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Guest Post: It’s About Time - JP Morgan To Enter The Housing Slumlord Trade

Tyler Durden's picture


Via Michael Krieger of Liberty Blitzkrieg blog,

It was just a matter of time before the most powerful crony capitalist bank in America decided to join the housing trade.  Making money running the food stamp program just wasn’t enough for Your Crony Highness Jamie Dimon and company, it’s time to join his financial oligarch brothers in the bidding war to corner the housing market and become your overlord.  That way they can control how you eat (food stamps) and where you sleep.  It’s become very clear what the large financial interests in these United States are attempting.  Funnel all the low interest crony American money, with a dash of Chinese laundered money, into the “housing recovery.”  From Bloomberg:

JPMorgan Chase & Co. (JPM) is giving its wealthiest clients the chance to invest in the single-family rental market after other investments linked to the U.S. housing recovery jumped in value.


The firm’s unit that caters to individuals and families with more than $5 million, put client money in a partnership that bought more than 5,000 single family homes to rent in Florida, Arizona, Nevada and California, said David Lyon, a managing director and investment specialist at J.P. Morgan Private Bank. Investors can expect returns of as much as 8 percent annually from rental income as well as part of the profits when the homes are sold, he said.


The bank’s wealthy clients are joining a growing number of private-equity firms and individuals buying rental homes in the regions hardest hit by the U.S. housing crash. Blackstone Group LP (BX) has spent $2.7 billion, and said last month it accelerated purchases as home prices rise faster than anticipated. Even after home values in November gained by the most in six years, investors are wagering on rental properties as an alternative to housing-related stocks and mortgage debt that’s already soared.


The strategy is similar to institutional buyers including Blackstone, the world’s largest buyout firm, Thomas Barrack’s Colony Capital LLC, and Oaktree Capital Group LLC. (OAK) They’re aiming to profit from low prices on distressed properties, often those in foreclosure and sold at auction — and the demand for rentals from people who don’t want to own a home or can’t qualify for a mortgage.

Now here’s where the article gets really interesting.

“It’s hard to find a private-equity firm on the planet that doesn’t have a strategy in this space,” Gary Beasley, chief executive officer at Waypoint Homes, said last week at the American Securitization Forum’s annual conference in Las Vegas. The Oakland, California-based company has bought homes in California, Arizona, Illinois and Georgia.

Sure seems like the right time to buy housing.  You know, after every single pool of aggressive private capital in the nation and abroad is already bidding.

Now take a look at how poor the returns are.  This is what happens when things get too crowded.

“If you look at some of the really beaten down areas — Miami, Orlando, Vegas, Tampa — we do think the return on that asset, if you just buy a home, collect the rent and do whatever you need to do on the cost side, you’re getting a return of somewhere between 6 percent and 8 percent,” Bordia said. Non- agency mortgage-backed securities are generally yielding 4 percent to 6 percent, he said.


Even as the housing market probably will do well across the nation, areas where property prices already are high such as San Diego, Los Angeles, Denver and San Francisco, will see lower rental yields, of 4 percent to 5 percent, Bordia said.

Are you kidding me?  A 6%-8% yield is all you get for taking on all the responsibilities of upkeep, rent collection as well as the risk of capital depreciation.  I’ll take the check please.

Finally, just when you thought the lunacy couldn’t get any more extreme…

While buying single-family homes to rent is among “the smarter ways to invest going forward,” Pastolove advises wealthy clients to buy the properties to rent themselves if they are able. Morgan Stanley isn’t purchasing homes or managing them; instead it’s making loans to high-net-worth customers at rates lower than a typical mortgage, and using their investment portfolios as collateral. That provides people the capital to purchase investment properties, he said.

This. Will. Not. End. Well.

Full article here.


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Mon, 02/04/2013 - 19:07 | 3214678 francis_sawyer
francis_sawyer's picture

Housing Bubble = Biggest 'land grab' of all time...


Besides gold & silver... They literally PRINTED land & houses for themselves...

Mon, 02/04/2013 - 19:08 | 3214698 bobthehorse
bobthehorse's picture

Jamie Dimon!

What a thief.

We all die.

And you can't take it with you.

So what's the point of acting like a douche bag?


Mon, 02/04/2013 - 19:20 | 3214742 your neighbor
your neighbor's picture

should someone tell the guy that sent the bullet that the bankers will be at the courthouse steps?

Mon, 02/04/2013 - 19:25 | 3214755 TruthInSunshine
TruthInSunshine's picture

Talk about muppet bait.

Investments that will flow into this newly offered JP Morgan investment "vehicle" rivals some of the dumbest money on planet earth at present.

Good luck, and make sure to thank JP Morgan on the way into this investment "opportunity," AND also when JPM kicks you in the balls on your way out of it, too, Muppets.

Mon, 02/04/2013 - 19:37 | 3214770 AlaricBalth
AlaricBalth's picture

"David Lyon, a managing director and investment specialist at J.P. Morgan Private Bank said Investors can expect returns of as much as 8 percent annually from rental income as well as part of the profits when the homes are sold."

Profits? That is assuming housing prices increase.

To paraphrase Ben Bernanke, I guess I don't buy your premise, Mr. Lyon.

Mon, 02/04/2013 - 20:05 | 3214885 Mark123
Mark123's picture

So if they value this poptential income stream like Amazon, FB etc it could result in 35,000% profit?  Count me in JPM!!!


I'll bet this one is targeted at the Asian investor...

Mon, 02/04/2013 - 21:31 | 3215121 trav777
trav777's picture

you can find resource MLPs that yield near that...8%??  And that was the HIGH water mark.

Yields have collapsed.  This phenomenon is a warning omen of heavy inflation coming, btw.  Money is going to start competing for yield and that means prices on things that have any kind of yield potential go up.  Paradoxically, that could be house prices.

Money is already chasing the stock market and its pitiful yields well beyond what would be expected.  The price of yield is simply a LOT higher now than we're accustomed to.  This is how people like Durden can look at market returns against historical PE and yield averages and say WTF.  It's just cheap money chasing scarce yield.  Yield is supply and demand as well.  It's why people like Gross are whining so loudly; he's having to pay A LOT MORE than he's accustomed to or he thinks is fair for his yield.

There's MORE than enough money out there to hyperinflate nearly everything.

Mon, 02/04/2013 - 22:14 | 3215206 Zer0head
Zer0head's picture
Blackstone Group on property buying spree


November 8, 2012

Giant real estate investment firm Blackstone Group has launched an ambitious campaign to buy distressed properties in Southwest Florida, so far doing it all with cash.




Blackstone intends to convert the single-family homes it acquires into income-producing rentals, then reportedly package them into real estate investment trusts to sell to investors.



Blackstone has spent more than $2.5 billion on 16,000 homes to manage as rentals, deploying capital from the $13.3 billion fund it raised last year, said Jonathan Gray, global head of real estate for the world’s largest private equity firm. That’s up from $1 billion of homes owned in October, when Blackstone Chairman Stephen Schwarzman said the company was spending $100 million a week on houses.

“The market is moving much faster than anybody thought possible,” Gray said during an interview in Blackstone’s New York headquarters. “Housing is much stronger than people anticipated.”

Blackstone has been purchasing through foreclosure auctions and short sales, in which banks agree to accept less than is owed on the mortgage, after more than 5 million homeowners lost their homes since the market’s peak in 2006.

It’s bought so quickly it’s “warehousing” more than half of the homes it’s acquired as it completes the purchase and hires staff and contractors to renovate and rent the properties, Gray said. It takes about 30 days to fix each home and then as much as 30 days to lease the property, he said.

“Renovating the 16,000 homes is an enormous job,” Gray said.


