re: Trump to take steps to ban institutional investors from buying up single family homes

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What is the IRR of holding rental properties like these?

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High enough for them to keep buying them

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Whether that is for rent or for sale, it still CONTRIBUTES to the SOLUTION of the underlying problem of a nationwide shortage of homes.

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Not really

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you mean the pretzel of capitalism. now pretzel yourself into explaining how you aren't a socialist.

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100% pure, lawless capitalism is bad for most Americans.
100% pure socialism is bad for most Americans.

We have 200 years of laws trying to thread the needle, some get it right & some dont.

There, I didn't even have to touch my toes

Wow

Amazing if it works

They are a massive lobby so I'm not sure how he's getting around that with congress.

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How is financing new housing supply a bad thing? Even if they're rentals more supply is more supply and subject to the same market forces all housing is.

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Not an expert, but I'd imagine there's a certain threshold where the benefits of BlackRock/Stone are outweighed by the risks of having a market so concentrated into one or a few players.

I mean antitrust laws didn't just appear out of thin air

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How is financing new housing supply a bad thing? Even if they're rentals more supply is more supply and subject to the same market forces all housing is.

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The real issue is the acquisition of existing homes, you're right.

They need a way to limit it to 10-20 homes per parent entity. I'm not against local entrepreneurs from investing in several homes. . You can trace back LLCs to Blackstone, as they do use those in most cases to buy the single family homes I believe. They can't really force a sale of ones they've already bought logistically, but can stop them from buying more.

Only way to get them to SELL them would be something like rent control to kill their profits which is just a fricking mess. Or maybe say they have to divest current inventory over 20-30 years. Or I guess could say sell them within 5-10 years at FMV.

There would have to be language for people who own homes that don’t earn income from them as well (rich people with lots of houses). That’s not the issue.


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This whole thing will be messy and extremely political because of the lobby these big firms have. Not sure how Trump can get it done.

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The big question will be where to you draw the line on fractional ownership by institutional lenders in companies that own and operate rental properties?

For example, Blackstone rarely directly invests. They invest in subsidiary companies or joint ventures and provide working capital. So technically, that company isn't an institutional lender. How do you classify a small company that has a warehouse with JP Morgan?

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I think you just did. Law that says they cannot invest or have ownership in single family home businesses through any avenue (with a very small limit like 10-20 homes). It would be complicated with their mortgage business, granted.

Selling current inventory would get very messy and don't think achievable, but you can stop the bleeding.

Can’t wait for private equity boot kickers to tell us how this is actually going to be bad for homebuyers.

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I think you just did. Law that says they cannot invest or have ownership in single family home businesses through any avenue (with a very small limit like 10-20 homes). It would be complicated with their mortgage business, granted.

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It solves the problem for companies that are wholly or majority owned subsidiaries. But what about a small company that needs some cash and wants to put up a 10% stake for some growth capital? Are they stuck doing friends and family capital raises now because they're boxed out and can't go ask Bank of America who they bank with? it's complicated because the majors either directly or indirectly provide the vast majority of the liquidity needed for companies to operate.