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Two Harbors Investment Corp. Message Board

  • yelyacs yelyacs Mar 20, 2013 6:29 PM Flag

    Outlook for SBY

    buying, renovating and leasing single family homes in multiple markets like SBY does is a new REIT model so historical performance of peers is not available. I like the idea- scarf up properties (from foreclosures, auctions, MLS listings, other investors, however) fix 'em up and lease 'em. Like being a landlord without having to do anything

    housing is picking up in the US and I wonder if part of the reason why is because institutions like SBY are entering the housing market and putting a floor under prices (SBY operating in some of the worst hit areas- Las Vegas, Tampa, Phoenix etc) . So competition from other new entrants (SBY does not have that much of a moat yet) is one issue

    costs are another-each property will be unique and have its individual issues, so bulk ordering as with multifamily units won't apply. Bulk ordering also is also hgard when one;s proerties are scattered throughout the country like SBY's are

    potential yield is another- wityh no history or peers who knows how SBY will stack up with other classs of eREIT going forward

    I'm also a bit unclear if they mortgage properties or just buy them outright. If they buy outright, thats a lof otf money up front so the ROC will be low. If they mortgage then their results will suffer when rates go up (and they are creeping up already)

    anyone with informed prognosis on whether this is a good looking long term hold or better for a trade??

    (I have yet to form an opinion, may even just sell the TWO I got this am for 13.48 before ex-DIV although I like that TWO said the proceeds could be used to acquire target assets including "...mortgage servicing rights" which would probably be the most accretive use of proceeds

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