I do.
Follow
Befriend (23)
56 threads
4,081 comments
Scottsdale, AZ
robertoaribas's website
it is always funny when someone with that limited a grasp of economic theory tries to act like they know what they are talking about!
A stock owner, or limited partner in a company doesn't do a damn thing either, just collect revenue stream from that means of production, and creation of goods and services... Yet, the modern stock company is the foundation of capitalism.
you sir, would toss one of the FUNDAMENTAL rights of property ownership away, the right to rent it. So, in your limited world view, you can own property while you use it, or immediatly sell it. nothing else.
Somebody better tell avis cars they are going to hell too, since they don't produce any goods or services, just make a rent off of them, after they "buy the wealth of cars..." after that we'll get the uhaul and penske truck companies too...
Please, take an advanced econ class someday, and write on this theme on every paper you write, so you can get all the F grades you deserve for it!
Follow
Befriend
31 threads
1,534 comments
Bellingham, WA
Premium
bmwman91 says
could go one of two ways. We get a return of the 1930s as we adopt austerity, higher taxes, whatever.
or we continue to abuse monetary policy to fluff up velocity with printing and whatever it takes to keep existing asset values from crashing and consumers consuming.
90% chance of the latter vs the former, unfortunately.
Follow
Befriend
31 threads
1,534 comments
Bellingham, WA
Premium
robertoaribas says
dude I've spent more than a decade studying this so kindly fuck you.
http://www.landvaluetax.org/current-affairs-comment/winston-churchill-said-it-all-better-then-we-can.html
HOW you make your money money is the question here, not the ownership structure.
Corporations CREATING new goods and services are capitalist in nature, even if they make insanely high profits.
Microsoft and Apple are good examples of these kinds of entities.
Weyerhaeuser, Standard Oil, and other resource companies are profiting from selling our own damn natural wealth back to us. This is a corrupted form of capitalism and what I'm on about.
robertoaribas says
cars are manufactured wealth and mobile. Supply is no problem, we're up to our eyes in supply. Housing is the exact opposite of all that -- land cannot be manufactured and everyone would like more land to live on than they have tenancy of now.
If landlords profited 100% from the value of the housing good proper (ie the fixed improvement), you would not be hearing a fucking peep from me.
but that is not how housing works. Houses are valuable because they provide living within a community, they capture the site value -- ground rent -- of the community.
The site value of a home is dependent on everything OUTSIDE the lot lines, so landlords are reaping what they did not sow.
Now, arguably, the act of construction of MFH is a valuable economy endeavor and I don't want to get into that here since it's not really germaine to the current topic of billionaires buying up SFHs to rent out.
Follow
Befriend (2)
61 threads
1,336 comments
Premium
robertoaribas says
Nothing, except:
The rules are so against certain people it is laughable. It's like college football sometimes when Alabama plays some state school at home so they can cream them 70-6 in front of 100K people. Nothing wrong with that but doesn't feel right.
2009-2011 was the perfect time to buy a house, guess what, they are handicapped, reeling, despair. I told my tenants to buy as it makes no sense to lease my house for 2,100 when a PITI with prime rate is something like 1,200. They have no money, credit or desire.
Follow
Befriend (8)
38 threads
1,606 comments
Mountain View, CA
bmwman91's website
Premium
Roberto, I think that Bill's post was more of a rant against financial mega-entities acquiring giant swaths of housing and renting them out. There is a very real danger of those same entities lobbying for the repeal of all renter protection laws and them subsequently becoming slumlords that actively destroy the American standard of living. I don't see landlording as anti-capitalistic. It's all a game, and if you play it well you make-out well. It becomes an issue when a player is able to re-write the game's rules and decimate all other participants for their own gain.
Follow
Befriend
31 threads
1,534 comments
Bellingham, WA
Premium
It's all the same thing whether it's done in ones or twos by tens of thousands of people or in the thousands by one or two parasitical entities.
The end result is tens of thousands of people -- the renters -- being financially enslaved by the rent-seekers.
The core problem here, as Churchill pointed out, is that land is the mother of all monopolies.
Each house enjoys a relative location monopoly. It is the only living place that can exist at that place in the community.
Car rental places are nothing like this. Cars are fungible, their supply is mobile, and the barrier of entry for competitors is minimal.
Iwog here will be the first to cackle about how he assembled a set of properties on one street, literally establishing a rental monopoly right out of the fucking boardgame.
All I can say is that I hope this bullshit will be educational and wake the american people up the economic cancer they've allowed to grow for the past 100-odd years.
Follow
Befriend (23)
56 threads
4,081 comments
Scottsdale, AZ
robertoaribas's website
Renter protection laws are actually very against tenants long term... Didn't even the People's Republic of Berkeley eventually move away from them? they completely destroy any incentive to build housing in the area... [By this I mean rent control, not code enforcement] Those stupid laws are the reason when I was at Cal, i couldn't rent a damn place in Berkeley, and rather after I moved out of the international house, I had to live way the F down in Oakland... Hmmm, meanwhile Tempe, where I have many of my homes, students can easily rent a place to live... there are zero restrictive laws, and lots of active investments in both condos and apartments, which keeps a lid on rents far better than rent control ever could.