In other news

Authorities say Titusville FL slaying victim dismembered, beheaded


Mon, 02/04/2013 - 22:36 | 3215236 ebworthen
ebworthen's picture

So the FED low interest rates and $85 Billion per month MBS purchases and gravy to banks not only punishes retierees and savers, crushes home values, devalues the currency, and puts our children and grandchildren into debt slavery but also greases the wheels for monied crony capitalists to put us all into rent slavery?

What these fuckers don't know is that the renters are going to MESS UP the houses and properties they rent; and when the "riot in every city" happens when the ponzi collapses they won't have a fucking penny left.  These bankers and Ben and all the other criminals should be choosing which tree or lamp post they want to be hung from.  Kind of like reserving a cemetary plot, but different.

The entire thing is high treason, and Jamie Dimon, Ben Bernanke, and all the other complicit actors deserve to be hung.

Tue, 02/05/2013 - 03:10 | 3215692 Lore
Lore's picture

Is there such a thing as an MBS for tent cities?  Has that been tried yet?  Seems to me there is an opportunity in there somewhere --


Tue, 02/05/2013 - 07:32 | 3215804 Thomas
Thomas's picture

Single family property rentals are arguably non-economic in the best of times. This will be carnage for whichever clients get sucked into this fiasco. It also shows the shadow inventory is still very large.

Can we finally get going and put some of these guys in jail? Christ. These guys are just riding rough shod over the financial system. I keep hoping somebody shows Dimon that knowing how to box is not enough.

Mon, 02/04/2013 - 19:32 | 3214773 FEDbuster
FEDbuster's picture

For $5 million they could buy every house in Detroit, but it didn't make the list.  Neither did Gary, East St. Louis, Camden, Compton, etc...  Guessing that they still hold out some hope that poverty line white folks will still make their rent payments, good luck.

Mon, 02/04/2013 - 19:48 | 3214807 TruthInSunshine
TruthInSunshine's picture

The Muppets can expect a return of 8%? That's not Madoff level good (12%) in NOMINAL terms, but it's actually better in RELATIVE terms given the ZIRP-Environment we're now in!

Go, Muppets, Go! Get some!

p.s. -

  • 04 Feb 2013 at 4:03 PM
Which Federal Reserve Official Would Totally Pee In Bed If He Didn’t Have To Strip The Sheets Afterward?

“Devaluing a currency,” one senior Federal Reserve official once told me, “is like peeing in bed. It feels good at first, but pretty soon it becomes a real mess.” In recent times, foreign-exchange incontinence appears to have been the policy of choice in capitals from Beijing to Washington, via Tokyo. The resulting mess has led to warnings of a global “currency war” that could spiral into protectionism. [WSJ via DI]



Mon, 02/04/2013 - 19:51 | 3214835 francis_sawyer
francis_sawyer's picture

 "should someone tell the guy that sent the bullet that the bankers will be at the courthouse steps?"


Somebody should give him my address... He's welcome to mail ME all the free bullets he wants...

Mon, 02/04/2013 - 19:50 | 3214829 Citxmech
Citxmech's picture

"Morgan Stanley isn’t purchasing homes or managing them; instead it’s making loans to high-net-worth customers at rates lower than a typical mortgage, and using their investment portfolios as collateral."

Are you fucking kidding me?  Who would actually go for this deal?

They are really scraping the bottom of the barrel at this point. . .

Mon, 02/04/2013 - 21:36 | 3215140 trav777
trav777's picture

we're in an economic reality where money is cheap but real yield ISN'T.

All this cheap cash will start to chase, and when it does, it's like when a member of herd breaks in front of predators, there's basically a mass stampede.

You don't want to move your money too aggressively toward the herd, because they will spook and then you get run over.

The bond welfare queens of the past 100 and whatever years are now looking at portfolios which are no longer magically growing...this money is going to be chased out into the open as it is forced to look for a home that can support its growth needs.  And we haven't even gone to NIRP yet lol.

This is what happens when economists and bankers get to mess with money instead of tying it to REAL BILLS, which self-regulate.

Mon, 02/04/2013 - 22:37 | 3215260 Cosimo de Medici
Cosimo de Medici's picture

I can see the chase for yield becoming the great wave of privatization, where the government sells off many of its services.  They already do it for war, or at least security (Academi).  Over time, the Blackstones and MetLifes of the world are going to be taking over Interstates, bridges, the Post Office, even National Parks.  There's where some of your inflation will come in, because even if private companies made all these entities efficient, they'll still cost the average citizen more once they are made economically viable.

Mon, 02/04/2013 - 23:39 | 3215409 TruthInSunshine
TruthInSunshine's picture

This is what the PIIGS are being forced to do now (and some U.S. states/counties/cities, as well-- think Jefferson County, Alabama, or Inland Empire, California).

The fiat conjured boom-bust cycle allows those who are the best friends forever of central banks to swoop in and buy toll roads, water/sewage treatment facilities, islands (e.g. Santorini; is it still on the table?) for a token (pun intended) gesture.

Voila. Harvest cometh.

Mon, 02/04/2013 - 21:39 | 3215150 Groundhog Day
Groundhog Day's picture

only after they have squandered the Pensions of the police.  Until then, the police will protect them against their better judgement.  Because the only thing that pisses cops off these days is a threat to their pension or annual 2.5% expected raise

Tue, 02/05/2013 - 01:41 | 3215597 cornflakesdisease
cornflakesdisease's picture

Bob, I think we have a problem.  You make too much sense.

Tue, 02/05/2013 - 01:41 | 3215598 cornflakesdisease
cornflakesdisease's picture

Bob, I think we have a problem.  You make too much sense.

Mon, 02/04/2013 - 21:26 | 3215111 Buck Johnson
Buck Johnson's picture

This isn't going to end well, when they find out that rents won't be able to hold even that small percentage.

Mon, 02/04/2013 - 23:39 | 3215410 Cathartes Aura
Cathartes Aura's picture

section 8 circle jerk time.

Tue, 02/05/2013 - 10:53 | 3216156 FEDbuster
FEDbuster's picture

Yes, there will be an outcry for more section 8 funding, and bankster pressure for .gov to provide it.  This steady flow of rental income will insure their 8% return.  Plus with section 8, landlords have better control of the tenancy.

JPMorgan's "Section 8, 8% Return Fund"

Mon, 02/04/2013 - 22:07 | 3215212 monoloco
monoloco's picture

Now they're sowing the seeds for the second harvest.

Mon, 02/04/2013 - 23:40 | 3215412 Mentaliusanything
Mentaliusanything's picture

No I think its the third Horseman of the apocalypse.

8% return are you kidding me. Once the house is trashed about and looks like a 40 year old hooker it will be worth just as much. Houses are never investments, like Airlines they chew money.

Houses are a discretionary purchase which ties you forever to the blood sucking margin takers that grew out around it. One thing for sure It won't end well.

Mon, 02/04/2013 - 23:54 | 3215442 All Risk No Reward
All Risk No Reward's picture

That's just it...  Not only did the Big Finance Capital criminals use globalism to reach around the world in order to steal all the more wealth from all the more people, they also used the credit bubble to literally reach into the future to steal even more wealth from more people.

Debt pulls demand forward and leaves a gaping demand hole surrounded on all sides byt "fiscal cliffs."

And many in the chumptocracy think these Art of War operators "dumb."

Little do they know that's all part of the freakin' plan!

"Pretend inferiority and encourage his arrogance."
- Sun Tzu, Art of War

Mon, 02/04/2013 - 19:08 | 3214700 Buckaroo Banzai
Buckaroo Banzai's picture

Wow, how did the mainstream media miss this guy???

Oh that's right-- they are worthless, biased, Libtard shitbags.

