저자: Kevin · 외국인
요약 보기
상원 통과 21세기 주택법안의 '엘리자베스 워런 조항'(350채 초과 기관 보유 시 7년 내 매각)은 하원안에서 삭제 예정이라 실질 영향이 작다고 주장. 기관이 리노베이션·신축으로 공급을 늘리는 경우 영향 없고, 이미 입주 가능한 매물을 사들이는 기관만 타격받는다고 설명. 350채 보유 기관은 전체 임대주택의 0.5% 미만이라 영향 제한적. 보조금 등 주택 구매력 지원책이 포함될 것으로 봄.
다듬은 글
Hey everyone, me Kevin here. The Senate passed the 21st Century Road to Housing Act and next week we anticipate that the house is going to pass it as well. This is leading people on one side of the aisle to say, "Thank goodness, the end of corporate landlords. Corporate landlords will be banned from owning single-family homes and their business models are ruined and they're screwed.
Finally, we can stick it to Wall Street. Finally, this administration is going to do something for affordability." And then people on the other side say, "Wow, I guess we're going to have a lot fewer rental properties if this actually passes, which means there's lower supply of rental properties, rents might actually go up." Those are the main core arguments here, but in this video I'm going to provide facts to you about what just happened, how the bill just essentially got gutted, and it might not actually have the impact as advertised.
Fortunately, because you subscribe to the channel, you will have that insight that you need, so when you hear about it, you can speak in an educated manner about it. So, let's get started. First, the Senate passed the 21st of Century Road to Housing Act back in March. It was a pretty clean plat a pass with an 80 uh it was like an 89 to 10 vote.
It was actually pretty bipartisan. You had both sides of the aisle say, "You know what, we got to put our name on voting for this." In it was what was called the Elizabeth Warren Add-in, and it basically said, "Because we don't want to stop builders or big companies from buying homes that need to be fixed up and then rent it out or building homes that they can then rent out, we're going to say they're going to be able to do that if they own more than 350 properties, but we're going to force them to sell it after 7 years.
We'll give the tenant a first look for the first 30 days, which honestly, quick sidebar on the tenant buying a property, this is actually not that bad of an idea. That's actually pretty good because it lowers costs for the seller and the tenant who could potentially be buying. You can often save on commissions, you can save on other fees related to the sale, and it's overall easier to just sell a property to the person who's already living there.
You don't have to deal with actually marketing the property. There are some downsides. You're not sure if you're actually getting a true fair market value, but that could be a benefit for the tenant, right? But also vice versa, if the tenant is paying a certain price and there's no other offer because the property was never on the market, theoretically the tenant could be paying a little bit more than what the property is worth.
Obviously everybody gets an appraisal, but you don't actually know what a property's true market value is unless it's on the market. So the idea with the Elizabeth Warren add-in was, all right, look, we don't want to discourage institutions from buying fixer-uppers, fixing them, and renting them out, or even better, building homes, building new construction homes, and then renting those out.
And so what we'll do is we'll say, if you own more than 350 properties, we'll allow you to do that, but you have to sell them after 7 years. This freaked out a lot of people from both sides of the aisle in the House of Representatives. So the House of Representatives actually put together a letter, I think about 70-ish members, 76 members or so signed a letter calling this an assault on the free market.
And the House version actually killed the 7-year sale, making the entire bill way less toxic. So, if this 21st Century Road to Housing Act passes. What you basically have is a bill that says, "Hey, if you own more than 350 properties, which mind you is like less than a half of 1% of all rental buyers in the country.
You know, these are really big entities generally. These aren't your mom and pop investors who are, you know, owning their home and then they they move and they rent out the first one and they do that two or three times, right? And then when they retire they end up having three rental properties or four rentals and their own home, right?
Which is a fantastic way in my opinion to build wealth, but that's really a topic for a different video. What's most interesting is that because the house version killed the seven-year sale requirement, most institutions are looking at this and saying, "Huh, that's actually not that toxic of a bill anymore.
