RLLD 3,455 Posted April 9 Heard on the Street: Blackstone Bets on Wealthy Renters Quote On Monday, Blackstone said it had agreed to buy Apartment Income REIT at a 25% premium to the property company’s most recent closing price. The offer values AIR Communities at around $10 billion including debt and is expected to close in the third quarter. This is a big deal. If Blackstone is making this bet then they think interest rates will be dropping...... it also signals the potential for a bubble. These people are not stupid, if they are doing this then there is something afoot in the industry......just a heads up for you RE geeks....money can be made..... Share this post Link to post Share on other sites
thegeneral 1,417 Posted April 9 4 minutes ago, RLLD said: Heard on the Street: Blackstone Bets on Wealthy Renters This is a big deal. If Blackstone is making this bet then they think interest rates will be dropping...... it also signals the potential for a bubble. These people are not stupid, if they are doing this then there is something afoot in the industry......just a heads up for you RE geeks....money can be made..... Real estate is always bubbling it seems. Then it pops and the bargains get bought up. Rinse and repeat. Long term should always be good. The short term is where people get smoked. I wouldn’t want to be a dude holding or investing in large amounts of generic office space though. That is the next bailout industry waiting to happen. 1 Share this post Link to post Share on other sites
RLLD 3,455 Posted April 9 3 minutes ago, thegeneral said: Real estate is always bubbling it seems. Then it pops and the bargains get bought up. Rinse and repeat. Long term should always be good. The short term is where people get smoked. I wouldn’t want to be a dude holding or investing in large amounts of generic office space though. That is the next bailout industry waiting to happen. Agree. What Blackstone did here was in the consumer rental arena.... they are signaling they think there is going to be some capitalization opportunities.... I trust these guys, they think they see something....worth watching... Share this post Link to post Share on other sites
Strike 3,981 Posted April 9 How dare they pay 25% MORE than they should have. Whoever sold that is committing FRAUD!!!! 4 3 Share this post Link to post Share on other sites
Hardcore troubadour 12,664 Posted April 9 Wouldn’t it be indicative of people not being able to get a mortgage or not wanting to? The younger generation does not look at owning like we did. I think it stems from them going from job to job. Many of the grown children of my friends have left NY for work elsewhere. Share this post Link to post Share on other sites
thegeneral 1,417 Posted April 9 11 minutes ago, RLLD said: Agree. What Blackstone did here was in the consumer rental arena.... they are signaling they think there is going to be some capitalization opportunities.... I trust these guys, they think they see something....worth watching... I’ll be watching. Share this post Link to post Share on other sites
TimHauck 1,804 Posted April 9 3 hours ago, RLLD said: Heard on the Street: Blackstone Bets on Wealthy Renters This is a big deal. If Blackstone is making this bet then they think interest rates will be dropping...... it also signals the potential for a bubble. These people are not stupid, if they are doing this then there is something afoot in the industry......just a heads up for you RE geeks....money can be made..... Would luxury rentals really be a great investment if the housing market tanks? 1 Share this post Link to post Share on other sites
Nomad99 411 Posted April 9 4 hours ago, thegeneral said: I wouldn’t want to be a dude holding or investing in large amounts of generic office space though. That is the next bailout industry waiting to happen. It's going to kill some banks. Share this post Link to post Share on other sites
RLLD 3,455 Posted April 9 4 minutes ago, TimHauck said: Would luxury rentals really be a great investment if the housing market tanks? Usually when the consumer arena is struggling the demand for rentals will increase as people delay buying homes due to economic uncertainty or difficulty in securing mortgages. It can lead to a steady stream of tenants for luxury rental properties. Luxury rentals usually bring higher rental rates compared to standard rental properties. Even when things go poorly, affluent individuals tend to still pursue upscale housing options, enabling higher rental income. Luxury properties in prime locations tend to enjoy long-term appreciation and hold their value better even during market downturns. BUT Even though demand for rentals may increase during a downturn, the big risk is always vacancies..... . Affluent tenants have more flexibility and options, sometimes leading to longer periods of vacancy. These kinds of properties