Mon, 02/04/2013 - 19:32 | 3214778 Boozer
Boozer's picture

That guy gets my vote Buck.

Mon, 02/04/2013 - 19:38 | 3214782 Widowmaker
Widowmaker's picture

They're all faggots, run by faggots, and faggots author all their fag content.

If it's not about fags or dick-sucking fag pride its not news.

Mon, 02/04/2013 - 20:27 | 3214787 FEDbuster
FEDbuster's picture

He's not going to be invited on CNN anytime soon.

BTW, Piers Moron is going to be in TX tonight facing a double barrel of "Teds", Sen. Ted Cruz and Ted Nugent.  Alex Jones is on his way from Austin, with megaphone in hand.  Should be interesting.

Mon, 02/04/2013 - 21:52 | 3215184 MisterMousePotato
MisterMousePotato's picture

If you have never heard Ted Nugent speak on the second amendment, you should make the effort, not just because he is incredibly knowledgable on the subject, but also because he is a pleasure to listen to (articulate, devoid of disfluencies, etc.) - kinda like William F. Buckley (who even cares what he's saying? It just sounds so good.)

Fri, 02/08/2013 - 00:33 | 3225156 All Risk No Reward
All Risk No Reward's picture

They get paid to push an agenda of the people who can maximize their profits and paychecks - Big Finance Capital.

Who are these people?

Debt Money tyrants, by definition.

Tue, 02/05/2013 - 03:32 | 3215705 All_Is_Well
All_Is_Well's picture


Mon, 02/04/2013 - 19:06 | 3214690 Buckaroo Banzai
Buckaroo Banzai's picture

What a stupid, giant clusterfuck our economy has become. I weep for my country.

Mon, 02/04/2013 - 19:44 | 3214800 unrulian
unrulian's picture

dry your eyes and get angry

Mon, 02/04/2013 - 19:48 | 3214823 FEDbuster
FEDbuster's picture

Dry your eyes and take steady aim.  Remember to squeeze, not pull.

Mon, 02/04/2013 - 20:15 | 3214913 Bad Attitude
Bad Attitude's picture

No time to weep. Now is the time to prepare. Now is the time to buy shelf-stable food. Now is the time to buy emergency medical supplies. Now is the time to make sure you have an independent supply of drinking water. Now is the time to top off your ammo supplies (much harder now than two months ago).

Don't feel overwhelmed if you can't do everything at once. Do what you can. Any preparation is better than no preparations. An extra week of food and water puts you in a better position than the majority of your neighbors.

You have seen what has happened to the ammunition, firearm, and magazine inventories after one pronouncement from Dear Leader. Just imagine what will happen if there is an economic hiccup and most people decide there may be food shortages.

Soon, the ride is going to get real bumpy.

Here is an Argentinian's account of what he experienced and lessons learned from the 2001 economic collapse in Argentina:

Mon, 02/04/2013 - 22:46 | 3215276 klockwerks
klockwerks's picture

Another thing that is very important is your medication. When you get your 30 day supply, take out 7 pills and put them in your old bottle. You run out in 21 days and they will let you reorder for the next script. In 4 months you have saved up 30 days of meds. Been doing it for 4 years now so when it goes over the cliff you won't be out of your meds. Read a study the other day and they claimed medicine could last 20+ years and it would still be good

Tue, 02/05/2013 - 00:13 | 3215475 All Risk No Reward
All Risk No Reward's picture

First of all, make sure you need the medication.  Statins are essentially a hoax that damage the brain, cause muscle deterioration and diabetes.

Big Pharma is a subdivision of Big Finance Capital.  They run it with the same way they run the Debt Money Tyranny.  High IQ doctors are subjected to the latest brainwashing and propaganda immersion techniques - now you know why they make sure they are sleep deprived.  Those who question "the authority" meet stiff resistance.

Your TG/HDL ratio is important, so make sure that you know what it is and what value is ideal...

In more recent years, scientists discovered two types of LDL cholesterol. One type consists of large, fluffy LDL particles that appear to have no potential to cause atherosclerosis or the development of plaques on the large or medium-sized arteries. The other type consists of small, dense LDL particles that are strongly associated with arterial plaques and this can increase the risk of heart disease. So now you have good “bad” cholesterol (large, fluffy LD particles) and bad “bad” cholesterol (small, dense LDL). Getting confused? Well, so is everyone else who is fighting the cholesterol wars, because we now know that the more bad “bad” cholesterol you have, the more likely you are to have a heart attack, whereas having a high level of the good “bad” cholesterol isn’t likely to have any adverse health effects.

How can you tell which type of LDL you have? All you have to do is determine your ratio of triglycerides to HDL cholesterol, which would be found as part of the results of your last cholesterol screening. If your ratio is less than 2, you have predominantly large, fluffy LDL particles that are not going to do you much harm. If your ratio is greater than 4, you have a lot of small, dense LDL particles that can accelerate the development of atherosclerotic plaques – regardless of your total cholesterol levels.

The importance of this TG/HDL ratio was confirmed by studies from the Harvard Medical School. This research found that the higher your TG/HDL ratio, the more likely you would be to have a heart attack. How much more likely? In one study, those with the highest ratio had sixteen times the risk of those with the lowest ratio. That’s a huge increase in risk of for the most common cause of death!

In contrast to our national wars on smoking and high cholesterol, you hear nothing of our battle plan for reducing elevated TG/HDL levels. Since a high TG/HDL ratio is a surrogate marker for elevated insulin, you can see why I was making my plea to launch a national war on elevated insulin many years ago. (MSM won't pick up former MIT lipid researchers debunking their profitable deceptions)

A cash cow based on bad science

"One recent article has studied all the published studies with some 65,000 patients who had high cholesterol but no evidence of heart disease to see the effect that statin drugs have on their mortality (2). The answer was virtually none. In fact, in all the statin trials published since 2005, there has been a striking lack of benefits in populations that simply had high cholesterol levels but no evidence of any cardiovascular disease"

De Lorgeril M, Salen P, Abramson J, Dodin S, Hamazaki T, Kotucki W, Okuyama H, Pavy B, and Rabaeus M. “Cholesterol lowering, cardiovascular diseases, and the rosuvastatin-JUPITER controversy.” Arch Intern Med 170 1032-1036 (2010)

"The drug industry developed a great marketing pitch for statins: “If your cholesterol is high, you are going to die”. Unfortunately, the data never supported that spiffy slogan. Epidemiological studies do indicate that if your cholesterol levels are high and you are less than 50 years of age, then there is an increased risk for mortality. After age 50, that risk of increased mortality with high cholesterol disappears"

Rise P, Ghezzi S, and Galli C. “Relative potencies of statins in reducing cholesterol synthesis and enhancing linoleic acid metabolism.” Eur J Pharmacol 467:73-75 (2003)

"The best way to reduce the production of “super-sticky” LDL is to reduce blood sugar levels. This helps explain why individuals with diabetes are two to three times more likely to develop heart disease. The best way to reduce elevated blood sugar is the Zone diet. That’s why the latest dietary recommendations for the treatment of diabetes by the Joslin Diabetes Research Center at Harvard Medical School are essentially identical to the Zone diet."

Tue, 02/05/2013 - 00:51 | 3215527 TruthInSunshine
TruthInSunshine's picture

It's the great statin scam, a multi billion dollar annual theft, sponsored by Deep Capture & Big Pharma. The pharma/medical establishment has intentionally tortured the data to do that old correlation = causation Jedi mind fuckery:

Americans derive 33% of their calories (in the form of refined sugar) from sugar-saturated beverages, on average.

