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Note that "investors" in this case also includes massive pension funds. This isn't the type of entity that most people have in mind, but it's one of the most pe

by xenihn 5y ago

Note that "investors" in this case also includes massive pension funds. This isn't the type of entity that most people have in mind, but it's one of the most pervasive in California, especially in San Francisco. I think the average person thinks of individual investors (flippers, rich foreign buyers) when they hear "investors". Some of the buyers belong to this group, but most don't.

clpm4j 5y ago
Yes. See the Blackstone Group and its related investments in US residential housing. They reportedly made around $7 billion recently through one of their single-family and multifamily housing investment vehicles, which owns > 80,000 homes. Lots of other investment firms doing the same thing across the country. https://www.housingwire.com/articles/blackstone-gets-back-into-the-single-family-rental-game/ https://www.housingwire.com/articles/blackstone-gets-back-in...
- jhallenworld 5y ago
  I've been looking at REITs recently- "BREIT" is interesting in that it's not traded. According to them, the return rate is 10%, which is really good.. I don't understand how they are making this much off of rent in San Francisco. The price to rent ratio there is like 50:1, which implies a return of 2%. Perhaps their properties are charging much higher then average rents.. Detroit is the opposite extreme: the price to rent ratio is 5:1 (of course this ignores that the property is likely in terrible shape and the vacancy rate is high). So here is why I have been looking at this: how do the rich maintain their wealth during inflationary periods? Own hard assets that pay rent! Also the relatively stable return you can get from rent indicates how much money you need to retire. Suppose you want $100K a year during retirement. Well with 10% returns, you only need $1M.
riazrizvi 5y ago
Yes the funds are the worst IMO, they do the most damage to the stability of the market and they have the most political power because their $$$’s are concentrated.
- Red_Leaves_Flyy 5y ago
  Not only is the capital so concentrated, but any threats to these funds are direct threats to the retirement plans, pension funds, and investments of the politicians that serve us as well as their donors/supporters. Firms like balckrock can effectively strong arm Congress into doing whatever black rock damn well pleases because of the economic power they've been allowed to concentrate. Blackrock has $8.68 trillion AUM(2020), the 2019 US GDP was $21.4 trillion. What kind of damage could blackrock, entirely legally, do if they wanted? I'm not saying that BR is extorting anyone, but I'd be thoroughly surprised if BR doesn't have emotionless discussions with powerful people about all the terrible things that will happen if Congress does X or doesn't do Y, which can have the same effect as saying to act in a way or [bad thing] without coming across as Tony Soprano. https://www.bloomberg.com/quicktake/rent-wall-street-is-my-landlord https://www.bloomberg.com/quicktake/rent-wall-street-is-my-l... https://www.theatlantic.com/technology/archive/2019/02/single-family-landlords-wall-street/582394/ https://www.theatlantic.com/technology/archive/2019/02/singl...

by xenihn 5y ago

clpm4j 5y ago

Yes. See the Blackstone Group and its related investments in US residential housing. They reportedly made around $7 billion recently through one of their single-family and multifamily housing investment vehicles, which owns > 80,000 homes. Lots of other investment firms doing the same thing across the country. https://www.housingwire.com/articles/blackstone-gets-back-into-the-single-family-rental-game/ https://www.housingwire.com/articles/blackstone-gets-back-in...

jhallenworld 5y ago
I've been looking at REITs recently- "BREIT" is interesting in that it's not traded. According to them, the return rate is 10%, which is really good.. I don't understand how they are making this much off of rent in San Francisco. The price to rent ratio there is like 50:1, which implies a return of 2%. Perhaps their properties are charging much higher then average rents.. Detroit is the opposite extreme: the price to rent ratio is 5:1 (of course this ignores that the property is likely in terrible shape and the vacancy rate is high). So here is why I have been looking at this: how do the rich maintain their wealth during inflationary periods? Own hard assets that pay rent! Also the relatively stable return you can get from rent indicates how much money you need to retire. Suppose you want $100K a year during retirement. Well with 10% returns, you only need $1M.

riazrizvi 5y ago

Yes the funds are the worst IMO, they do the most damage to the stability of the market and they have the most political power because their $$$’s are concentrated.

Red_Leaves_Flyy 5y ago
Not only is the capital so concentrated, but any threats to these funds are direct threats to the retirement plans, pension funds, and investments of the politicians that serve us as well as their donors/supporters. Firms like balckrock can effectively strong arm Congress into doing whatever black rock damn well pleases because of the economic power they've been allowed to concentrate. Blackrock has $8.68 trillion AUM(2020), the 2019 US GDP was $21.4 trillion. What kind of damage could blackrock, entirely legally, do if they wanted? I'm not saying that BR is extorting anyone, but I'd be thoroughly surprised if BR doesn't have emotionless discussions with powerful people about all the terrible things that will happen if Congress does X or doesn't do Y, which can have the same effect as saying to act in a way or [bad thing] without coming across as Tony Soprano. https://www.bloomberg.com/quicktake/rent-wall-street-is-my-landlord https://www.bloomberg.com/quicktake/rent-wall-street-is-my-l... https://www.theatlantic.com/technology/archive/2019/02/single-family-landlords-wall-street/582394/ https://www.theatlantic.com/technology/archive/2019/02/singl...