usually require higher maintenance costs compared to standard rental properties. You may end up throwing some serious cash just maintaining the property to keep it attracive to the target market....and this sh!t can really eat into profits..... Then you will have the issues with terms.....sure you can declare the value of your property to be what ever you want, but in the end the bank has to agree to it.....and this is where financing can get dicey.....you can start the process with your valuation intact, and then get to the end and the valuation has changed....and not in your favor.....this luxury market is highly unpredictable.... and dont forget the taxes too.....usually the taxes are less than they should be against market value, unless the market dips of course... If you are not dealing in high-end properties there is less fluxuation, but then too less risk.....so less profit potential..... Share this post Link to post Share on other sites
edjr 5,569 Posted April 9 saw predictions rates will hit the 5s by late 2025 Share this post Link to post Share on other sites
Alias Detective 1,179 Posted April 9 22 minutes ago, RLLD said: Usually when the consumer arena is struggling the demand for rentals will increase as people delay buying homes due to economic uncertainty or difficulty in securing mortgages. It can lead to a steady stream of tenants for luxury rental properties. Luxury rentals usually bring higher rental rates compared to standard rental properties. Even when things go poorly, affluent individuals tend to still pursue upscale housing options, enabling higher rental income. Luxury properties in prime locations tend to enjoy long-term appreciation and hold their value better even during market downturns. BUT Even though demand for rentals may increase during a downturn, the big risk is always vacancies..... . Affluent tenants have more flexibility and options, sometimes leading to longer periods of vacancy. These kinds of properties usually require higher maintenance costs compared to standard rental properties. You may end up throwing some serious cash just maintaining the property to keep it attracive to the target market....and this sh!t can really eat into profits..... Then you will have the issues with terms.....sure you can declare the value of your property to be what ever you want, but in the end the bank has to agree to it.....and this is where financing can get dicey.....you can start the process with your valuation intact, and then get to the end and the valuation has changed....and not in your favor.....this luxury market is highly unpredictable.... and dont forget the taxes too.....usually the taxes are less than they should be against market value, unless the market dips of course... If you are not dealing in high-end properties there is less fluxuation, but then too less risk.....so less profit potential..... Mumble Jumbo. Babble babble babble. And yes I understand, but Christ you are just blabbering. 1 Share this post Link to post Share on other sites
RLLD 3,455 Posted April 9 1 minute ago, Alias Detective said: Mumble Jumbo. Babble babble babble. And yes I understand, but Christ you are just blabbering. It was a non-specific question, and I tried to answer as broadly as possible.... too often people will misinterpret what is written and turn it into something else....so I was trying to get a little ahead of that perhaps. Big meaner..... Share this post Link to post Share on other sites
IGotWorms 3,317 Posted April 9 4 hours ago, RLLD said: Heard on the Street: Blackstone Bets on Wealthy Renters This is a big deal. If Blackstone is making this bet then they think interest rates will be dropping...... it also signals the potential for a bubble. These people are not stupid, if they are doing this then there is something afoot in the industry......just a heads up for you RE geeks....money can be made..... Your post makes no sense. This means blackstone thinks the market is good Share this post Link to post Share on other sites
IGotWorms 3,317 Posted April 9 8 minutes ago, Alias Detective said: Mumble Jumbo. Babble babble babble. And yes I understand, but Christ you are just blabbering. That’s because he’s full of Share this post Link to post Share on other sites
Hardcore troubadour 12,664 Posted April 9 How about all the boomers sitting on a ton of cash and a big house? Where will they go when they eventually downsize? Buy into an overpriced market? Decent retirement homes by me are 60k plus a year. Share this post Link to post Share on other sites
Hardcore troubadour 12,664 Posted April 9 Sort of on topic, go to YouTube and put in Tim Dillon boomers and watch some of his clips. He’s a funny guy and makes some points. Also some good observations on Gen Z. They aren’t as stupid and helpless as we think they are. Share this post Link to post Share on other sites
