Posted on 09/22/2012 11:52:31 AM PDT by ruralvoter
A Wall Street behemoth plans to spend $1 billion on Tampa Bay's hobbled housing market, dispatching teams of brokers to scour neighborhoods and buy hundreds of homes a month.
But rather than resell the homes, the Blackstone Group is opting to become a landlord, renting the homes to tenants including foreclosed ex-homeowners burned by the housing crash.
Blackstone, one of the nation's largest private-equity firms, plans to buy as many as 15,000 homes in Tampa Bay over the next three years, many of them foreclosures, capitalizing on decimated home prices and growing rents.
The shopping spree, and those of half a dozen other big investment firms and hedge funds, could radically change the local home landscape, as big-money brokers compete with first-time buyers and mom-and-pop landlords over homes in tight supply.
"It's a land grab unlike anything we've ever seen," said Peter Murphy, CEO of Home Encounter, the largest manager of rental homes in Tampa Bay. "You're going to drive through parts of town and all of it is going to be institutionally owned."
(Excerpt) Read more at tampabay.com ...
The numbers don’t add up. This is a sham to boost RE numbers in Florida to save Obama’s Presidency. 15000 homes at $100K each totals $1.5 billion. If they buy at their “sweet spot” of $150K it’s $2.25 billion.
Blackstone is a little short if they think they’ll pick up properties for $66K.
A billion dollars worth of Tampa Bay homes? Cool! That would be two with an ocean view and one more without.
How are stable neighborhoods going to development from renter neighborhoods owned by absent investors?
I don’t see it as being sinister, its just that there aren’t a lot of money making options right now. Buying homes presumably at the bottom and renting them is a decent way to make money.
This would give them a better return than mortgages, which are at historic lows. If the interest rate picks up, then they can sell them off, doing the financing themselves.
Not in Tampa bay .
Blackstone has been takin Wachovia lessons.
This can’t end well for them.
Anyway, that's not what the article is about.
Now, local good citizens owning a few rental properties for investment value is good. They make sure the neighborhoods stay good.
However, giant corporate robber barons rot the heart out of neighborhoods and destroy the economy. We learned nothing from the last decade.
Having properties occupied by renters is preferable to having foreclosure properties stand vacant, so in the short run this rental scheme will itself bring some stability.
And you can be sure this is only a short term idea because Blackstone needs to cash out and repay its investors in the not so distant futures. They are a buyout firm...they need an exit strategy.
This won’t get off the drawing board before the election.
If there were ever a low risk investment on the planet...this wasn't it. I have a friend with two nice homes for rent in gated communities (One on the beach no less.) The market is over-saturated. Jobs are real scarce in Florida.
ping
IMHO, and with all due respect to Tampa, owning 15,000 homes in an area subject to the whims of nature regarding a hurricane does not make good investment sense to me.
I agree with donna in #10 above, "Renters destroy neighborhoods."
BTW, Are these homes under water? I can't find the city of Tampa Bay on my map.
I did, the better half's late Grandma had a place, it was sold, I am aware of the market slide their in values, and no "family-member" has owned something their for a while. I was unaware of the Jobs issue, but aware of the crime in certain parts of town.
But it didn't pass my smell test as an investment to me, and my last sentence in my original post is my jaundice eye to the idea showing...
That’s the optimistic assumption. There are no doubt other means of wringing every red cent out of it and if history is any guide, they’ll do it. In my opinion, if it’s more profitable to go section 8 they will, if it’s more profitable to pack them all twenty to a house with “undocumented workers” they will, if it’s more profitable to scavenge bits and pieces of the structures, raze what’s left and put in parking lots, they will. Obviously, I don’t have a very high opinion of them. Maybe they’ll surprise me with their altruism. Maybe monkeys will fly out of their butts. Who knows?
You’re right about one thing though. They are not focused on the long term.
Probably intentional. Get the votes and then back out of the deal after the election. [/cynicalism ]
Doesnt sound like Tampa is a good place to buy a home
Might find yourself in the middle of a new obamaville, owned by one of his bundlers and with govt subsidies to govt dependent people who will camp there for generations to come
I live in Tampa...bump for later...
I think it will decimate prices
Given what obamaville plans lie ahead for these modest neighborhhods, I would NEVER buy a modest home in Tampa
LOL...no, they didn't make their money being altruistic. But capitalism done right is sometimes a good thing.
Lease/purchase, the fraudsters legal way to steal money from the low income, young, and naive.
Purchaser gets behind, the property is taken back and lease/purchased to the next sucker.
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