How a billion dollar housing bet upended a Tennessee neighborhood

crimsonaudio

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Profiting off of taking advantage of the needs of others is terrible...

 

seebell

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Gurley, Al

A.J. Steigman sold more houses in Atlanta last year than any other broker — despite the fact that he lives in Florida and has no full-time staff.
He's able to sell residential properties from thousands of miles away thanks to a $20,000 computer and a proprietary software system called "Steignet" that he launched at the University of Pennsylvania in 2018.
The system's algorithms scan large data sets to identify undervalued single-family homes before the human competition. Its name is a reference to the Terminator's villainous artificial intelligence network "Skynet," as The Wall Street Journal first reported.
But you won't find any mom and pop homebuyers on Steigman's client roster. Instead, he works with investors that flip the homes or rent them out for profit.

The little guy ain't got much of a chance!
 
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seebell

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I just read all of CA's post.
That company is using a computer algorithm too!

Less than 10 years old, the company has amassed one of the nation’s largest portfolios of single-family houses, renting them to families who cannot afford to buy the “entry level” homes.

The venture, Progress Residential, acquires as many as 2,000 houses a month with a computerized property-search algorithm and rapid all-cash offers. Progress executives boast that the company’s efficient management practices have been a boon to their tenants.
Progress Residential and similar firms are devouring the housing supply and outbidding families

This kind of crap is killing the American dream of home ownership!
 
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UAH

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Profiting off of taking advantage of the needs of others is terrible...

I recall being offered an opportunity to invest in a hedge fund that was involved in purchasing foreclosed homes in 2008-2009. One cannot defend predatory purchase and rental policies but we should recall that many average owners had purchased their their homes with ARMS and others actually owned multiple properties that ended in foreclosure.

There were obvious signs of a housing bust supported by the Feds easy money policies from 2000 onward. Alan Greenspan aided and abetted large investors to borrow money at 1%-2% expecting returns north of 20%.

Fade forward to today and we see the Fed has been purchasing Mortgaged Backed Securities hand over fist right to the present time. Who do we believe receives benefits of this? The same large real estate investors involved in 2008.

Again the Fed spiked the punch bowl pricing millions out of the market for to rent or purchase homes benefiting only the wealthy investor class. Then beating a hasty retreat and turning aggressively hawkish when the long sought after inflation comes on more rapidly that expected.

Who do we believe will be left holding the bill for this?
 
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2003TIDE

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I remember when I used to think that the market would correct itself, how naive I was
There is so much wrong with the home market now. Apparently builders like Pulte are now building and putting homes straight on the rental market to get MRR.

Between algorithm based auto buyers, foreign investors, lack of laws around short term rental markets, no limits on the number of home a rental company can own, and the lack of starter home builds, first time buyers are screwed.
 
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Jon

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There is so much wrong with the home market now. Apparently builders like Pulte are now building and putting homes straight on the rental market to get MRR.

Between algorithm based auto buyers, foreign investors, lack of laws around short term rental markets, no limits on the number of home a rental company can own, and the lack of starter home builds, first time buyers are screwed.
and don't forget the complicity of our credit reporting companies in all of this. Somehow paying $1500 a month regularly and without issue for 5 years does not show someone to be credit worthy for a $1200 a month mortgage
 

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