+ Watch SBY
on My Watchlist
Thankfully, we have not learned anything from good old Lizzie Magie! Lather, rinse, repeat.https://en.wikipedia.org/wiki/The_Landlord's_GameSilver Bay is "ramping up investment" just as a lengthy new upswing in land value mania is taking hold. They have very little debt, land values are increasing at 25% per year, and rental properties can be used to pay the minor property taxes and future interest from debt gained later in the great "18 year land cycle".
Remember back in the RE bubble days, when institutions were taking securities backed by real estate and turning them into securities backed by securities (the CMBS craze)? Seems like we've come fully circle here, with SBY buying ACTUAL HOMES.Not much in the way of accounting shenanigans that can happen here, although external management fees may be a concern. As well as the cost of the boots on the ground requirement of actually caring for and renting out these homes. All things considered, though, they are snapping up foreclosed homes at well below replacement cost, renovating them and renting them out. If this model doesn't work due to operating inefficiencies, they can always sell the homes tomorrow at a substantial profit. Despite the risks of economies of scale with this stock, I feel it's a can't lose proposition in the long run.
Silver Bay Reality Trust a first mover, it is the only pure single family residential real estate play that I know of. SBY is will be a great investment because they bought many of their houses when housing prices were at a historical low. Just the increase in book value of the assets alone will give the stock a nice advantage. The second reason SBY will outperform the market is that in the near future unemployment rate will decrease and people will be looking to get out of mom’s basement. I believe vacancy rates will be extremely low as there is a shortage of houses available on the market. This is mainly because there were five years of a drought of new housing starts. The second factor in this part of the equation is the fact that the younger people just entering the housing market are more apt to rent than to buy. We have to look no further than the trend of their not purchasing automobiles as early as generations before this one did. Finally, SBY has economies of scale using their own in house contractors to get the houses rent ready.
Entire leadership team loaded up on shares this week.
This is trading at well below the value of the underlying properties. All they need to do is break even on operating cash flow and the stock will be worth 25% more than it is trading at now.
Real estate company that has bought up homes, leasing them out while housing market continues to go up.
REIT in the developmental stages. Will be profitable in the next 1-2 years and will start providing investors with a comfortable dividend. They just need to stabilize portfolio and then hit a desirable occupancy rate across all of their properties.
Playing the USA residential housing market transforming to rental
Extremely new company, but a REIT - one of my favorite forms of passive income! SBY is a spin-off of Two Harbors Investment Corp (TWO).
After a year or so they should be able to stabilize their assets and start showing a profit.
As unemployment improves with the economy so will the housing market.
makes its money renting out renovated foreclosures in severely real estate ravaged areas...will make a ton of money since the new homes are in short supply and so are decent jobs to pay for them...rising rates further complicate the problem...Spin off from TWO harbors
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