Sugar and simple carbs are far more a health threat than saturated fats are, given that regular intake leads to the dreadful pancreatic stress known as the insulin spike roller coaster, where your body has to produce more and more insulin, at more frequent intervals, in order to regulate blood sugar levels, which leads to insulin resistance (and then Type II Diabetes as well as other serious, adverse cardiovascular and even pulmonary conditions).

Google Gary Taubes if you want to learn more about how the medical establishment and big pharma have either unintentionally or intentionally led people down the causation/correlation trap with their conventional theories on LDL cholesterol causing cardiovascular disease, rather than being a consequence of it. Cholesterol is produced in response to high C-reactive protein levels, aka inflammation. Statins?  They reduce inflammation. They do not prevent it.

Inflammation is the most under-appreciated cause of disease, whether cardiovascular or otherwise, in current times, and it's the primary cause of that which is mistakenly attributed to high LDL cholesterol levels.

Cut out the sugar & simple carbs (especially in the form of soda and refined/processed foods), do moderate exercise. and you'll do more to improve your health than 100 years of taking statins and cutting out saturated fats will ever accomplish.

Remember when "they" told us eggs were bad for us? Remember the hundreds of other things that were allegedly bad, but since have been proven to be actually good? Remember when there was no mention of sugar intake as inducing highly inflammatory and insulin adverse systemic consequences and changes?

Fri, 02/08/2013 - 00:31 | 3225141 All Risk No Reward
All Risk No Reward's picture

Truth, it is funny how all these hoaxes all increases profits of Big Finance Capital.

Not a single establishment hoax benefits the chumptocracy at the expense of Big Finance Capital.

Thanks for the links.

Eggs are a tough one.  The egg white is excellent (organic), but the yolk has some good points and some bad points.

The yolk is high in nutition value (good), but also high in arachidonic acid - the precurser for pro inflammatory eichosanoids.

I love the nutrition, but I don't like the arachidonic acid.  For healthy people, moderation is good - I might toss one yolk for every two eggs (tossed yolk ends up in the garden eventually).

Anti-Inflammamtory Medicine Monograph

Everyone should also note that statins damage your brain, they promote diabetes and they don't even extend your life unless you are 47 and under and have already had a heart attack.

Fish oil is worth looking into.  Not health food store fish oil - that's not the good stuff.

OmegaRX (children can easily ingest the liquid)

OmaPure (about 40%-50% the cost and the quality is similar)

You get a volume discount with OmaPure.

Tue, 02/05/2013 - 01:13 | 3215562 Curiously_Crazy
Curiously_Crazy's picture

"... you hear nothing of our battle plan for reducing elevated TG/HDL levels"


If you're a Pilot you sure as heck do. It's up there with a dozen or so other things they test for annually as part of your bloods in order to maintain a Class 1 medical. 

Great post btw.

Tue, 02/05/2013 - 06:47 | 3215783 Sudden Debt
Sudden Debt's picture

instead it’s making loans to high-net-worth customers at rates lower than a typical mortgage,


Well, Obama is doing what he said he would do. Dividing the spoils of war between his citizens.

Of course the slaves won't get anything. Unless paying takes is something of course :)




Mon, 02/04/2013 - 19:08 | 3214697 hannah
hannah's picture

6-8% is pure bullshit. no way these people are so damn efficient. they might be making negative 6-8%.....

Mon, 02/04/2013 - 19:54 | 3214850 Citxmech
Citxmech's picture

They're trying to scam folks who have portfolios with a pulse.  Sucker them into the new housing bubble using low interest rates and the "recovery"as a carrot, and then the marks sign their portfolio over as collateral.  When the bubble pops - Profit!

Mon, 02/04/2013 - 23:27 | 3215374 DR
DR's picture

JPM isn't keeping the homes..they are selling them to the investors at a markup.

The investors are taking the risk, not JPM who is in the business of flipping assets for a profit...



Tue, 02/05/2013 - 00:18 | 3215482 All Risk No Reward
All Risk No Reward's picture

>>JPM isn't keeping the homes..they are selling them to the investors at a markup.<<

I think you mispelled "taxpayers" as "investors."  Unless we are investing in toxic trash...  then you have a point.

A blast from the gang bankster past...

"Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the [homes and] breadstuffs of the country. When you won, you divided the profits amongst you [essentially tax free], and when you lost, you charged it to the bank tax payer. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out!

- From the original minutes of the Philadelphia committee of citizens sent to meet with President Jackson (February 1834), according to Andrew Jackson and the Bank of the United States (1928) by Stan V. Henkels - online PDF

We are such chumps - they are running the very same con game on us for almost 200 years.  They did learn they needed to hijack and capture the government in order for their plans to work out.

D*mn we are chumptocracy.

Tue, 02/05/2013 - 08:56 | 3215892 thewhitelion
thewhitelion's picture

And 30 days to rehab?  Not likely in my experience.

Mon, 02/04/2013 - 19:09 | 3214702 Muppet Pimp
Muppet Pimp's picture

You actually hate capitalists don't you Mike?  Don't hate the players hate the game.  Slumlords is a grossly inaccurate description of what is going on.  For one, they are not buying slum property, they are buying nice income producing property and getting out of the stock and bond markets.  You and Stockman (both lefties) are wrong.  Time will tell.  I cannot for the life of me figure out why TD posts some of your lefty garbage here.  Your pieces show a disdain for capitalism sir.

Buy real estate, buy businesses, buy apartment buildings, buy commercial space, buy industrial parks, and of course, buy gold and silver bitchez...

The great rotation out of paper begins...

Mon, 02/04/2013 - 19:15 | 3214720 fonzannoon
fonzannoon's picture

How many capitalists, other than the banks, have the unlimited backing of the fed? What money are they using to buy these properties with. Are you for real? Get a clue man.

Mon, 02/04/2013 - 19:33 | 3214741 Muppet Pimp
Muppet Pimp's picture

High net worth individuals are getting out of paper and into assets.  JPM the bank is not buying the properties, their clients are sir.  I have a clue.  This is PE money, banks are not going out buying properties.

Go buy yourself some overpriced stawks and STFU.

Further, who are the slumlords?  They are lefties, often 'constitutional lawyers' and 'civil rights lawyers' who use .gov programs providing 'free shit' to minorties to use them as rent producing property aka slaves.  See Chicago for the outcome of these schemes.  The very same lefties are the ones who now feel a need to take our guns to try to stem the mess they have created in inner cities.  The lefties are nothing but trouble when given enough time and rope to hang themselves.

Mon, 02/04/2013 - 19:43 | 3214779 fonzannoon
fonzannoon's picture

LOL Now I see why your name is muppet.


Go enjoy your steak and wash that blue pill down with some merlot.

edit. as long as we are clarifying..

" instead it’s making loans to high-net-worth customers at rates lower than a typical mortgage, and using their investment portfolios as collateral. That provides people the capital to purchase investment properties, he said."

The high net worth people are not moving from paper to real assets. That would imply they are using their own money. They are borrowing money to do this. So if/when it goes bad they stick the bank with the loan and the banks turn and ask for a bailout....all in the name of capitalism, according to you.

Mon, 02/04/2013 - 22:01 | 3215201 Muppet Pimp
Muppet Pimp's picture

A bunch of posts are all hung up on JPM.  They are latecomers to this party, this party started awhile back.  I am no fan of JPM, hey just happen to be in the article Lefty Mike references.  This is simply a way for high net worth individuals to diversify, and it creates jobs so I am all for it. 

This scheme creates jobs for realtors, maintainance men, janitors, lawn care folks, etc. I like that.  I like it when my fellow citizens get jobs and prosperity and a sense of self worth by earning a living, just as much as I hate it when Obama ruins good people who fell on hard times by offering the good life for refusing to return work (I have firsthand knowledge of this, and a party that was willing to be interviewed to tell his story, but guess what, the lefty press would not do it, because it looked bad on Obama).  Shame on you Scott Maxwell of tribune publishing for only doing stories that suit your bias. 

