Originally Posted by TheSquealer

We have been trying to figure something out and no one really has a good answer. Maybe you have an idea....

My GF is a broker and she has a contract with a very large institutional investor to buy up as many homes as possible in a very large city for almost a year. Basically the day they are listed, they run them through the formula and make a cash offer within hours. They all ended up being around 80-150k range and the whole point was this company was then leasing them out. So in one city alone, I know they bought over 1000 homes. Just managing 1-2-3-4 houses with tenants as you might know is a fucking nightmare, particularly when you are dealing with tenants in that price range (800-1200/mo). Maintenance costs are going to be huge. Late rent/evictions are going to be high etc. They are not buying any multi-family stuff at all.. which of course, has much better economics once you get past say 20-30 units.

They also make these houses available to Section 8 tenants which is in itself, completely retarded. Even more so on a huge scale. Anyone thats ever rented multiple units, knows this.

I could never determine if they were insanely stupid, naive or if there was some specific program, maybe in the stimulus bills that incentivized this. Maybe as part of a tax strategy for a multi-billion dollar mutual fund? The sheer numbers of homes purchased as you can guess, quickly righted the market and heated it up. Local news always reports how hot the housing market is hot etc... but they never report on the fact that 2 large companies are literally pumping 9/10 figures into the market, snatching up everything in this price range.

I dont see an exit strategy for them as they are buying properties in places that largely are not going to appreciate over time. (in many of the cities they are doing this) and ultimately they are all going to get trashed. I can't imagine how they will get out of them by selling bulk deals unless they plan to sell at a loss.

Do you have any clue why they would be doing that? Owning 10,000+ single family rental properties across multiple states makes no sense at all to me.

Its also really weird to watch. Entire neighborhoods are now 100% fucked. They literally bought every property that came on the market and turned them into rentals - even worse, renting them to Section 8 tenants... basically turned entire large neighborhoods from little old ladies who recently passed away to ghettos.