Wall Street Landlords Taking HUGE LOSSES. Forced Liquidations Coming.



Wall Street Investors are beginning to liquidate their Real Estate Holdings. Yet another sign of the 2022 Housing Crash.

Real Estate Investors took over the US Housing Market in 2021. But so far in 2022 they have been buying significantly fewer homes according to data from Redfin.

The decline in Investor activity, particularly from Corporate Wall Street Landlords, is likely due to 1) Higher Interest/Mortgage Rates and 2) Declining Profitability of Real Estate.

REDFIN INVESTOR DATA:
Click the “Investor Share by Zip Code” tab to see Metro and ZIP Code Maps

The standard cap rate for a Single-Family Real Estate Purchase is now 4.4%, which is below the 30-Year Fixed Mortgage Rate of 6.0%. That means that any investors buying with debt – which is most investors – will likely lose money after renting out their unit and paying their lender.

The example of Progress Residential, the largest private Corporate Landlord in America, proves the point. They own lots of single-family rents in markets like Atlanta, Phoenix, Nashville, and Jacksonville. Lately the Mortgage Backed Securities that Progress Residential uses to finance their acquisitions have become a lot more expensive, leading to higher interest rates, lower leverage, and reduced returns.

This constraining profitability for Progress Residential and other Wall Street Landlords is occurring just as the US Rental Market Bubble is set to burst. Renters in America are overburdened by rental rates and can’t afford it. Only 87% of Progress Residential’s Renters pay their rent on time. At some point many of these tenants are going to default on their lease, and end up being evicted.

This mass wave of evictions was avoided during the pandemic due to the Federal Eviction Moratorium. But I don’t think tenants and landlords will be so lucky this time around. And it’s ultimately this, combined with declining Home Prices, that could Crash the US Housing Market even further.

But in certain cities more than others. The highest share of investor home purchases occur in Sun Belt markets like Atlanta, Phoenix, Jacksonville, Miami, and Las Vegas. I predict that these areas will likely have the biggest share of investors firesaling their homes over the next 6-12 months.


JOIN as a Reventure CHANNEL MEMBER:

INSTAGRAM:
TWITTER:
CONACT US:

DISCLAIMER: This video content is intended only for informational, educational, and entertainment purposes. Neither Reventure Consulting or Nicholas Gerli are registered financial advisors. Your use of Reventure Consulting’s YouTube channel and your reliance on any information on the channel is solely at your own risk. Moreover, the use of the Internet (including, but not limited to, YouTube, E-Mail, and Instagram) for communications with Reventure Consulting does not establish a formal business relationship.

Image(s) and/or Footage used under license from Shutterstock.com.
Additional stock footage provided by Videvo.

#HousingCrash #wallstreet

46 comments

  1. The BIG MYTH: Wall Street Investors Buy with Cash.

    It isn't true. Check 3:37 to see why.

    The initial offer might be in cash. But the source is almost always debt. In the case of Progress Residential it's a Mortgage Backed Security, a pool of their properties collateralized by a mega loan ($500M-$1B) funded by Wall Street Bond buyers. The interest rate for the MBS tracks closely with the traditional Mortgage Rate.

    Other investors might use a Revolving Credit Facility from a bank like Goldman Sachs or Wells Fargo to fund the purchases. These Credit Facilities are typically adjustable/floating rate – meaning every time the Fed hikes short-term interest rates, the borrowing costs get more expensive.

    Moral of the story: Wall Street investors are getting hit by rising interest rates as much as the regular homebuyer. If not more.

  2. Lets see if we can say it into existence so we can drive the prices down and steal all homeowners equity with higher interest rates.

  3. This whole thing felt like excessive wealth playing games with lives and people got hurt and a distraction from other things that NEEDED ATTENTION ⚠️ Epstein Maxwell The List and Covid was it created??
    Was Covid also a distraction from the public wanting to see the List

  4. As long as real estate is seen as an "investment" the housing situation will never be solved. It's another cog in the wheel of making money. The only hope you have is to save and wait for the bubble to burst again and then vote to have wherever you bought the house to be rezoned for multifamily, only then can we solve the housing problem

  5. No one should have to pay taxes just to live in their primary residence. Investors who drive up the price of housing should have to pay through the nose.

  6. In still angry about having a house I wanted and was willing to pay 1/2 of total asking price in cash that day, pulled out from under me the next day by an investment buyer paying 3× the price but over a 10 year period. Bet if I checked it's already costing more then there paying. And the seller is going to get stiffed on the majority of the price.

