When Blackstone Is Your Landlord

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Dec. 20 (Bloomberg) -- Blackstone and a handful of other private equity funds have been buying up single family homes across America at an unprecedented rate. Meanwhile they're rehabbing and renting out these houses to families who've lost their own homes to foreclosures. Bloomberg's Cristina Alesci and Willem Marx repot on Bloomberg Television's "Market Makers." (Source: Bloomberg)

The many on main street that has created a profitable new business for the few on wall street.

That was willem marx.

He is here with us along with cristina alesci.

Willem, we are struggling with whether this is a good thing or a bad thing.

In your experience, did you get a sense for whether it is better to have blackstone as your landlord than some guy who lives a few blocks away?

This week, erik said "di rtbag" on television.

The families we talked to said some of them had difficulties contacting the property management companies for firms like blackstone.

They have to go through call centers as opposed of calling their landlord down the street.

Everyone around the country can't complain about landlords.

The question is, when they are scaling up, are they able to deal with problems that will -- and they provide us is very service?

When blackstone bought this property, the family was facing foreclosure.

They were several months behind.

Their point was that they never received a notification until the day before foreclosure.

That has nothing to do with laxton.

The bank foreclosed upon them.

If it was not blackstone, it would have been another investor.

Who knows how they would have run things.

Food is what kind of communication they would have had.

From blackstone's point of view, not every family is in that circumstance.

In some cases they do by homes that have been foreclosed or abandoned.

They are saying maybe these neighborhoods would have been blighted, we are investing.

Blackstone is in this to make money.

They are going to make a killing on these investments.

There is no doubt about that.

They bought these in very distressed circumstances.

Blackstone is living the american dream.

Erik, could we say where is barney frank?

This family no longer has the opportunity to pursue the american dream.

Barney frank made people believe it was their birthright to own a home in america.

That is the question.

The larger context is really the difference in when you look at the fiscal policies we have had in this country and the content is easing, -- and the quantitative easing, you start to see who benefits.

It has been the upper classes, the investors.

People with money have actually benefited more than people without.

Let the non-american wayeigh in.

Without policies barney frank supported before the crisis, does the marginal buyer exists to soak up demand?

Instead of the private equity firm.

I am not sure.

People want to believe private equity moving in deprives low income americans of the opportunity to live the american dream by building wealth.

If the low income americans cannot get credit, there is no way to build wealth.

I'm not sure that a social crime is being committed.

You have to bear in mind that people are blackstone have access to much cheaper credit.

That is a great point.

Ding, ding.

These are the people who have had very bad credit over the last few years.

It will be difficult for them to borrow.

At the actions, -- at auctions, people do not have the access to cash to buy things on the spot.

They could want to become homeowners or local real estate owners and they cannot when blackstone goes into these small communities.

The banks are more than willing to lend for anything blackstone wants to do.

To put this in context, blackstone has spent $3.3 billion on u.s. single-family homes.

If you look at their overall holdings in real estate, they are diversified way beyond single-family homes.

They are the largest u.s. hotel owner.

The question is should they be this local?

Hang on, "should"? we are talking socially.

What market -- what market is freer than the american housing market?

Anybody can get credit, anybody can apply for a mortgage.

Anybody can bid.

You know -- you start raising questions.

If you have bad credit, that was your own doing.

In large part, that may be true.

The moment we start using words like should is the route we start talking about regulating the housing market.

This opens up blackstone to a lot more scrutiny.

It is really difficult to see them going deeper into this right now.

They are already having to deal with questions that willem is raising about whether or not they should.

Whether or not that should be asked is a different story.

It is difficult for them to go ahead without additional scrutiny.

They will continue to buy homes, not at the clip we have seen.

They were going from 300 homes across georgia over the summer, now they are buying

This text has been automatically generated. It may not be 100% accurate.


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