It was all the talk several quarters ago; it appeared that Blackstone, American Homes 4 Rent and others were going to educate the American Public on precisely how to deal with the foreclosure crisis. Rosy speeches and flashy Infographics abounded and investors were stampeding down the cattle shoot on their quest to make a dollar on the backs of those fucked in the Sub Prime Crisis. The reality is that Vulture Capitalists have no idea how to manage assets which require human involvement. HousingWire caught up with American Homes 4 Rent and puts it candidly.
A leader and pioneer in the field in field of single-family rental securitizations, American Homes 4 Rent (AMH) reported third quarter earnings per share of $0.15, missing analyst expectations by $0.02, but with revenue for the quarter printing at $110.4 million versus the consensus estimate of $109.2 million.
The company had a net loss of $12.8 million for the third quarter of 2014.
The loss here isn’t really the story and honestly I am not really surprised that HW displayed the growth — at gross level. The real story is that property management is not something that is viable in large swaths. Blackstone knew that all along and even more so when they accepted bids to compete against THR Group LP. At the granular level, the cut throat business model that these gargantuan Vulture Capitalists are attempting to push downward into the real world, are backfiring. The litigation has already begun and ultimately this was one of the reasons Blackstone began to extricate itself from the flip and rent marketplace.
All indicators are down regardless of how HW or anyone wants to spin shit. Construction is down; sales are down — and more on point, the Institutional Cash Buyers bolted; auctions are tanking. The reality is that the feeding frenzy is over and in the same manner which create bubbles, the taxpayers are being positioned for the next Federal Reserve Appointed Bailout.
The problem is that we are in an artificial economy. $2.65 gas here in Knoxville is a prime example. With all the unrest in the Mid East; with the Obama Administration stating that Benjamin Netanyahu is chickenshit; with Putin leveraging petrochemical assets with respect to Ukraine and Europe, the reality is that we should be around $4.50 a gallon here in Knoxville. With respect to the House of Cards the Mortgage Servicing Sector has become, the reality is that we are merely moving from one crisis to another — haven’t heard a peep about sequestration and we are perilously close to having that debate again!
We move, Crisis-to-Crisis, and the reality is that it isn’t a Democrat or Republican issue. There really is no distinction between the two any longer other than the theatrics. We are living in an oligarchy; the reality is that it is financed on the backs of taxpayers. Think I bullshit? Why don’t you read up on some stats about debt from World War I. People, in good faith, invested in war bonds. The UK — and just about everyone else — said, “Gee, we aren’t going to pay you back the principle, but we will pay the 5% interest.” Then, they said, “Fuck you, we are dropping the interest.” Today? Yeah, still paying debt upon WWI. Even the US has been toting crazy debt and fucking people every step of the way.
It’s all a game, but as opposed to how it was shelled before, we live in the times of real time communication and information access. That is being well demonstrated by ISIS or ISIL depending whose flavor you like. Here, a bunch of mullahs are recruiting people to kill domestically and abroad from the creature comforts of their cave and many a time from the comforts of the government supplied housing. Unless and until we change the fundamentals of how money works; the velocity, mechanics, etc., we are doomed to repeat the same Crisis over and over. More on point, though, the 1.8 Million coming down the pike via HELOCs and that translates to 3.6 million people fucked if there are an average of two people per household, gotta wonder where they are going to go?!