  7. They're buying all the trailer parks in Indiana. Anything they can get their hands on. Raising the rent sky high and being slum lords. You'll never see them again. The poor people tend to live in trailer park. Can't afford it now.

  8. Institutional investors, REIT should be allowed to buy apartments and commercial property and not single family homes. Doubling property tax for 2nd home can help.

  9. But seriously
    Excellent report..
    very interesting
    Let Ukraine have all the guns rockets planes logistics and training that they need to beat back the cruel bully Russia.
    The big issue now is to fight back against undemocratic forces, especially Russia…

  10. The investors today are big corporations that buy 💸 💰 cash.
    Yeah they make a cash offer with their buddies from the bank with borrowed federal money.
    It's just disgusting. If you have your own cash, then go ahead and buy a duplex and provide affordable rents.
    This country is a communist country now. Its like Russia, its who you know ,, and connections, like I said disgusting!!. The average person goes for a loan , you put 50% down and they still won't give you a loan on a rental duplex. A corporation, (connected person) , goes for loan puts 10% down on a rental property , they get the loan . DISGUSTING!!!!!!!!
    Communism turned out to be politically connected, and who you know owns everything and makes money. Then they file bankruptcy if it doesn't work out and the federal government insures the loan.

  11. Canada 🇨🇦 is even worse. The average home 🏠 in Toronto and Vancouver is over $1,400,000 and wages haven’t seen a real increase in over 30 years. People have been living off the equity of their homes through lines of credit, thinking 🤔 the price will perpetually go up. When Canada 🍁 gets hit, it will probably be the worst crash 💥 in it’s history.

  12. An increase in the cost of acquisitions going forward doesn't decrease the profitability of properties already acquired. The bond rate for prior purchases was already set when they used it to buy the property.
    A more likely outcome is a halting or reduction in new purchases rather than liquidation.

    What this does confirm is that normal interest rates yields a normal housing market. Historically low interest rates yields inflated prices.

  13. In 2020 my apartment was $625 a month, it's now $1000 a month and I know a lot of the people there myself included are moving out. Which says something since there's already empty apartments

  14. Eh. So what I'm hearing is that buyers looking to live in the home should see a lot more inventory than they have, but the downside is that their mortgage rates are going to end up being pretty damn bad.

  15. GOOD!! I have always been against REITs. I have no problem with individuals who increase their personal portfolios. But BlackRock can kick rocks!

  16. So basically greedy investors were predatory these past years taking the housing market into crisis because they wanted everyone’s stimulus checks? Also causing a demand and supply problem while causing a panic and making rental prices sore? Interesting.

  17. Sometimes I really wonder how people make huge profit investing in the stock market, I know investing is a legitimate way to gain financial freedom but how is it done?

  18. I hope all these giant companies default! They have no business buying up homes displacing the middle class! Just wait Trump/DeSantis 2024 they will crash and burn! I would sell to before they shut them down with regulations

  19. Because it was fake! The globalists failed here that’s why! DeSabtis and Trump announced 2024 ticket! It’s about to get very fun!

  20. They couldn't rent a house for 2,400 in Phoenix? Around 2,400 is probably the average rent for a 3/2 in that neck of the woods.

  21. Dude…Good content. We are on the verge of a bath of blood (in the housing market). The automobile repossession market doubled in about the last 60 days. Wait until broader layoffs starting happening in Q4.

  22. The reason WS stopped buying is because they know values are going to start falling. Most of WS is not using 100% leverage so mortgage rates are irrelevant. WS is using a combination of investor raised capital and some leverage.

  23. Nothing brings me more joy than greedy Wall Street bankers losing money after trying to gauge hard working Americans.

  24. Rental market is at a massive shortage… we will never catch up on affordable housing…. Government subsidies coming for middle class rent… but most of ur info was good… but u are leaving Peices out like subsidized immigration

  25. Companies like Progress Residential need to dump houses and go belly up. I hope purchase prices and rental prices drop like a rock. Current prices are fake and way overinflated due to home prices doubling and tripling.

  26. NOT TO MENTION THAT THEY HAVE TO PAY PROPERTY MANAGERS AND CONTRACTORS TO RUN THE PROPERTIES AND DO REPAIRS. THEY WERE DREAMING AND THESE WALL ST FUCKS DON'T KNOW SHIT ABOUT RENTAL PROPERTY. MOM AND POPS HAVE A HUGE ADVANTAGE.

  27. Investors earns little or none due to high mortgage payments, very high increased in all home insurance, and expenses, plus on top of these, the property taxes went so high. Then landlords, we’re forced not to evict for freeloaders , abusive tenants that destroys the properties too. So, why invest?

Leave a comment

Your email address will not be published.