Without investor activity, we would not see price increases


By Patrick   Follow   Sat, 26 Jan 2013, 4:46pm   1,337 views   19 comments
In Menlo Park CA 94025   Watch (1)   Share   Quote   Permalink   Like (2)   Dislike  

http://www.vcstar.com/news/2013/jan/25/big-investment-firm-continues-to-buy-homes-in/

"Without the investor activity, we would not see the kind of price increases we're seeing right now," he said.

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  1. The Professor


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    1   6:46pm Sat 26 Jan 2013   Share   Quote   Permalink   Like (1)   Dislike (1)  

    "Invitation Homes has targeted Ventura County as one of 10 markets nationwide in which it has purchased more than 12,500 homes as part of business plan to become the nation's first large-scale, brand-name company in the single-family home rental market.

    Read more: http://www.vcstar.com/news/2013/jan/25/big-investment-firm-continues-to-buy-homes-in/#ixzz2J8ha1cus
    - vcstar.com "

    A new paradigm: brand name sfh rental.

  2. JodyChunder


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    2   7:45pm Sat 26 Jan 2013   Share   Quote   Permalink   Like (3)   Dislike  

    Patrick says

    "Without the investor activity, we would not see the kind of price increases we're seeing right now," he said.

    In all honesty, I think the word "investor" is bandied around too much. It's a shameless attempt to spiff-up what is market speculation, gambling, and finally, retail-level rentierism. Not that I judge, being a dirty speculator myself -- but let's quit with the trying to make it sound so respectable.

  3. inflection point


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    3   5:47pm Sun 27 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    Perhaps, time will tell.

  4. CaptainShuddup


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    4   5:55pm Sun 27 Jan 2013   Share   Quote   Permalink   Like   Dislike (1)  

    All I know is if this place gets anywhere near $500K I'm selling, and will rent a hotel room until the bubble pops again.

    Otherwise I'm ignoring this bubble altogether.

  5. Blurtman


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    5   6:23pm Sun 27 Jan 2013   Share   Quote   Permalink   Like (2)   Dislike  

    Brilliantly executed by the PTB. We all know that if the Invitation Homes strategy goes south, they will walk away from the debt, and be able to borrow again. But not so for individuals. Similar to HSBC money laundering. They can do it with a smack on the wrist, but you will go to jail for a long time. This is results in a type of arbitrage, designed by those who rule this country.

  6. Blurtman


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    6   9:05am Mon 28 Jan 2013   Share   Quote   Permalink   Like (1)   Dislike  

    The brilliance of the strategy is that due to destroyed credit ratings, many folks are forced to rent (and possibly for everyone's benefit). But RE developers, hedge funds and large investor groups can walk away from bad investments with impunity. So Wall Street can create a bubble, the little guy jumps in, gets in over his head (also his fault), defaults, has his credit rating destroyed, and now must rent from Wall Street.

    Dance, puppet, dance!

  7. PockyClipsNow


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    7   10:13am Mon 28 Jan 2013   Share   Quote   Permalink   Like (5)   Dislike  

    This is what zirp does. A 5% return on a SFR rental is considered awsome now.

  8. errc


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    8   10:30am Mon 28 Jan 2013   Share   Quote   Permalink   Like (1)   Dislike  

    At least we can breath a collective sigh of relief. Knowing that all the quality materials and craftsmanship that went into building the last twenty years of housing stock, coupled with corporations owning and maintaining with such care and preservation, will set us up for such a bright future. Can't you just smell the perpetual house price inflation! These shitshacks will all be worth bazillions within the next decade.

    Weeeeeeeeeeeeeeeeeee!!

  9. ELC


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    9   3:03pm Mon 28 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    JodyChunder says

    let's quit with the trying to make it sound so respectable.

    The moobs guy has got it right. Call them vultures.

  10. The Professor


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    10   7:25pm Mon 28 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    robertoaribas says

    "without investor activity... prices would fall"

    Yep.

    And without wings, a bat would fall to the ground too.

    So if investers are the wings who is the bat?

    Wait... I get it; the rising price of real estate is like a vampire on the working people and the investors are the wings keeping it flying. Otherwise "common" people could buy homes at less than double the PITI, and spend the rest of their money in our consumer economy.

    Are high housing costs (rent or PITI) a vampire on our economy?