And those hung up on the 8% are not giving any credence to the fact that when the properties sell there will be capital appreciation.  No, no captial appreciation in your unionized commie northern shithole cities, but these folks are not buying properties there.  It is often like the f'n twilight zone in here. 

Please junk this post profusely, show me you mean business.

Mon, 02/04/2013 - 19:54 | 3214838 Widowmaker
Widowmaker's picture

PE Money - LOL!

What part of bailout money don't you fucking understand?

You will be covering any loss at 100 cents/dollar.

Mon, 02/04/2013 - 19:47 | 3214808 Widowmaker
Widowmaker's picture

Agreed.  Widowmaker can smell the stench before the ink is applied.

We're paying for their food, soon their rent, too.

Liberal government loves a free lunch.  This is nothing but ANOTHER bailout in housing, starting with a floor on crooked prices.

Dimon is going to lose his ass in advance and put it right back on the taxpayer.

Mark this post. 

Fri, 02/08/2013 - 00:17 | 3225135 All Risk No Reward
All Risk No Reward's picture

Anyone who uses the term "capitalism" to describe our system doesn't properly understand our system.

The capitalism is simply an overlay over Debt Money Tyranny.  The latter systematically, criminally and covertly transfers the wealth of the citizenry to the criminal financiers that set up Debt Money Tyranny.

This has been mapped out in Debt Money Tyranny:

"For the love of money is a root of all kinds of evil"
1 Timothy 6:10

Of course evil is going to lust after the control of money.

The most sophisticated and ruthless group of evil will be successful.

We live under financial tyranny with a capitalist over lay that will legitimize the tyranny in the eyes of people who don't know how the system works.

The world is being slayed because the average person can't creatively apply 5th grade math.

Truth is stranger than fiction.

Mon, 02/04/2013 - 19:16 | 3214726 francis_sawyer
francis_sawyer's picture

@Muppet Pimp


Real Estate prices are still inflated [& encumbered by tax obligation]... Gold & Silver are 'suppressed' [pricewise] & unencumbered...

Mon, 02/04/2013 - 19:22 | 3214749 Muppet Pimp
Muppet Pimp's picture

You should own both, and in my area (FL) prices are not inflated.  150k (<600 per month mortgage) gets you 1200-1600 month rent.  Do the math.

Mon, 02/04/2013 - 19:49 | 3214825 fonzannoon
fonzannoon's picture

Muppet you made great points on the stockman thread. In case you see it here and not there. I agree with most of what you say. The only aspect I have a problem is, is calling this capitalism. For whatever it's worth.

Mon, 02/04/2013 - 20:41 | 3214977 espirit
espirit's picture

I also live in FL.  They're sidestepping the taxes on these foreclosures and the local governments are sucking wind to the point of infrastructure failure.

This is a last desparate attempt at finding suckers to take down.

Mon, 02/04/2013 - 20:44 | 3214983 espirit
espirit's picture

Oh, and watch out for mortgages tied to inflation. The new game in town.

Mon, 02/04/2013 - 20:00 | 3214870 Mark123
Mark123's picture

As long as the Fed is crushing interest rates and the government is guaranteeing all mortgages in one way or another ALL real estate is overpriced...even in places where it is considered cheap.  That $150K property might only be worth $20K (remember that your govt is borrowing about 40 cents of EVERY dollar it spends, and continues to ignore all the social program commitments).


Ask much income depends on government?

Mon, 02/04/2013 - 19:11 | 3214708 MFLTucson
MFLTucson's picture

The Jewsih crime syndication once again shows their greedy pig mentality!

Mon, 02/04/2013 - 20:13 | 3214843 tbd108
tbd108's picture

JP Morgan people are generally Episcoples. The Goldman Sachs partners are more Jewish. If you're going to be a piece of crap, bigoted, half-witted jackass, at least try and get your facts straight. Also, you misspelled "Jewish." Are we educationally challenged?

Mon, 02/04/2013 - 20:40 | 3214957 francis_sawyer
francis_sawyer's picture

Actually ~ tbd108 is generally correct [if you look at the stark beginnings]


The JP Morgan crew more or less lined themselves up with the 'Philadelphia $$' [Drexels, Harriman's, etc]... While Goldman became an offshoot of the Kuhn~Loeb, Lehman, Warburg types...

But that's all just a TECHNICALITY... After 1907 [& more importantly, 1913], they're in bed together... More importantly ~ it has ZERO to do with 'religion' [as I've said constantly]... It's about attitude...

All the REAL profits have been made since 1913 because PRINTING MONEY is the franchise...

& anyway... calling 'JP Morgan people' [Episcoples]... is like calling the Clinton's 'Hare Krishna's'...

Mon, 02/04/2013 - 20:49 | 3215001 tbd108
tbd108's picture

I generally agree. However it not fair to the Hare Krisna's to associate in any way with the Clinton gang (an offshoot of the Chicago mob ... which interestingly is where Obama comes from). Also, however hypocritical they may be, many of the JP Morgan people do attend Sunday services as do many of the Goldman Sachs people do on Friday nights). Perhaps there is some good even in rat's nests.

Mon, 02/04/2013 - 21:29 | 3215102 francis_sawyer
francis_sawyer's picture

Yeah ~ I stuggled with coming up with a 'Clinton' analogy [so I went with the most absurd thing I could think of]... Anyway ~ they're practically in a class all by themselves...


I'm not sure if I'm totally accurate with this assessment... But I'd most LINK them to the 'Bush' clan [which is an offshoot of the Harriman's ~ & therefore would put them in the Morgan camp]... The 'tribes' have somewhat intermingled...

It's really not unlike what the Hapsburgs achieved for century upon century [in Europe]...

Note: The 'Bush Clan' distinction is largely formulated upon the Arkansas drug running for Poppy Bush's CIA syndicate... That's the best I can do...

Mon, 02/04/2013 - 19:11 | 3214710 sangell
sangell's picture

8% return means if you have one month of unpaid rent or vacancy you get 0% return!

Mon, 02/04/2013 - 19:46 | 3214811 socalbeach
socalbeach's picture

That's not right.

For example,

3,500/month rent, 2,500/month expenses, 150K purchase price.

Yield = 100*12*(3,500 - 2,500) / 150,000 = 8%.

One month vacancy means,

Yield = 100*(11*3,500 - 12*2,500) / 150,000 = 5.67%.



Mon, 02/04/2013 - 19:53 | 3214836 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Math is like hard.

Does that expenses include paying for someone to maintain the place?

Mon, 02/04/2013 - 21:06 | 3214924 socalbeach
socalbeach's picture


(Bonus points for the first person to post under what conditions the return goes from 8% to 0% with one month vacancy.)

Mon, 02/04/2013 - 21:41 | 3215114 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Expenses increase on average by about $708.33 per month or a one shot expense of $8499.96 somewhere during the course of the year.

Mon, 02/04/2013 - 21:54 | 3215155 socalbeach
socalbeach's picture

Right answer, but not the question I meant, which was Sangell's post,

"8% return means if you have one month of unpaid rent or vacancy you get 0% return!"

which is in general wrong.  But it's correct if a certain condition is satisfied, which is ...

Mon, 02/04/2013 - 22:50 | 3215284 MisterMousePotato
MisterMousePotato's picture

There is something that strikes me as delusional about thinking that someone is going to pay $3,500 a month to rent a $150,000 residence. Wouldn't that person be in a position to buy? Wouldn't that person be better off staying with relatives or in a trailer for a year or two or three (I lived in a tent for years) and save their $3500 a month, and just buy something for cash?

