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> you have to ask yourself why professionals with deep pockets aren't grabbing every property and driving prices up even further. But... they are. My Experie

by diydsp 4y ago

> you have to ask yourself why professionals with deep pockets aren't grabbing every property and driving prices up even further. But... they are. My Experience Ever heard of Grant Cardone? He and his ilk are filling my youtube algorithm with seminars on how to do this. I meet strangers on planes telling me about gathering together in clusters of partners and buying up real estate. Ads on the radio hawk house-flipping courses. Robert Kioysaki sells book teaching how to do this. With just a little bit of inherited wealth - and American wealth is 60% inherited - people are building multi-generational legacies. Research In Massachusetts: > In 2021, business entities purchased nearly 6,600 single-family homes across the state, more than 9 percent of all single-family homes sold. That’s nearly double the rate of such purchases a decade ago, according to a GBH News analysis of data provided by the Warren Group, a real estate data analysis firm. [0] In 2021: >corporate investors snapped up 15 percent of U.S. homes for sale in the first quarter of this year [1] In 2020: > a company called Treehouse Group was folded into Blackstone, then renamed in 2012, Invitation Homes was on a $10 billion spree, purchasing $150 million worth of houses per week. In 2022: > About 2.5 million households shopping for a first home will be shut out of the market this year, estimates Nadia Evangelou, senior economist with the National Association of Realtors. That amounts to 15 percent of all first-time home buyers. In an already daunting market, investor purchasing is adding to the obstacles. [3] > “The more that investors buy up entire communities and turn them into rental communities — people don’t have a choice anymore,” References [0] https://www.wgbh.org/news/local-news/2022/05/16/across-massachusetts-shrouded-corporations-are-scooping-up-single-family-homes https://www.wgbh.org/news/local-news/2022/05/16/across-massa... [1] https://slate.com/business/2021/06/blackrock-invitation-houses-investment-firms-real-estate.html https://slate.com/business/2021/06/blackrock-invitation-hous... [2] https://nypost.com/2020/07/18/corporations-are-buying-houses-robbing-families-of-american-dream/ https://nypost.com/2020/07/18/corporations-are-buying-houses... [3] https://www.nytimes.com/2022/04/23/us/corporate-real-estate-investors-housing-market.html https://www.nytimes.com/2022/04/23/us/corporate-real-estate-...

throwaway908724 4y ago
> Ever heard of Grant Cardone? He and his ilk are filling my youtube algorithm with seminars on how to do this. I meet strangers on planes telling me about gathering together in clusters of partners and buying up real estate. Ads on the radio hawk house-flipping courses. Robert Kioysaki sells book teaching how to do this. In those cases the professionals are making money using people's dreams of becoming wealthy to sell books and seminars. Learn the One Simple Trick to turn your high salary into lasting wealth that Wall Street doesn't want you to know. In the cases you cited where corporations are buying homes, yeah, there are firms that do a lot of quantitative research and forecasting and identify homes that they think are underpriced according to their rental value, ignoring the vast majority of properties on the market. If you're in a community they've identified as being underpriced, I guess it can look like they're buying up the whole world, but it's a selective strategy, completely different from the blanket assumption that property is an easy doorway to wealth and riches. As one of those articles notes, they don't compete against "wealthy boomers and the nation’s finance and tech bros," because we're willing to pay silly prices for property. They buy in neighborhoods where people like us aren't looking.
- rhacker 4y ago
  Those professionals may be making money on the books and seminars, but those books and seminars have been sold to people that are snapping up homes for investment, don't play dumb about that.
xenadu02 4y ago
Yeah but part of what throwaway908724 says is absolutely true: There are a lot of naive newbies _and_ investors buying up property right now without a viable plan to ever make money on that property. This in turn drives up prices for both potential owners and "reasonable" landlords, then by extension for renters both because potential owners continue renting reducing supply and landlords need higher rent to break even let alone profit. The worst is when investors stop maintenance on the property, it begins to deteriorate, then they write it off and bail. That turns what could have been a rehabilitation by a competent investor into a tear-down. More than a few apartment buildings are being ruined by this sort of thing, evicting all the tenants in the process.

by diydsp 4y ago

throwaway908724 4y ago

> Ever heard of Grant Cardone? He and his ilk are filling my youtube algorithm with seminars on how to do this. I meet strangers on planes telling me about gathering together in clusters of partners and buying up real estate. Ads on the radio hawk house-flipping courses. Robert Kioysaki sells book teaching how to do this. In those cases the professionals are making money using people's dreams of becoming wealthy to sell books and seminars. Learn the One Simple Trick to turn your high salary into lasting wealth that Wall Street doesn't want you to know. In the cases you cited where corporations are buying homes, yeah, there are firms that do a lot of quantitative research and forecasting and identify homes that they think are underpriced according to their rental value, ignoring the vast majority of properties on the market. If you're in a community they've identified as being underpriced, I guess it can look like they're buying up the whole world, but it's a selective strategy, completely different from the blanket assumption that property is an easy doorway to wealth and riches. As one of those articles notes, they don't compete against "wealthy boomers and the nation’s finance and tech bros," because we're willing to pay silly prices for property. They buy in neighborhoods where people like us aren't looking.

rhacker 4y ago
Those professionals may be making money on the books and seminars, but those books and seminars have been sold to people that are snapping up homes for investment, don't play dumb about that.

xenadu02 4y ago

Yeah but part of what throwaway908724 says is absolutely true: There are a lot of naive newbies _and_ investors buying up property right now without a viable plan to ever make money on that property. This in turn drives up prices for both potential owners and "reasonable" landlords, then by extension for renters both because potential owners continue renting reducing supply and landlords need higher rent to break even let alone profit. The worst is when investors stop maintenance on the property, it begins to deteriorate, then they write it off and bail. That turns what could have been a rehabilitation by a competent investor into a tear-down. More than a few apartment buildings are being ruined by this sort of thing, evicting all the tenants in the process.