Search This Blog

US Real Estate - Is the next game afoot?

US Real Estate - Is the next game afoot?

The game is already rolling.

If you buy a million private home mortgages and tranche them we all know what happens. People default on their mortgage and your tranching scheme fails big time. It crashes and burns. Been there, done that. It almost took down the entire US Economy.

But what if you don't do private homes, you do rental apartments?

Genius. Because there's nothing to default on. You buy a million rental homes and tranche them.

So I buy a million luxury apartments rentals across the US. At an average rent of $4K/month I suddenly have income of $4 billion/month.

But I'm not finished. I take my amazing $4 billion/month asset, securitize it, and sell it as stock to the general public. Tranching just refers to packaging my stuff into securities for public sale.

It's not a case of who wants to rent and who wants to buy.. all I care about is are there enough affluent renters to support my plan. At the moment the answer seems to be yes, absolutely.

And the plan is alrearly afoot.

Now let's do some numbers. If you look at recent sales you'll see that a luxury rental sells in the investment market for around $340K. So my purchase of 1 million units cost me about $34 billion. But it's generating revenue of $4 billion/month. Not too shabby.

Content written and posted by Ken Abbott