I mean, $3500 a month adds up to some real dough pretty quickly. And, a penny saved is a penny earned.

Shit, I really can't see half the country reliably coming up with half or even a quarter of that - absolutely not without government assistance, or without splitting the rent with a dozen amigos.

Mon, 02/04/2013 - 23:10 | 3215318 socalbeach
socalbeach's picture

It was just an example to show that sangell's post wasn't correct,

"8% return means if you have one month of unpaid rent or vacancy you get 0% return!"

It turns out that the only way for his statement to be correct (sorry for giving away the answer to the question I posed above) is for the yearly rent to be 96% of the purchase price, and yearly expenses to be 88% of the purchase price, which is basically impossible. If you don't believe me plug in yearly income numbers less than 96% of the purchase price, set the expenses and the purchase price to get an 8% yield, and you will get a positive yield even with a 1 month vacancy.

I realize most ZHers are bearish on real estate, but there's no reason to overstate the case with bogus statements (sangell's post).


Mon, 02/04/2013 - 23:30 | 3215384 MisterMousePotato
MisterMousePotato's picture

Well, yeah, but aren't you assuming an unrealistic rental rate to make your point? Based on your numbers, if the rent was half as much, you'd lose $750 each and every month even without a month of vacancy. And even $1750 a month ain't exactly cheap. That, too, would add up to some dough if one could save it for a couple/few years.

Mon, 02/04/2013 - 23:56 | 3215446 socalbeach
socalbeach's picture

Yes my original example was unrealistic and in retrospect caused confusion. I often feel rushed to make comments before everyone goes onto a different thread.

Around here you can't get an 8% yield, but a townhome I purchased in 1996 for $160K had rent of $1,200/mo.  Using understated expenses of $133.33/mo would have given a yield of 8%.  Missing 1 month's rent would have lowered the yield to 7.25%.

Tue, 02/05/2013 - 00:15 | 3215477 MisterMousePotato
MisterMousePotato's picture

I get it. Part of the problem was that I was not thinking in terms of an outright cash purchase. I wonder if Sangell wasn't doing the same, which could seriously affect the viability of the investment, irrespective of yield; skews the thinking if not the numbers.

Tue, 02/05/2013 - 00:53 | 3215511 socalbeach
socalbeach's picture

Maybe, didn't think of that. What I thought is that since 1/12 = 0.0833, close to 8%, without writing down the equations, it might seem that if you have an 8% yield and you lose 8.3% of your rent, you'd have about a zero yield.  Plus he didn't mention an interest rate or a LTV ratio.

You did bring up another good point in one of your posts, that under certain circumstances (8% yield) it would be better to buy than rent.  If you can get a 30 year loan at say 3.5%, and the rental yield is 8%, that means in theory you could make 4.5% financing the whole place with nothing down (not counting principle repayment).  That might be possible if you had an unmortgaged primary residence with a value greater than the rental.

Since interest rates are so low now, I actually do count principle repayment in the calculation however.

A big caveat at least for me though is that I don't want to purchase rentals that cater to the lower incomes, not because there's anything wrong with them, but they're getting squeezed with rising prices and stagnant nominal incomes.  So an 8% yield that would rent to the upper middle class, in a desirable coastal area, would never happen around here at least.

Another possibility is to make a hard money loan with one of the brokers that does that, and you can get 9%/year on those.  It has a similar problem though, most of those properties are rented by lower incomes, so there is some risk their rents would decrease significantly, and you'd be stuck with the property.  It might be safer than buying one of the 8% yield properties though, since they only loan at about 60% of value.  See the Norris Group website if interested.

Tue, 02/05/2013 - 19:23 | 3218104 MisterMousePotato
MisterMousePotato's picture

Thanks. You know ... one would have to sit through a semester's worth of classes at Wharton to learn what you just taught me. Thank you.

Mon, 02/04/2013 - 19:13 | 3214716 lindaamick
lindaamick's picture

I guess the Fed will have to bail these guys out sooner rather than later.

Anybody with a brain knows that houses require ALOT of maintenance AND are labor intensive to rent and service renters.  Moreover, many of these homes have been foreclosures and have sat for some time allowing for rot and systemic problems. 

These guys will go in and buy these properties, try and get suckers to invest or buy them and either get out before the crash or make their admin money and get a bailout at 100 Cents on the dollar later when the whole endeavor goes south.

Anymore, these guys who have access to free money don't even have to think about outcomes or consequences.

Great Life.


Mon, 02/04/2013 - 19:49 | 3214828 HyperinflatmyNutts
HyperinflatmyNutts's picture

Lets also not forget that these BANKSTERS will undoubtly bet using weapons of mass destruction on the other side of the Housing rental scheme "Derivatives can be used either for risk management (i.e. to “hedge” by providing offsetting compensation in case of an undesired event, “insurance”) or for speculation (i.e. making a financial "bet").  They will prop it up and take it down to the tune of massive profits.

Mon, 02/04/2013 - 19:53 | 3214847 Mark123
Mark123's picture

This was done just to juice the market.  These guys have NO intention of staying in the house rental business!!

Just like every other "solution" they come up with, it is all about building confidence so people will speculate and drive prices up.  How fucking stupid is that???  What this country needs is cheaper asset prices, smaller government and wayyyy lower taxes, jails filled with bankers and politicians, a constitution that is respected and an educational system run by the people.  Also, a work ethic might be nice.

Mon, 02/04/2013 - 22:17 | 3215227 DR
DR's picture

JPM is going to sell these houses to the 10 million+ illegals that can become homeowners once Obama gives the ok to full citizenship. Watch for JPM/Blackrock calling for a government backed Hacienda Equal Opportunity RMBS program in the near future.

Mon, 02/04/2013 - 19:15 | 3214725 Black Markets
Black Markets's picture

Housing recovery has nothing to do with economic growth. Housing recovery is just inflation.

Housing investment is inflation protection.

This is ZIRP, no growth but markets rise regardless. Why? Inflation.

Do not miss out on rising markets whilst you wait for growth to return. We don't need growth for markets to rise. Inflation will take us higher. It has to. Cash is crashing.

There's a currency war out there!

The race to the bottom pushes all asset prices higher.

JPM are making out on the big inflation trade. Real rates are negative. It's the easiest trade ever. No need for growth. Just avoid being diluted whilst you hold cash.

Get out of cash and into assets, there's a decade of this central bank bullshit still to come. They are taxing savers via inflation.

Mon, 02/04/2013 - 19:19 | 3214738 RationalPrepper
RationalPrepper's picture

Hmmm...wonder how much money has gone into housing in 2012, that in 2009-2011 went into gold (or GLD)...Maybe that's how "they" are keeping PM prices down...people are blowing into rental properties instead.  Disclaimer:  I don't know anything.

Mon, 02/04/2013 - 20:10 | 3214840 moonstears
moonstears's picture

I think it's constant, this may be the genesis of the housing reflate. I thought they'd have to drop another 20%, seems now the bubble simple paused while falling due to keeping houses off the market which should have forclosed, and awaiting this development. This is why we had all those bank mergers 2011-to see what/who'd sell to the big boys. Un-fuckin-believable! HNWIs doing this on their own might be smart, but being a muppet to Dimon?... DON'T!!(of course taxes must be considered in inflation)

Mon, 02/04/2013 - 19:17 | 3214729 1eyedman
1eyedman's picture

6-8%, yes some closed end funds plus some puts will get you more with more liquidity.    i bet those renters will leave those homes in nice shape once they know JPM is the true owner...if they know.


there was a post on here several weeks ago wherein it named blackstones property mgmnt company.  i checked it out and looked at the houses here in fla for rent, they were almost all the exact same rent, 1300/month  for nongated, nonpool home and urban, lock-your-car-doors at night areas in broward county (ft lauderdale).   that rent is priced to perfection, and if 8% is all thats left, i would pass.   even carlton sheets says you should yeild well into the teens, if not 20%, in order to cover your op costs.    