BB: when I was at Cal, there was a crazy guy who handed out papers on his new theory of quantum physics... he too had studied it for 14 years, after he flunked out of undergraduate physics....Did you have a cousin there?
And by the way, there generally is a special rental tax: yep, that which you postulate could exist, already does exist, I write the checks each month to three separate cities here in Arizona, in which my rental properties are located.
Follow
Befriend (23)
56 threads
4,081 comments
Scottsdale, AZ
robertoaribas's website
Bellingham Bill says
Oh dear god of hyperbole!
Ok nitwitenomics 101: I can name a country where charging rent was made illegal, and much of my family escaped from it: Cuba. Go ahead, move your silly butt there, it would be your paradise!
Follow
Befriend
31 threads
1,534 comments
Bellingham, WA
Premium
my economics actually defend capitalism, while yours are just self-serving justifications for appropriating wealth.
legalized robbery really
The only reformer abroad in the world in my time who interested me in the least was Henry George, because his project did not contemplate prescription, but, on the contrary, would reduce it to almost zero. He was the only one of the lot who believed in freedom, or (as far as I could see) had any approximation to an intelligent idea of what freedom is, and of the economic prerequisites to attaining it....One is immensely tickled to see how things are coming out nowadays with reference to his doctrine, for George was in fact the best friend the capitalist ever had. He built up the most complete and most impregnable defense of the rights of capital that was ever constructed, and if the capitalists of his day had had sense enough to dig in behind it, their successors would not now be squirming under the merciless exactions which collectivism is laying on them, and which George would have no scruples whatever about describing as sheer highwaymanry.
--Albert J. Nock "Thoughts on Utopia"
http://geolib.com/essays/sullivan.dan/royallib.html
I do not propose you should not landlord, I only propose you reap what you sow.
Follow
Befriend (23)
56 threads
4,081 comments
Scottsdale, AZ
robertoaribas's website
oh hey, some tinfoil hat libertarian site! thanks for that! I'll read about it while I scan the sky on my homemade coke bottle and tinfoil telescope, searching for the imminent return of dark planet nirubi, which will lead to our demise next month:
http://www.librarising.com/space/darkstar.html
Follow
Befriend (8)
38 threads
1,606 comments
Mountain View, CA
bmwman91's website
Premium
robertoaribas says
Yeah, I was talking more about code enforcement, maintenance obligations, eviction requirements and landlord-entry restrictions. Rent control is a different beast entirely, and I would agree that it generally has more unintended detriments than intended benefits. If it was actually supposed to help folks on fixed incomes, it would be written very differently.
And Berkeley...oh lord. The place is no less nutty now. It's a veritable bastion of blind progressivism and all the ironies (some hilarious, some just plain sad) that come with that. Oh well, I can always count on good beer, pizza and live music at Jupiter when I am up there occasionally. I especially enjoyed the UCB Republicans Club's Racial Bake Sale. My GOD, the outcome and characters that showed up could not have been more predictable!
Follow
Befriend (31)
34 threads
2,612 comments
San Jose, CA
Premium
Bellingham Bill says
Knowing you. I just couldn't stop laughing from this comment. Too funny. My wife is curiously asking why I'm laughing.
robertoaribas says
That's freaking hilarious. If you give him time, he will lecture Georgism all day and all night long. :)
Thanks both for the debate. Too funny.
Follow
Befriend (31)
34 threads
2,612 comments
San Jose, CA
Premium
SFace says
How can you help someone who has no desire?
Follow
Befriend (31)
34 threads
2,612 comments
San Jose, CA
Premium
SFace says
I think you talked about this back in 2010. Iwog was vocal about it too. Who knows it has come to fruition.
Follow
Befriend (2)
61 threads
1,336 comments
Premium
E-man says
AZ Rob is definitely witty, and edgy. That's how blogs/forum should read, informational and entertaining. I'll model my tone after him.
Troy --- Georgism and land value tax is irrelevant, it is not happening here in your lifetime. If you spent a decade studying something equilvalent to the number of jupiter moons, you wasted your time. Sorry, I've never read past the first sentence whenever land value tax comes up.
It would be much more useful to find out what Obama, Bernanke and captalist like Buffet and Blackrock will do next.
Follow
Befriend
2 threads
9 comments
Surprise, AZ
Bellingham Bill says
Patrick should make this a bumper sticker too.
Follow
Befriend (13)
43 threads
322 comments
Pacifica, CA
Premium
Bellingham Bill says
Bellingham Bill says
I worry that corporations that are built on selling things to us that we don't need while destroying the natural resources on this planet are as problematic as the resource vendors.
I wonder how history will judge us 200, 300, 500 year from now.