In fact, it might not actually change anything." See, a lot of people also, you know, they they hear this act and they're like, "Oh, well well, Kevin, we know you have a real estate startup that, you know, does stuff in real estate." And that's true. We make real estate software and then we reinvest the profits from our real estate software into real estate and we'll continue doing that forever because I'm I'm a big believer in real estate.
Except the kinds of properties we buy are what I call like hantavirus properties. Like you go in here and you swoop up this mold or or like the rat poop, you got a chance of getting the hantavirus and then you got like a 38% chance of dying. It's not good, right? Obviously, I'm joking. We haven't had any properties with the hantavirus in it as far as I'm aware of, but the point is like this is not a livable property anyway, right?
So, when we buy fixer-uppers, whether it's that one I just showed you or I'll pull up another one. We finished both of these last year. Here's just another example of one. Uh you know, these this one's I mean, you don't want to live in this one either. Initially, you look at it, you're like, "Ah, that's livable, right?" Yeah, no.
No, it's just not. Okay? Right? So, whether you do this or you build new, which we also just did, we and you know, we bought a built new accessory dwelling units. We're also building homes from scratch. In both of these scenarios, if the house version of the bill passes, which we actually expect it will, in both scenarios, nothing actually changes for a company that either fixes up a property or builds a property to rent it out.
The companies, those entities that hold more than 350 properties, can still hold these properties forever. The 7-year sale requirement is gone in the house version. The house version released their text on May 14th, and that amendment is gone. On May 18th, there's going to be a vote on the bipartisan bill, which includes the house amendment.
So, we'll see if that ends up staying all the way through, but that's the anticipation that we're going to see that house amendment included, which removes that Elizabeth Warren line. She was the one who added it, and it's that 7-year sale requirement, which means now, if institutions buy a fixer like what I showed you, this was the one that I joked about with the hantavirus, here's the after of it.
If a company invests and buys a property like this and then brings it to the rental market, which it wasn't previously part of the rental stock, they can actually keep the property forever if they want to. You know, at some point, after 27 and a half years, the properties are going to be fully depreciated, and companies are very likely, often actually after 10 years, to sell these properties and do a 1031 exchange anyway.
And even though the 7-year sale requirement is getting gutted out of this bill, the bill is going to include things for uh grants for modernizing homes. That could be for people who own their homes, money to maybe help do energy efficient upgrades or whatever bathroom remodels. To be determined exactly what those grants are going to look like.
Uh there are also going to be grants for converting abandoned homes, like fixer-uppers like this, or converting office space to uh living space. Uh so actually turning them into apartments or condos, and other affordability plans for first-time home buyers. So really, when you look at the bill, the bill is really in my opinion going to turn into a stimulative bill for affordability on housing, some first-time home buyer kicks, incentives, and incentives for developers who build homes.
Who really gets hurt in this is the entity that says, "We're not going to buy a fixer, and we're not going to build homes. We're just going to go buy homes that actually do compete with home buyers, you know, or would be interesting for a home buyer to buy. We're just going to go buy those, throw cash offers at properties that are move-in ready, do no work to it, and rent it out." That's what the bill kills once companies own more than 350 properties.
That's not what my company does. Again, we either buy really bad fixer-uppers nobody's living in, or we build from scratch, which is great because we're adding to supply. And my company's called Reinvest. Uh or House Hack. We've changed the name. Uh but there are companies that do that, and they buy homes that are move-in ready.
They don't do anything to it, and they just sit there and rent it out. So it's no effect to me, and to in my opinion, it's really no effect to institutions. It doesn't really matter. If anything, some of the grants are just going to help make it more affordable to develop or to remodel. Hopefully, we'll see.
Every government policy always has hopes that don't necessarily work out the way hoped. Uh but that said, if you hear this 350 housing restriction, remember, it does kill people buying move-in ready homes if they own more than 350 homes. But, if they're buying a fixer or they're building, it makes no difference and they can still hold the property in perpetuity, forever. If you found this help O'Leary .
Comments 0