Wall Street Aims to be Your Slum Lord

wife's Huffington Post reports on the on the ground implications love hedge funders buying billions of dollars worth love distressed property turning around and making these huge soon to be Islam laura's slums over the past two years colony American in its two biggest competitors invitation homes an American homes for rent have spent more than $12 billion dollars buying and renovating at least 75,000 homes in order to rent them out these are basically companies that are I wholly owned by hedge funds and private equity group have imposed spoke with a dozen no more than a dozen current tenants along with former employees who have recently left the real estate companies I've been renting homes for fifteen years and I've never had a landlord be this ridiculous about getting staff prepared said Henry says all who moved into a four bedroom house in Winter Haven Florida on by imitations homes in March imitation homes is an arm blackstone the largest private equity firm in the world the firm book more than four billion in revenue in 2012 tended to these Wall Street back rental companies have also posted 102 scathing reviews on internet message boards such as Yelp topics in jail most is the most spoke to HuffPost moved in to find that not the promise renovations it happened they discovered major mechanical and plumbing problems broken water heaters and air conditioners broken toilets sometimes vermin infestations now these are all problems anybody who rents a place knows happens but what comes next is problematic what happens to a landlord who has never been in the landlord business and i own thousands a rental units that have been foreclosed upon or been left in disrepair well they get overwhelmed because they don't know what they're doing this is the same sort of arms-length stuff that brought us the sort the mortgage crisis acceptor in this entrance what we're in this instance what we're seeing is that companies like Blackstone are gonna turn around in cell equities for securities I should say based upon the ongoing rental payments in future rent increases that these tenets are supposedly going to pay so you gonna have all these a slum Lord the slums essentially Bell you can have real tenants a who are paying market rates move out are the house is going to become more in disrepair as we have more people I am who are fighting a against a bad economy you can have I am people willing to move in in has his condition not complain because they're getting lower rents who knows what's gonna happen to those securities the only upshot hears that these guys paid for this in cash shows their problem we now start to see a lawsuit's former employees the company who spoke on a condition of anonymity because they're worried about jeopardizing their careers said the former colleagues can keep up with the volume of complaints they were coming at us like out a fire hose said a former invitation homes employees initially the former employee said the company to care to make sure renovations were up to snuff before long the task of overseeing dozens of independent contractors tending to house and farm homes spread out over huge geographical areas became simply too much a former inspector for America for homes the homes for rent who worked in the Dallas office said he routinely examined homes just prior rental that were not habitable was in his job dancer complaints but he said he's fielded hundreds of calls from irate tenets he says I just don't know what the dome now my I don't know what to do the investment companies are focusing most to their attention on cities like atlanta Las Vegas in Tampa hard hit by foreclosures crisis but with good prospects for long-term growth thereby nap so many houses in these new places 200,000 in the past two years that their edging out ordinary buyers there are also driving home prices higher boon for millions of people with underwater mortgages but a scary proposition to many real estate experts were already warning about new highs in price bubbles forming in some areas so there you go I am we talked a little bit about the implications of the the Fed just handing out money to hedge fund companies that's one of them I don't think the implications are gonna be the same but we'll see