that house prices and rents would go up. The report’ s theme was that the West and the South would out perform the national average. We all know it’ s‘ location, location, location’; but it’ s also price points. The $ 110,000 – $ 180,000 houses in sub-markets of the metropolitan areas in the South will be hotter than most other areas.
Fewer restrictions on lending Trump plans to repeal the Dodd-Frank act, which restricts lending to people with less than stellar credit. This will allow more borrowers to qualify for loans and the obvious observation is that demand will reduce the supply and prices will go up.
And then there’ s Fannie Mae The bigger piece of news that you can find in the Wall Street Journal from 1 / 25 / 17 is the headline on the business page: FANNIE BROADENS ROLE TO HOUSE RENTALS.
Fannie Mae is backing debt from the Blackstone group’ s investment in single-family houses, effectively giving an endorsement to Wall Street’ s expanding business of owning and renting homes.
This to me is nuts! Blackstone is the largest owner of single-family houses in the U. S. with over 48,000 houses. They can outbid everyone as their interest rate for borrowing has been around 1 % and now the government backs their loans. Fannie Mae is backing Blackstone to the tune of one billion dollars.
This is the equivalent of living in China and being in business with their government. How does the average person compete? You have to out-hustle and out-think corporate America to get a sliver of a slice of opportunities.
So what does this mean to you and me who invest in the U. S.?
The first thing that comes to mind is to buy Blackstone’ s stock – but I can’ t control stock and one price fits all. There is no negotiation on stocks, unlike real estate.
My crystal ball is cracked, but here’ s what I think:
Blackstone and all the other funds in the US are going to continue to ramp up. Prices and rents will go up and many people will never be able to afford homeownership. Thus, they will rent and there will be big opportunities in low-income housing, as well as to continue on a buy-and-hold model on single-family houses.
I’ m holding my single-family houses and obtaining as many as I can afford, and I’ m not going to deviate from holding long-term houses for the production of income. If you’ d like a copy of the Wall Street article and the Housing News Report, email me at RJP @ BuyCashFlowHouses. com
No cost structures for South Africans For South Africans to save cost when setting up LLCs in the U. S., they should consider the no cost structure of using land trust like savvy U. S. investors do. It cost zero to set up these structures when we transfer the beneficial interest in these trust to you and there are specific ways, including proper insurance, to protect your interest. For more information on these structures, email me and I will gladly forward it onto you.
RESOURCES
RJP @ BuyCashFlowProperties. com
www. reimag. co. za FEBRUARY 2017 SA Real Estate Investor 45