  11. Bap33


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    11   7:32pm Mon 28 Jan 2013   Share   Quote   Permalink   Like (2)   Dislike  

    remove the Section 8 / Welfare that is pumped into the SFH rental market and the rents will drop low enough to bring housing in line in short order. My opinion.

  12. The Professor


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    12   7:37pm Mon 28 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    robertoaribas says

    your quote doesn't make any sense, whatever you buy the home is, that is your PITI

    It was a joke. A bad joke.

  13. David Losh


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    13   9:15am Tue 29 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    Bap33 says

    remove the Section 8 / Welfare that is pumped into the SFH rental market and the rents will drop

    A lot of people contend Section 8 keeps rents lower for a wide variety of reasons. Trashed properties, lower rents, surrounding price pressure on surrounding properties, and the like.

    Section 8 is a tough way to make a buck.

  14. David9


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    14   9:26am Tue 29 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    Thank You Patrick.

    I'm at work in Ventura this second, as I have been for 3 years.

    The only major employers in the area are the government, one hospital, and Amgen. Here is a list:

    http://www.labormarketinfo.edd.ca.gov/majorer/countymajorer.asp?CountyCode=000111

    I commute from Tarzana because I refuse to be away from the more populous business center of Los Angeles. Even the Java progammers say the area is 'not strategic'.

    But, house prices are up, up, up, expensive, expensive, expensive.

  15. Bap33


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    15   1:17pm Tue 29 Jan 2013   Share   Quote   Permalink   Like   Dislike (1)  

    David Losh says

    Bap33 says



    remove the Section 8 / Welfare that is pumped into the SFH rental market and the rents will drop


    A lot of people contend Section 8 keeps rents lower for a wide variety of reasons. Trashed properties, lower rents, surrounding price pressure on surrounding properties, and the like.


    Section 8 is a tough way to make a buck.

    All of the big RE players in my area use Section 8. And, the highest priced rents paid in the middle and low income areas are Section 8 properties. Worst of it all, in my opinion, is Section 8 rent in a SFH means tax payers are paying for an investors private property, that the investor can remove all of the equity from the home to use as he wishes, or even go into foreclosure due to unpaid mortgage. All done with an assett that has been paid for by tax payer funds.

    Maybe if the home has no mortgage, then allowing Section 8 may be a different deal. But, if a home is leveraged in a debt, then having tax payers pay the rent is just crap.
    To recap:
    1) Section 8 pays the highest rents in the low/middle SFH market in the central valley.
    2) In the central valley, every RE investor that has been picking up the stucco wrapped POS SFH use long term Section 8 (the one that pays for repairs to return the property to "as rented" condition)
    3) The rents being paid by Section 8 are 3X what an FHA mortgage would be on the same property
    4) In the central valley, Section 8 /HUD has started allowing their renters to "buy" homes ... I like that better, since the State gets to keep the home if it is never paid for by the Section 8 / HUD buyer.
    5) Section 8 has a direct effect on the rental market in much the same way any welfare used in any market effects the prices. Wage earners who compete for the goods or services being accessed by welfare will pay more due to a false competition. In my opinion, when rent money is handed over for free their is less motivation for the RENTER to find cheaper housing. They move in, the neighbors get tired of the crap and move out, Section 8 renters move into those newly vacant homes, and you now have the perfect seed for a ghetto full of rentals, instead of a subdivision full of owners.

  16. Mark D


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    16   3:20pm Tue 29 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    maybe so but without the real bottom we would not have seen investor activities :D

    the moment WallStreet jumps in is the moment you know the market has bottomed.

  17. inflection point


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    17   8:12pm Tue 29 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    Mark D,

    Sorry. ZIRP has driven wall street into any investment with a spread greater than their loan rate of 0. They will be just as quick to bail as soon as the market is on its way to the real bottom.

  18. Mick Russom


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    18   8:22pm Tue 29 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    This has all been covered. But it works like this. The boom bust cycles allow the banks to collect the real paper, the Titles.

    So for banks, who are too big to fail and get bailed out, they end up in an ultimate collapse scenario owning all the "paper". All the titles and deeds to all the properties everywhere is what ends up happening if they get it wrong, and if they get it right, they fleece the working folks of their entire standard of living.

    The banks are pan national - so no longer is the wealth even contained within a country.

  19. Mick Russom


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    19   8:23pm Tue 29 Jan 2013   Share   Quote   Permalink   Like   Dislike  

    And Yes, if there wasnt outside investment (more like illegal laundering of criminal money), this market wouldnt be in rebound.

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