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Wall Street Is Buying Starter Homes to Quietly Become America’s Landlord

Private equity money is pouring into the Phoenix real estate market, turning first-time homebuyers into renters.

A selection of Phoenix-area homes for rent from Progress Residential, one of the biggest Wall Street landlords in the country.

A selection of Phoenix-area homes for rent from Progress Residential, one of the biggest Wall Street landlords in the country.

Photographer: Jesse Rieser for Bloomberg Businessweek

Javier Vidana started out as a real estate agent in 2013, when Arizona’s Salt River Valley seemed wide open. It was the aftermath of a housing market crash that had seen the typical home value in the Phoenix metro area fall more than 50%, and a single parent with good credit could tap loan programs geared toward first-time homeowners and find a pretty decent place to live. For Vidana, the challenge was convincing potential clients that a house was something they wanted to own. “We were on the phone begging people to buy,” he says. “There was no buyer confidence whatsoever.”

The economy crawled forward, and the housing market with it. Vidana made a specialty of tutoring young buyers on real estate basics. Soon he was supplementing his commission income by selling how-to PDFs on his website and collecting ad revenue on his YouTube channel. Then the pandemic sparked a boom that gave him something new to explain.