Hedge funds buying houses: How are the loans structured?

Discussion in 'Economics' started by TazTheLaz, Jun 3, 2022.

  1. TazTheLaz

    TazTheLaz

    Recently, I have been looking at the trend of hedge funds buying single-family rentals.

    I am wondering how the companies get mortgages for these houses. Are they adjustable rate, which companies do they borrow from, etc…
     
  2. They pay cash
     
  3. RE is financed at the portfolio or firm levels, not via individual mortgages. These properties are
    typically bought in bulk, not one at a time through local brokers/agents.

    Read Blackstone's 2017 Invitation Homes prospectus for details on financing. IIRC they were
    leveraged a bit more than 3:1 overall, a much lower gearing than the typical retail purchase.
     
    TazTheLaz likes this.
  4. The idea that corporations should be allowed to compete with individuals for homes is absurd, and an obvious sign of the corruption in our societies. Having these players in the "market" for homes does nothing but create rents which are a transfer of wealth from poor to rich. It is modern day feudalism. The higher prices created by this regime don't really even lead to more supply because housing isn't a normal market - you can't just create more land in the places people want to live.
     
  5. TazTheLaz

    TazTheLaz

    Nobody asked for your opinion.

    I asked about how they buy them
     
  6. schizo

    schizo

    From what I've been reading, the big boys on Wall Street are buying with cash. They don't take out 30 year FHA loans like you or me.
     
  7. You must be new to this whole internet thing.
     
  8. Overnight

    Overnight

    It is not that they are new to the Internet. It is that they are new to the concept of a BBS.

    And everyone after this post who asks what a BBS is, is a young, stupid moron.