Maximum Overkill 652 Posted April 9 5 hours ago, thegeneral said: I wouldn’t want to be a dude holding or investing in large amounts of generic office space though Agree. Land leases aren't even what they used to be. Why bother when you can buy the property for Dog Dirt in most cases. Get your hands on as much residential holdings as possible. Share this post Link to post Share on other sites
RLLD 3,455 Posted April 9 36 minutes ago, IGotWorms said: Your post makes no sense. This means blackstone thinks the market is good Almost....what it means is that they are forecasting rates will likely be dropping, they think the Fed is going to drop the rates, and I trust their judgement on this You are odd.... @Alias Detective This is what I am talking about, I have to post extra because people are like this.... objectively stupid..... Share this post Link to post Share on other sites
TimHauck 1,804 Posted April 9 45 minutes ago, RLLD said: Almost....what it means is that they are forecasting rates will likely be dropping, they think the Fed is going to drop the rates, and I trust their judgement on this You are odd.... @Alias Detective This is what I am talking about, I have to post extra because people are like this.... objectively stupid..... Buying luxury apartment buildings means they think rates will be dropping? Share this post Link to post Share on other sites
RLLD 3,455 Posted April 9 1 minute ago, TimHauck said: Buying luxury apartment buildings means they think rates will be dropping? Correct, it means that they think capitalization is going to be at a premium. And that means rates are probably dropping. normally I would say it’s a gamble, but with these guys I think they probably are spot on It’s more of a positive sign for people with money who can work the market Share this post Link to post Share on other sites
Fnord 1,141 Posted April 9 1 hour ago, Hardcore troubadour said: Also some good observations on Gen Z. They aren’t as stupid and helpless as we think they are. They most definitely aren't stupid. But some of them find a way to remain nearly helpless despite being smart. Share this post Link to post Share on other sites
Hardcore troubadour 12,664 Posted April 10 47 minutes ago, Fnord said: They most definitely aren't stupid. But some of them find a way to remain nearly helpless despite being smart. Well, he thinks they are just playing the game to their advantage. He’s a pretty funny guy. Share this post Link to post Share on other sites
wiffleball 4,647 Posted April 10 The Fed has a lot to do with this too. I guess you could say they're a Harbinger Helper. Share this post Link to post Share on other sites
peenie 1,691 Posted April 10 Aren’t they part of the problem? They gobbled up tons of homes and rent them instead of sell them. Here in Atlanta: …single-family homes have been snatched up in the thousands by private equity firms and publicly traded companies, converted into rental properties and bundled into complex investment vehicles. Armed with billions of dollars in cash, bulk buyers have accumulated more than 65,000 single-family homes across the Atlanta metro area… …investors buy in places with entry-level homes and in communities of color, a pattern that experts say is likely to exacerbate the racial wealth gap. Share this post Link to post Share on other sites
RLLD 3,455 Posted April 10 CPI Inflation Rate Stays Hot, Dimming Fed Rate-Cut Hopes; S&P 500 Futures Fall Quote After the CPI inflation data, markets were pricing in 27% odds of a Fed rate cut by June 12, down from 54% ahead of the report. Markets see 30% odds of at least three quarter-point rate cuts from the current 5.25% to 5.5% range for the Fed's key rate. That's down from 44% ahead of the CPI data. This makes their move a little more curious. I wonder what they have in mind. There must be more info out there. I know these guys can read the market..... they must know something else.... Share this post Link to post Share on other sites
TimHauck 1,804 Posted April 13 On 4/9/2024 at 12:41 PM, RLLD said: Heard on the Street: Blackstone Bets on Wealthy Renters This is a big deal. If Blackstone is making this bet then they think interest rates will be dropping...... it also signals the potential for a bubble. I don’t think they think there will be a bubble. They just bought 38,000 single family homes in January. https://www.fastcompany.com/91015371/housing-market-blackstone-instutional-landlords Share this post Link to post Share on other sites
RLLD 3,455 Posted April 13 10 hours ago, TimHauck said: I don’t think they think there will be a bubble. They just bought 38,000 single family homes in January. https://www.fastcompany.com/91015371/housing-market-blackstone-instutional-landlords I concur, I remain in my position that this signals something positive, not negative... Share this post Link to post Share on other sites
