Category Archives: Home Ownership

Helping Homeless Veterans in Tampa Bay, EquiAlt Donates Three Homes To Potter’s House Community Development.
When the real estate bubble burst and the subprime, mortgage, credit and hedge fund markets collapsed in 2008, Brian Davison, now CEO of Tampa-based EquiAlt, was one of the guys who got knocked down. In evaluating what was really important to him moving forward, Davison implemented a philanthropic mission to give back or assist others not as fortunate as he or his company has been. In carrying out his mission to his new home base in Tampa Bay, Davison announces that EquiAlt has donated three single-family homes to Potter’s House Community Development (PHCD). Two of the homes are located in Tampa and the third in Clearwater. The total donation is worth approximately $120,000. PHCD is commissioned to empower the people in our community though several ministries that target health awareness, illiteracy and strengthening the family. Their focus is to educate families in...
At the Doorstep of Immense Investment Opportunity
For the most part, Republicans blame Fannie Mae/Freddie Mac and government policies for inflating the housing bubble, while Democrats blame Wall Street for creating exotic investments that funneled subprime mortgages. Regardless, Wall Street’s success in the alternative real estate market depends largely on unparalleled demand for rentals from American families who homes were lost to foreclosure and from renters who want to buy but cannot get mortgages due to restricted credit banking practices following the 2008 real-estate bust. Investors Seek Higher Returns The U.S. homeownership rate today stands at 65.3 percent, the same as 20 years ago. However, because single-family rentals represent 10 percent or more of the housing market, lending and investment opportunities, still in their infancy, are immense. These properties offer 10 percent or higher yearly yields in rental income, and tidy profits when the homes are eventually sold. Funds set up by Blackstone, the...
Where Have All the Homeowners Gone?
We’ve heard it before: “The 2008 real estate crash resulted in more than 7 million foreclosed homes.” But what does this number represent in real terms?  It means 7 million home owners whose creditworthiness has plummeted, leaving them unable to again enjoy homeownership. Where have they all gone? It would seem, to renting. More than 100 million Americans are renters. Never before in history has the business of renting single-family homes been more centralized, thanks to behemoth investors like Blackstone setting the pace. From individual investors purchasing just a few properties to multibillion dollar hedge funds buying thousands, the rental market has become big business. Multiunit landlords are enjoying access to bank financing at the same time that many homeowners – especially blacks, Hispanics and the under-40 crowd - are being denied. Is this a welcome trend? Thomas Lawler, an economist and formerly with Fannie Mae, stated, “Early buying...
As Feds Slow Bond Program, Mortgage Rates Jump
United States mortgage rates soared to their highest since September 2013 as real estate investors speculated the Federal Reserve’s slowdown on its $85 billion-a-month bond-buying program is aimed at maintaining lower borrowing costs. Freddie Mac reports the average 30-year fixed mortgage rate was 4.46% during the first week of December, up from 4.29%, while the average 15-year rate rose to 3.47% from 3.3%. Despite near-record lows in May, mortgage rates have steadily climbed, all while the Fed continues to weigh when it should scale back its stimulus. 10-year Treasury notes yields are their highest in two months, due to lower unemployment rates. The Treasury notes are considered a benchmark for home loans. Experts agree that the Federal Reserve is likely to taper sooner, not later. With a December 17 meeting looming, Federal Reserve Bank of Atlanta President Dennis Lockhart said he is optimistic about the economy's outlook. "I...
With Homes for Sale in Short Supply, Prices Rise
Home prices increased 12.5% this October over last October, according to a report from Case-Shiller, which also reveals that the increase is likely due, not to a reduction in foreclosures, but a tight supply of unsold inventory. Home price gains are the strongest in eight years, according to the National Association of Realtors, rising in 88% of metro markets, and encouraging real estate investors. Among individual states, home prices rose 25.9% in Nevada, 22.4% in California and 14.2% in Georgia, considered the hottest market because this percentage represents the smallest gap across all states, and is only two percentage points away from the highest year-over-year price increase in thirty-five years. Cities posting growth of 10% or higher include Las Vegas, Los Angeles, Atlanta, Phoenix, Detroit, and Miami, among others. And there is more good news. The Case-Shiller report lists twelve US cities with double-digit annual returns, along...
Risks That Crouch Hidden In the Grass
“As prudent investors and managers, we must be aware of the realities we face.” ~ John Mauldin No one would argue that there has been plenty of time for discussion of the 2008 financial crisis among central bankers. But coming up with answers, well, that’s a different crouching tiger. Central bankers have accepted no responsibility for ignoring the warning signs of excessive debt, keeping interest rates too low for too long, ignoring housing market bubbles, or failing to regulate banks properly. In fact, they were hugely rewarded with money, power, and prestige, leaving taxpayers to foot the bill for bailouts. Does this point to the need to remove banking supervision from central banks? Or to put politicians in charge of setting interest rates? Clearly, reform of the Federal Reserve is sorely needed. However, more rules and regulations are not needed - rather, holding the feet of central...
A Unique Credit Instrument Fueling an Equally Unique Trend in Home Ownership
From the time of the real estate pricing peak 2006, the average price or residential real estate across the United States fell 35%. This price drop precipitated the start of a quiet trend among private equity firms, hedge funds, and real estate investment trusts. Companies such as Blackstone Group LP have entered into transactions to purchase almost 200,000 residences, paying upwards of $20 billion for the properties. Many of these properties are in some of the hardest hit housing markets in states such as Florida, Nevada, California, and Arizona. These companies are looking to take the landlord/tenant relationship to a new level. When purchasing distressed properties, in bulk, from lenders that foreclosed on their original mortgagees, these companies gain several significant advantages. First, they are able to negotiate a better price.  A commercial lender is in the business of lending money, not managing real estate. ...