We told you in August that Wall Street was about to get into the business of selling securities backed by monthly rent payments paid by average Joes.
Now the new investment phenomenon has apparently arrived.
Bloomberg News reports that Deutsche Bank may start marketing nearly $500 million in the securities later this week, based on the rent payments from 40,000 single-family homes bought up by the private equity firm Blackstone. The rent payments are being “bundled” together, rated by our favorite credit-rating firms, and voila!
“Securitization is the next step in the evolution of the single-family rental business,” Bloomberg quotes Rob Bloemker, chief of Five Ten Capital LLC, which got a $100 million credit facility from Deutsche Bank in April to buy homes.
Sorry to be so cynical. But we can’t get out of our minds the image of hot shots at Lehman Brothers saying roughly the same thing about mortgage-backed securities before 2008.