Mon, 02/04/2013 - 19:17 | 3214732 RationalPrepper
RationalPrepper's picture

"This. Will. Not. End. Well."

-->For who?  The investors/speculators, those who buy (to rent) on their own, renters, or those that would like to buy a home to live in and make their own (i.e., not as an investment).  My money says the investors/speculators (aka, banks and their wealthy clients) do just fine.  If they don't, they'll get bailed out.  This is bad for those that need/want to rent, and those that would like to buy responsibly. 

Will I be able to buy with cash (or a few ounces) if I sit this out and watch it fall apart?

Mon, 02/04/2013 - 20:18 | 3214737 HoaX
HoaX's picture

You should take an example out of Europe, Jamie said so:

On a more serious note, and sorry for repeating myself, but if you haven´t seen it yet, you might wanna watch PBS Frontline 2013: The Untouchables

Mon, 02/04/2013 - 19:23 | 3214751 WhiteNight123129
WhiteNight123129's picture

Watch out zerohedgers, It looks like we might have a retracement on the short Treasuries trade.

We are overdue for a risk off episode.



Mon, 02/04/2013 - 19:23 | 3214752 grunk
grunk's picture

The next step will be to influence local governments to restrict additional construction projects. Gotta to protect the market.

Agenda 21 anyone?

Mon, 02/04/2013 - 19:50 | 3214799 FEDbuster
FEDbuster's picture

Cornering the supply of 1500 sq. ft. "mansions", compared to the 600 sq. ft. maximum sized cages Agenda 21 calls for.

Mon, 02/04/2013 - 23:13 | 3215337 Falconsixone
Falconsixone's picture

I think even the yuppy earth muffins will tire of that over a few ...Oh well they deserve it and after the plumming, electicity and heating gets old and is not repaired they should learn to love their masters boot up their ass every hour.

Mon, 02/04/2013 - 19:28 | 3214764 Piranhanoia
Piranhanoia's picture

Notice that the states are the ones where both the judiciary and the legislatures were purchased to create laws that don't allow the rightful owner to get their homes back when fraud is proven?

Mon, 02/04/2013 - 19:29 | 3214766 ILikeBoats
ILikeBoats's picture

I remember in 2008, reading about cramdowns, HAMP etc. and thinking "this is the end of private property in America" ... I was right , but also very wrong - the Fed will print up money for free and give it to its favorites, and THEY will end up owning everything.

Mon, 02/04/2013 - 19:45 | 3214806 FEDbuster
FEDbuster's picture

I am starting to have more respect for the guys whom burned their places down, or poured cement down the sewer lines. 

Mon, 02/04/2013 - 20:06 | 3214860 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

You maybe onto something concerning fucking the banks on their shadow inventory of foreclosures.

I can see a spate of fires due to faulty electrical wiring or colonies of homeless people along with ebt zombies making use of adverse possession to take shadow foreclosures (ones off the market with nobody living in the house) in the name of humanitarian aid purposes.

Mon, 02/04/2013 - 19:32 | 3214767 CheapBastard
CheapBastard's picture

<<if you just buy a home, collect the rent and do whatever you need to do on the cost side, you’re getting a return of somewhere between 6 percent and 8 percent,”>>


All great until you run into an angry renter who damages your rental unit (house/apartment) to the tune of $18k.  Sangell above is right. $18 hit wiped out all my profits since I bought the place and it was a bitch to sell it in this "hot" market.  I know, I been there. No fun being a landlord.  

This sounds like another example of The Greater Sucker Theory. Some banks have millions of empty boxes they have to whyt not package up (like all those AAA+ subprime laons on 2004-2008) and sell them to the  Biggest Suckers they can find... those willing to ante up $5 mill or more.

Mon, 02/04/2013 - 19:32 | 3214776 alien-IQ
alien-IQ's picture

Looks like they've run out of poor and middle class people to fleece and now they are focusing on the 5mil+ crowd. This should get real ugly real soon since that crowd is not particularly sizable.

Mon, 02/04/2013 - 20:01 | 3214871 tip e. canoe
tip e. canoe's picture

working their way up to the top of the Pyramid, aren't they?  

not much farther to climb until they get to cannibal stage.

Mon, 02/04/2013 - 19:41 | 3214795 Meat Hammer
Meat Hammer's picture

And guess what?  We, the big banks, have zero risk because you dumb asses (the sheeple, not ZHers) will believe the too-big-to-fail bullshit and bail us out again.  Privatize profits, socialize losses.  

Fuck you, motherfuckers.  Rot in fucking hell for eternity.

Mon, 02/04/2013 - 19:44 | 3214801 Boxed Merlot
Boxed Merlot's picture

All that fannie / freddie crap Ben's been picking up for nothing and passing off to his constituency is being sorted through like Dave Hester sorting chattle in a storage wars episode.  Finally making it back out to the market. 

These thieves should be thrown in prison, first for destroying the market, then for picking over the dead and selling their shoes.

Mon, 02/04/2013 - 19:46 | 3214810 Mark123
Mark123's picture

I can't belueve that any large corporation is interested in being landlords of houses (apartment blocks yes, but not actual houses).  I think this was done as a last ditch effort to jump-start the housing market by reducing the stock of homes on the market.


They will sell back into the market on its way up....that is what they do best after all!

Mon, 02/04/2013 - 19:46 | 3214814 Its_the_economy...
Its_the_economy_stupid's picture


I have been involved in managing 25 single family homes. You talk about a BITCH! These poor folk will be lucky to get out w equity invested. The tenants will eat them up. If you're not on top of them day and night you are toast. Think you can pay some property mangement punks to ride that bronco. Think Again!

If you aren't looking out for your own capital, you don't have the energy to ride that horse.


Mon, 02/04/2013 - 19:57 | 3214853 francis_sawyer
francis_sawyer's picture

Reminds me of a goddamned paper route I had as a kid... I'd deliver papers to their doorstep [rain, snow, cold, whatever]... Fucking bastards would hide behind the blinds once a month when I rang their doorbell to collect the $5 bucks they owed for their service... [& I was on the hook to pay the supplier]...


I switched to babysitting real fast... Babysitters NEVER get stiffed...

Mon, 02/04/2013 - 19:47 | 3214819 williambanzai7
williambanzai7's picture

The $5 million figure is the mark of a sophisticated muppet.

Mon, 02/04/2013 - 19:53 | 3214848 misnomer
misnomer's picture

Up here where I live, rental house = grow op.

Good luck getting 8% ROI after that happens.  Rich people are too busy to check on their tenants, and that's what they count on, not some Mom & Pop local that keeps a keen eye on his investment.

Oh well, carry on rich folk.


Mon, 02/04/2013 - 19:58 | 3214858 devo
devo's picture

Community Chest

Bank error in bank's favor. Fork over everything.

Mon, 02/04/2013 - 20:05 | 3214881 grunk
grunk's picture

J.P. Morgan rents to Mr. and Mrs. Cletus.

Mr. Cletus gets a disability check and Mrs. Cletus gets afdc and SS for her grandaughter from a previous marriage. They all get food stamps.

Mr. Cletus gets drunk because the 49ers lose and starts beating on Mrs. Cletus. Cops get called and Mr. Cletus goes to the county jail.

Mrs. Cletus runs to the bail bondsman and pays him with Mr. Cletus's disability check (which is used to pay the rent). "Earle's not a violent man."

Do you think some Wall Street lawyer is getting money from the Cletus family this month?

