Wall Street May Soon Be Your Landlord
Fannie Mae mulls bulk sales that would turn homes into rentals
By Mark Russell, Newser Staff
Posted Mar 19, 2012 7:02 AM CDT
A financing available by Fannie Mae sign is posted on a foreclosed property offered for sale Tuesday, May 31, 2011, in the Los Angeles.   (AP Photo/Damian Dovarganes)

(Newser) – Wall Street firms may soon have a new gig: landlord. A number of them are looking into getting directly involved in real estate, buying up foreclosed properties from Fannie Mae in bulk, reports the Wall Street Journal. They couldn't then flip the houses—per the deal, they would rent out the properties and not resell them for several years, in an attempt to unclog the housing market. And that arrangement likely sounds fine to many investors: Goldman Sachs economists pegged the annual yield on rental units at a 6.3% average nationwide, though that figure topped 8% in some areas; mortgage bonds, meanwhile, are yielding about 3%.

The planned bulk sale is not huge: eight pools that contain a total of 2,500 houses, worth about $320 million. "We're investing a lot of capital, a lot of time, with the expectation that this is a very small beginning to a very big movement," said the head of one securities company considering buying. But will the bids be too low, or will investors make healthy offers in the hopes of convincing Fannie Mae that bulk buys are the way to go? On the investor side, one warns that it's tough to get a "responsible return on capital" due to the costs associating with renovating and managing the properties. Bids are due next month.

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Showing 3 of 10 comments
myflap.blow
Mar 19, 2012 2:19 PM CDT
gotta love it. a bunch of rich assholes bring the country to its knees, get bailed out for it, then snatch up the plunder they caused so they can make even more money. What next? Throwback to deflowering the new brides too?
Scaramouche
Mar 19, 2012 12:10 PM CDT
"they would rent out the properties and not resell them for several years, in an attempt to unclog the housing market." Which means that if you rent one of these properties, you can pretty much forget about them doing necessary maintenance. They're not going to invest in something they want to tear down anyways.
CatNip
Mar 19, 2012 9:53 AM CDT
They need to make all of this property A) affordable to the 99%, since that's where they got it; and B) make every house in this deal "rent to own," and have all payments go toward down payments to buy.