TimHauck 1,804 Posted April 13 2 minutes ago, RLLD said: I concur, I remain in my position that this signals something positive, not negative... You said it signals the potential for a bubble…. Share this post Link to post Share on other sites
RLLD 3,455 Posted April 13 29 minutes ago, TimHauck said: You said it signals the potential for a bubble…. And you think a bubble is bad..... why? I mean, they happen all the time, in various markets..... and if you play them correctly you win.... Why is that so bad? Share this post Link to post Share on other sites
TimHauck 1,804 Posted April 13 1 hour ago, RLLD said: And you think a bubble is bad..... why? I mean, they happen all the time, in various markets..... and if you play them correctly you win.... Why is that so bad? A bubble would be bad for someone that buys 38,000 houses right before the bubble. I’m saying Blackstone probably doesn’t think it’s a bubble. Share this post Link to post Share on other sites
Hardcore troubadour 12,664 Posted April 13 I think it signals they expect people to keep renting and others to join them. Share this post Link to post Share on other sites
RLLD 3,455 Posted April 13 31 minutes ago, TimHauck said: A bubble would be bad for someone that buys 38,000 houses right before the bubble. I’m saying Blackstone probably doesn’t think it’s a bubble. Bubbles are not hard to see, getting engaged early is the trick; hence my notice to you all 1 Share this post Link to post Share on other sites
TimHauck 1,804 Posted April 16 14 minutes ago, edjr said: It seems like there are more and more of these real estate doomsday YouTubers popping up. “Real Estate Mindset” still keeps coming up as a recommended search thanks to you, still posting doomsday videos every day for like the last 4 years. Here are some just in the last week “93% Home Buying Regret” “Homeowners going BANKRUPT” ”The Housing Market is Toast” ”78% of America is Broke” ”WARNING: Everyone is Going Broke” ”Something Really Bad is Happening in the Housing Market” Share this post Link to post Share on other sites
edjr 5,569 Posted April 16 1 minute ago, TimHauck said: It seems like there are more and more of these real estate doomsday YouTubers popping up. “Real Estate Mindset” still keeps coming up as a recommended search thanks to you, still posting doomsday videos every day for like the last 4 years. Here are some just in the last week “93% Home Buying Regret” “Homeowners going BANKRUPT” ”The Housing Market is Toast” ”78% of America is Broke” ”WARNING: Everyone is Going Broke” ”Something Really Bad is Happening in the Housing Market” Been like that for a couple years. Too bad so many people didn't listen and wait and bought houses they really can't afford. Share this post Link to post Share on other sites
TimHauck 1,804 Posted April 16 Just now, edjr said: Been like that for a couple years. Too bad so many people didn't listen and wait and bought houses they really can't afford. For the most part if someone bought in 2021 when many were saying it was a bubble they’d be in decent shape today. 1 Share this post Link to post Share on other sites
Hardcore troubadour 12,664 Posted April 16 A big problem is boomers not selling their houses as they age. My subdivision has about 30 houses and over half of them are older people with no kids or adult children 1 Share this post Link to post Share on other sites
Fnord 1,141 Posted April 16 3 hours ago, Hardcore troubadour said: A big problem is boomers not selling their houses as they age. My subdivision has about 30 houses and over half of them are older people with no kids or adult children This. I can't blame them for it I guess, but the boomers, true to history, have no problem with fukking the rest of us. Share this post Link to post Share on other sites
IGotWorms 3,317 Posted April 17 17 hours ago, Hardcore troubadour said: A big problem is boomers not selling their houses as they age. My subdivision has about 30 houses and over half of them are older people with no kids or adult children If you’ve got a mortgage at 2.5% why would you want to “downsize” to a 7% mortgage that would cost you as much or more for a smaller, sh1tier house? That’s a big part of the issue there, but time will heal that as people eventually HAVE to move — hell, to the cemetery if nowhere else in between Share this post Link to post Share on other sites
edjr 5,569 Posted April 17 7 minutes ago, IGotWorms said: If you’ve got a mortgage at 2.5% why would you want to “downsize” to a 7% mortgage that would cost you as much or more for a smaller, sh1tier house? That’s a big part of the issue there, but time will heal that as people eventually HAVE to move — hell, to the cemetery if nowhere else in between Nailed it. Forget 2.5% - I think most people that purchased before 2020 have 4 or less. 500k @ 8% - $3,635 500k @ 4% $2,387 Share this post Link to post Share on other sites