Subprime rentals.

Mon, 02/04/2013 - 22:43 | 3215268 DR
DR's picture

The $5 million client crowd has no idea of how people like the Cletuses can destroy the existing value of a neighborhood. Good renters leave and good luck selling your property...

Mon, 02/04/2013 - 20:20 | 3214897 devo
devo's picture

To me this is a clear sign that interest rates will not decline for 5+ years, though. It takes a while to sell a house (especially in this market) so the "buyers"/insiders need time to (a) make their profit and (b) dump it onto some sucker once they get inside info that rates are set to rise. Seems that will take 5 years. Bullish for gold. Hilarious pundits are saying no need for gold now. doh.

Follow me on twitter: ludwigvonfeces


Mon, 02/04/2013 - 20:12 | 3214902 Waterfallsparkles
Waterfallsparkles's picture

Biggest problem is that most Tenants today are Subprime. 

Mon, 02/04/2013 - 20:19 | 3214922 q99x2
q99x2's picture

Give the January 20th prayer vigil a chance to work. Timing is a crucial part of future events.

Mon, 02/04/2013 - 20:37 | 3214968 ramacers
ramacers's picture


Mon, 02/04/2013 - 20:43 | 3214982 The worst trader
The worst trader's picture

Let me get this straight, we have a housing bubble, a equity bubble, bond bubble, commodity bubble, what did I miss?

Mon, 02/04/2013 - 20:51 | 3215005 FEDbuster
FEDbuster's picture

Gun, ammo and silver eagle shortage.

Mon, 02/04/2013 - 23:38 | 3215401 MisterMousePotato
MisterMousePotato's picture

Did you know that Double Bubble was invented in the thirties by an accountant? Best tasting food stuff ever. If it was nutritious, I would live on it. Well, that and Lay's Classic potato chips.

Wonder who's going to get credit for Quadruple Bubble?

Mon, 02/04/2013 - 20:44 | 3214986 The worst trader
The worst trader's picture

Bullish! BTFD

Mon, 02/04/2013 - 20:53 | 3215012 bankonzhongguo
bankonzhongguo's picture

JPM is doing this for the Section 8 money.  It's the food stamps of housing, but they will be administering HUD before you know it - just like SNAP.

Government subsidized rents are going to buoy RE prices in certain areas.

Food Costs - explode

Health care costs - explode

Housing - more government subsidies more inflation.

In a few years they will own millions of section 8 housing.

Tue, 02/05/2013 - 11:02 | 3216208 FEDbuster
FEDbuster's picture

That has to be the angle they are betting on.  It's the only way this move into single family homes makes any sense. 

Mon, 02/04/2013 - 21:25 | 3215108 barroter
barroter's picture

Be a landlord? God forbid there's asbestos or lead paint in ur home. There's a lawsuit there.  Rent to a loser? Have fun with evicting them as some states will back the renter before you. Also, hope you don't get a psycho renter who glues the windows shut and pours hydraulic cement down the drains.

I thought about buying to rent for a day...then woke up.


Mon, 02/04/2013 - 21:47 | 3215171 The Gooch
The Gooch's picture

Can I hand deliver the "rent check"?


Mon, 02/04/2013 - 23:22 | 3215362 Falconsixone
Falconsixone's picture

No checks......Rent will be blood, beatings and babys...the 3 B's

Mon, 02/04/2013 - 21:53 | 3215185 Seasmoke
Seasmoke's picture

Jamie will be pimpin Meth Houses !!!!!!!!

Mon, 02/04/2013 - 22:53 | 3215261 Number 156
Number 156's picture

What happens when they dont get their promised 6-8% annual return? Stupid Muppets.

Mon, 02/04/2013 - 22:55 | 3215297 Falconsixone
Falconsixone's picture

How did they get money? Couldn't have done that 4 1/4 years ago. I guess they'll have to say they have the hidden houses? Rothsefellers arn't buying a house they can't rent because they've got all the money and are to chicken shit like all their breed to spin the wheel and spread it around at this point because their shits in the wind and they would lose at their own game now. Ha! Fuck You Jew Prick Morgan! Your on your way to hell and you know it so drink up and jump! 

Tue, 02/05/2013 - 00:10 | 3215469 Bobportlandor
Bobportlandor's picture

They'll do the same thing again they will have hundreds of investors for the same house. Then the next collapse will wipe them all out and the bernac lookalike will bail the banks out again.

U have to be a fool to get in the same room with theses guys.

Mon, 02/04/2013 - 23:00 | 3215306 MrBoompi
MrBoompi's picture

They fucked over the entire country with their housing bubble and now it's time to cash in bitchez!

Mon, 02/04/2013 - 23:25 | 3215368 uncle_vito
uncle_vito's picture

I own orange ranches.   I can net $100k a year on a 40 acre ranch worth $900k.   This is slightly better than 10% return.   Cheap property taxes (farm land), cheap insurance  (liability only since no fire hazard.  No need to hassle with renters.

Mon, 02/04/2013 - 23:29 | 3215378 DaveA
DaveA's picture

Heard this recently: "Other landlords used to laugh at me for renting to disabled people. Now their tenants are out of work and months behind on rent, while mine are still paying."

Also, "Do we accept Section 8? Actually, we prefer it, because the rent gets paid on time."

Two Pakistani brothers immigrate to England with their wives and many children. Qualifying for a generous rental allowance, each buys a house and rents it to the other. In twenty years, they'll have scored two free houses!

Another big winner is rental property close to a university. Student loans don't just pay for tuition and books.

And you fools are bearish on housing...

Mon, 02/04/2013 - 23:42 | 3215417 MisterMousePotato
MisterMousePotato's picture

Freud made the same error, you know.

Tue, 02/05/2013 - 08:43 | 3215859 wonderatitall
wonderatitall's picture

it is the way of the cargo cult of obama and the amerikkkan democrat nazi party....just bought a nice fenced in area for a obama "work" camp...rally on

Tue, 02/05/2013 - 00:03 | 3215458 jonjon831983
jonjon831983's picture

You know what`s f`n dumb? I checked out an investment conference and the head economist said US housing is going to be fine because market forces will make it all better... and then he cites how the government owns something like 97% of the market.  And then of course he mentions how pension funds have been snapping up houses as well.  So define "market forces".

I just sat there shaking my head and wondering how many of these rich baby boomers in that room were salivating over the economist's sweet words.

Tue, 02/05/2013 - 00:43 | 3215517 toomanyfakecons...
toomanyfakeconservatives's picture

I'm seriously reconsidering my "Everything is neutral, there is only order and disorder in the universe" stance. Perhaps good and evil really do exist.

Tue, 02/05/2013 - 12:03 | 3216385 WT Sherman
WT Sherman's picture

"Perhaps good and evil really do exist."

Wow! ya think.  Glad to hear someone is waking up to reality.

Tue, 02/05/2013 - 05:07 | 3215748 Me_Myself_and_I
Me_Myself_and_I's picture

Hey real estate never goes down.  They aren't making any more land.  There will never be a better time to buy real esate.  Buy!  Buy more now!  And be happy.

Tue, 02/05/2013 - 12:12 | 3216428 WT Sherman
WT Sherman's picture

The rich get richer, the middle class get poor, the poor sell their votes to democrats for food/shelter/Obamaphones, and everyone except for the rich and their apparatchiks eat shit.

At this stage of the game I wouldn't claim this dire scenario is any different regardless of the party in the Whor...I mean, White House, but it does strike me as funny how democrats are portrayed as the friends of the little man all while tycoons and all types of corporate big shots keep getting richer and owning a bigger slice of the overall pie every single day - even though democrats pretty much run everything in this country.

I know that I'll now be torched by many for making this observation.

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