Follow
Befriend (7)
30 threads
1,267 comments
31 male
Premium
Imagine the quality of the housing stock after a decade of this corp ownership hocking them as rentals. Coupled with the quality of the building materials and the "craftmanship"/labor used this past decade
I imagine it will be similar to buying a 3 yo Hyundai from Enterprise after they've run it thru the rental wringers
Follow
Befriend
31 threads
1,534 comments
Bellingham, WA
Premium
SFace says
"Second is Prop 13’s failure to distinguish between residential and commercial properties. At the moment all property values (and hence tax bills) are reassessed only when ownership is transferred. Many favour a “split roll”: annual reassessment of commercial property value, which in a rising market would mean higher revenues."
http://www.economist.com/news/united-states/21566672-passage-tax-measure-and-political-realignment-have-left-californias
Getting there. I consider this is a lifetime battle, and not one I expect to see over, no.
The forces of predatory wealth do in fact hold all the high cards here, and have immense economic leverage to fuck people over to protect their rent taps.
But if I can swing 2 people over to the Georgist side, my work is done, LOL
Follow
Befriend
636 comments
Bellingham Bill says
Large entities can afford to actually improve the structure and usually do because of spreading the costs out per unit, but lose in the property management cost. That versus an ownwer with limited resources to fix and/or repair a property. Plus, there are more man-hours in the upgrades too, and that money is usually paid and spent locally.
The renter does pay a higher rate by renting as opposed to actually owning the property for the use of those community resources, and when they no longer need to pay for those needed community resources, they can move to a lower cost area.
Follow
Befriend (3)
12 threads
600 comments
The three little pigs and the big bad wolf. Only one of three got to keep their house.
Follow
Befriend (3)
5 threads
185 comments
Did Churchill write that before property taxes were invented? I'm guessing he did.
Follow
Befriend
31 threads
1,534 comments
Bellingham, WA
Premium
Churchill back in his progressive days in the Liberal Dem party was talking about land value taxes, not the "property tax" as is understood today.
http://en.wikipedia.org/wiki/Land_value_tax
for the record, I HATE "property taxes" where we tax the improvements, especially new improvements. TOTALLY bass-akwards, taxing people who literally improve their properties.
I'd also exempt actual producer-owned productive property -- factories, warehouses, etc -- from the LVT, too. There's still plenty of tax base to go after, especially if we were to levy a progressive luxury tax on very high-value residential real estate. The first two miles from the coast in California is worth billions & billions -- at $2M/acre 500 miles of it values out at a cool trillion.
Follow
Befriend
31 threads
1,534 comments
Bellingham, WA
Premium
Oh man, I didn't know Stephen Moore was a crypto-Georgist:
"One of the greatest economists and social philosophers of the past two centuries was Henry George. The world would be a vastly better place if those in Congress and the media called a "time out" from the verbal grenade lobbing against the tax bill and became familiar with George's writings. Here is one of my favorite passages from George, dating back to 1879:
"I think you will agree that such wisdom, though over 100 years old, strikes at the heart of what is wrong with the debate in Congress of recent weeks."
http://www.cato.org/publications/commentary/how-fight-greedenvy-lobby
Follow
Befriend (23)
56 threads
4,081 comments
Scottsdale, AZ
robertoaribas's website
yes, keep quoting Churchill. Nobody else will. England brought him in for the war, and got rid of him just as quickly, because outside of galvanizing the country for the war effort, they recognized him as not a good leader in peacetime.
quote stephan moore too, because nobody who knows anything about economics will... he is the dumbass the crazy far right wing trot out, to do his Laffer curve dance and some more voodoo economics on policies that have never worked ever in history...
"Bullish on Bush: How the Ownership Society Will Make America Stronger." - yeah, there's some classic Stephen Moore... Hey how did that premise work out?
Follow
Befriend (23)
56 threads
4,081 comments
Scottsdale, AZ
robertoaribas's website
"In a spirited and compelling fashion, Bullish on Bush sets the record straight on the stunning success of President Bush's tax cut policies. It also provides the first comprehensive analysis of George W. Bush's bold second term economic agenda to create a broad-based Ownership Society in America and explains how Bush's tax relief policies have helped the economy grow, reversed the collapse in the stock market, and put America back to work. This book will make you Bullish on Bush, and Bullish on America!"
yeah, stephen moore... dats sum dern good ecunumical theories there!
Follow
Befriend (31)
34 threads
2,612 comments
San Jose, CA
Premium
Bellingham Bill says
That is such a small quest. I swear to god I'm having a hard time calling you Bill. I like your previous screen name.
Follow
Befriend (31)
34 threads
2,612 comments
San Jose, CA
Premium
Bellingham Bill says
Can we abolish it? That should make real estate go up uP, UP. LOL!!!
I feel so funny today.
Cheers.
Follow
Befriend (23)
56 threads
4,081 comments
Scottsdale, AZ
robertoaribas's website
Darrell In Phoenix says
nope, in the meantime real estate is going UP UP UP.
[see how ridiculous it is to merely state an opinion based on nothing?]
Follow
Befriend (23)
56 threads
4,081 comments
Scottsdale, AZ
robertoaribas's website
down
up
down
up
down
up
down
up
down
up
down
up
down
up
down
up
down
up
down
up
down
up
I'm going for a bikeride, so I'll just put both of our posts up for the next couple hours, and save us both the trouble...
[except, that I'm perfectly happy to link facts to mine, something dimwit is not able to do]