6 ms·

All the companies that tried this failed spectacularly and closed up shop. Even with "free" money.

by cragfar 4y ago

coding123 4y ago
But what if one succeeds (or is but you don't know about it)?
- uoaei 4y ago
  Yeah, and what if they gave away houses out of the goodness of their hearts? What-if games don't provide great insights in cases like these. Trust me, if it worked at these scales, you'd hear about it.
  - ABCLAW 4y ago
    There are plenty of REITs operating in my city that have substantial detached residential holdings. The EV on renting and holding substantially improves if the housing market takes off like a rocket. It might not work in your market, but that doesn't mean it doesn't exist.
    - uoaei 4y ago
      Wild speculation and hypothesis doesn't mean it exists, either.
      - ABCLAW 4y ago
        It's not a hypothesis. You don't need to believe it exists and it may be less common in your market. I know this is true firsthand as in the course of my work, I review the financial and legal side of these entities at times.
oldstrangers 4y ago
Open Door alone owns like 600 homes where I live. Black Rock owns entire subdivisions and communities. Not sure what you mean.
- cragfar 4y ago
  Open Door has laid off 20% of it's work force, it's stock has gone from $24 to $1.5 in a year, and it's losses are increasing. Black Rock was buying entire subdivisions developed for the purpose of being sold to investors. They were basically large scale apartment complexes. That's wildly different than buying up random homes throughout a city. Zillow had to give up last year and showed a $300 million loss, and now Redfin is too. I'm not saying it's impossible, but SFH flipping doesn't scale well at all.
  - oldstrangers 4y ago
    I still dont know what you're talking about or if you're just unaware of the data. "Locally, NAR data showed 38% of single-family properties purchased in Harris County in 2021 were bought by institutional investors. Property data from the Harris County Appraisal District shows nearly 7,000 homes in Harris County as of June are owned by five NRHC members and their subsidiaries." https://communityimpact.com/houston/bay-area/city-county/2022/07/08/increasing-investor-purchases-of-single-family-homes-contributing-to-rise-in-rentals-across-houston/ https://communityimpact.com/houston/bay-area/city-county/202...
    - cragfar 4y ago
      >Citing NRHC member-provided data, Howard said that out of 23 million single-family rental homes in the U.S., only about 300,000, or 1.3%, are owned by large companies. NRHC includes the aforementioned Blackrock. Your quote says the top 5 SFH companies own 7,000 homes in Harris County. A county with 1.6 million homes. The sexy headline of 28% of all homes being bought by institutional investors says an LLC is an institutional buyer. It wasn't Blackrock hoovering up all these homes, it was smaller shops and normal people flush with cash and leverage.
      - oldstrangers 4y ago
        Your idea of "normal people flush with cash" is ... private equity lol. It's incredibly common for companies to spin off random LLCs to buy up whatever they want.

All the companies that tried this failed spectacularly and closed up shop. Even with "free" money.

coding123 4y ago

But what if one succeeds (or is but you don't know about it)?

uoaei 4y ago
Yeah, and what if they gave away houses out of the goodness of their hearts? What-if games don't provide great insights in cases like these. Trust me, if it worked at these scales, you'd hear about it.
- ABCLAW 4y ago
  There are plenty of REITs operating in my city that have substantial detached residential holdings. The EV on renting and holding substantially improves if the housing market takes off like a rocket. It might not work in your market, but that doesn't mean it doesn't exist.
  - uoaei 4y ago
    Wild speculation and hypothesis doesn't mean it exists, either.
    - ABCLAW 4y ago
      It's not a hypothesis. You don't need to believe it exists and it may be less common in your market. I know this is true firsthand as in the course of my work, I review the financial and legal side of these entities at times.

oldstrangers 4y ago

Open Door alone owns like 600 homes where I live. Black Rock owns entire subdivisions and communities. Not sure what you mean.

cragfar 4y ago
Open Door has laid off 20% of it's work force, it's stock has gone from $24 to $1.5 in a year, and it's losses are increasing. Black Rock was buying entire subdivisions developed for the purpose of being sold to investors. They were basically large scale apartment complexes. That's wildly different than buying up random homes throughout a city. Zillow had to give up last year and showed a $300 million loss, and now Redfin is too. I'm not saying it's impossible, but SFH flipping doesn't scale well at all.
- oldstrangers 4y ago
  I still dont know what you're talking about or if you're just unaware of the data. "Locally, NAR data showed 38% of single-family properties purchased in Harris County in 2021 were bought by institutional investors. Property data from the Harris County Appraisal District shows nearly 7,000 homes in Harris County as of June are owned by five NRHC members and their subsidiaries." https://communityimpact.com/houston/bay-area/city-county/2022/07/08/increasing-investor-purchases-of-single-family-homes-contributing-to-rise-in-rentals-across-houston/ https://communityimpact.com/houston/bay-area/city-county/202...
  - cragfar 4y ago
    >Citing NRHC member-provided data, Howard said that out of 23 million single-family rental homes in the U.S., only about 300,000, or 1.3%, are owned by large companies. NRHC includes the aforementioned Blackrock. Your quote says the top 5 SFH companies own 7,000 homes in Harris County. A county with 1.6 million homes. The sexy headline of 28% of all homes being bought by institutional investors says an LLC is an institutional buyer. It wasn't Blackrock hoovering up all these homes, it was smaller shops and normal people flush with cash and leverage.
    - oldstrangers 4y ago
      Your idea of "normal people flush with cash" is ... private equity lol. It's incredibly common for companies to spin off random LLCs to buy up whatever they want.