Tuesday, July 9, 2013

*** Smart Money on Move Again ***

To date, Blackstone has spent $5 billion on more than 30,000 houses – it's the largest housing investor in the U.S. It has said it will slow its home purchases… But Blackstone is still bullish on housing, so it's getting into lending.

Blackstone created B2R Finance to offer minimum loans of $10 million to landlords looking to expand their portfolios. Blackstone would loan 75% of the value of the homes for a pool of leased properties and 65% of the value without tenants. The debt would have floating interest rates between 5% and 7% for up to five years, according to Bloomberg.

Please Enable Images to See this Blackstone is stepping in to take the place of regional banks (the traditional lenders in these instances)… According to the Federal Deposit Insurance Corp., more than 475 banks have failed since the 2008 credit crisis. The remaining banks have tightened lending standards. And Fannie Mae and Freddie Mac – which buy loans from originators, pool them together, and sell them with a government guarantee – limit loans for landlords to 10 properties and four properties, respectively. (And banks are less likely to make loans they can't pass on to Fannie Mae and Freddie Mac… making Blackstone's service more valuable.)

Please Enable Images to See this Investment bank Goldman Sachs estimates the rental housing market is already worth $2.8 trillion. Financing other landlords also helps Blackstone's exit strategy… It can loan money to other folks to take properties off its hands.

1 comment:

Tampa Real Estate said...

Thanks Port & Dr.Sjuggerd