Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-65154 Fri, 17 Jan 2020 14:37:44 GMT Why Luxury Units in Manhattan Are Vacant And The Rest of the Country Isn't Much Better http://implode-explode.com/viewnews/2020-01-17_WhyLuxuryUnitsinManhattanAreVacantAndTheRestoftheCountryIsntMuch.html From any rational perspective, what New York needs isn't glistening three-bedroom units, but more simple one- and two-bedroom apartments for New York's many singles, roommates, and small families. Mayor Bill De Blasio made affordable housing a centerpiece of his administration. But progress here has been stalled by onerous zoning regulations, limited federal subsidies, construction delays, and blocked pro-tenant bills.

... as the new houses have become more luxurious, homeownership itself has become a luxury. Young adults today are one-third less likely to own a home at this point in their lives than previous generations. Among young black Americans, homeownership has fallen to its lowest rate in more than 60 years.

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the most expensive housing markets, such as San Francisco and Los Angeles, haven't built nearly enough homes for the middle class. As urban living has become too expensive for workers, many of them have either stayed away from the richest, densest cities or moved to the south and west, where land is cheaper. This is a huge loss, not only for individual workers, but also for these metros, because denser cities offer better matches between companies and workers, and thus are richer and more productive overall. Instead of growing as they grow richer, New York City, Los Angeles, and the Bay Area are all shrinking.

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iehi-feed-65152 Tue, 14 Jan 2020 19:05:46 GMT The Dogs Ate SoftBank's Money http://implode-explode.com/viewnews/2020-01-14_TheDogsAteSoftBanksMoney.html iehi-feed-65151 Tue, 14 Jan 2020 18:58:19 GMT WeWork debacle has unicorn investors seeking protections http://implode-explode.com/viewnews/2020-01-14_WeWorkdebaclehasunicorninvestorsseekingprotections.html A quarterly survey by law firm Fenwick & West, which tracks deal terms of startup clients, showed a sharp rise in those with senior liquidation preferences for later stage funding rounds in the third quarter, the time when WeWork's IPO plan unraveled.

For a graphic on Interactive graphic on liquidation preference clauses in deals, click here

Safeguards include a higher minimum price on shares in an IPO, "ratchets" that give investors more shares if the shares are priced below what they paid, guarantees of a certain return on investments, and rights to block the IPO.

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iehi-feed-65150 Tue, 14 Jan 2020 15:51:10 GMT Private Restaurants for New York's Richest Diners Are on the Rise http://implode-explode.com/viewnews/2020-01-14_PrivateRestaurantsforNewYorksRichestDinersAreontheRise.html ``Sound exciting? Unfortunately, you most likely won't be able to go. While Tavern by WS is open to the public, the space above it -- called simply WS New York -- is reserved for members willing to pay a $15,000 initiation fee, plus $7,500 in annual dues. A brochure for WS New York lures people to join for an "insider perspective on rarified worlds." As one of the club's managers was heard explaining at the party, "Think Soho House, but 10 years older, so 10 years richer and more exclusive.''

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Even harder to infiltrate are the increasing number of enviable dining rooms at high-end condominiums -- like 432 Park Avenue, where esteemed chef Shaun Hergatt oversees the kitchen, or 220 Central Park South, which will house the next New York restaurant from uber-chef Jean-Georges Vongerichten. There, all 54 seats will be off limits to anyone who's not a resident (or guest of one) at the building, where a penthouse sold for $238 million... In fact, exclusive restaurants with high-end chefs are becoming the latest in-demand amenity of luxury condos, according to Stacey Kanbar and Julie Kopel from the Kanbar Kopel Team at real estate firm Compass, who say they've noticed an uptick in the trend among clients looking at new upscale buildings.

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Private dining rooms have become important points of distinction and selling tools for the properties in part because the luxury real estate market in New York is suffering a glut of unsold spaces, says Stephen Zagor, a consultant who teaches restaurant and food entrepreneurship at Columbia Business School and New York University. A recent report found that more than 25 percent of new condos in Manhattan hadn't been sold as of September 2019, including some 40 percent of Billionaires' Row.

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iehi-feed-65148 Mon, 13 Jan 2020 00:02:05 GMT US job creation slowed under Trump in 2019 to the lowest growth in 8 years http://implode-explode.com/viewnews/2020-01-12_USjobcreationslowedunderTrumpin2019tothelowestgrowthin8years.html iehi-feed-65147 Sun, 12 Jan 2020 14:49:00 GMT Retiring Baby Boomers Could Reshape Both Real Estate and Consumer Spending http://implode-explode.com/viewnews/2020-01-12_RetiringBabyBoomersCouldReshapeBothRealEstateandConsumerSpending.html Boomers control 70% of disposable income in the U.S., according to the report, titled Demographic Shifts: The World In 2030. Though a generation that has had its entire working life span to build wealth should be expected to have the lion's share of such income, 70% is too high a number to be merely cyclical, C&W said. Millennials have so far not been able to keep up with their parents' savings patterns due to flat wages and the explosion of student debt.

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Boomers are expected to take a larger share of overall consumer spending in the next five years, rising to 33% of aggregate spending in the U.S. by 2025, according to a report from Visa's analytics division. The same research projects the percentage of aggregate spending from all younger generations to decline.

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``The one thing that I worry about a little bit is that somewhere around two-thirds to three-quarters of boomers have under-saved for retirement and are going to have no real source of income besides Social Security," Severino said. "So I worry about them being able to spend." 

The two most demographically significant groups of baby boomers then would be the smaller, wealthy cohort that will want luxury versions of whatever travel, leisure, entertainment or retail they pursue and a larger cohort that might have more time than it once did, but no added spending power, Levy said.''

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iehi-feed-65145 Fri, 10 Jan 2020 00:57:58 GMT Oversupplied NYC Will See A Flood Of New Apartments And Condos This Year http://implode-explode.com/viewnews/2020-01-09_OversuppliedNYCWillSeeAFloodOfNewApartmentsAndCondosThisYear.html Around 20,000 new apartments for sale and for rent will be ready by the end of this year, The New York Times reports, citing data from Localize.city. Most of them will be priced at the top of the market, which is already oversupplied.

The bulk of these new units will be in Brooklyn, with more than 13,000 units in 421 buildings due to open. Manhattan takes second place with 79 buildings with 6,342 new units. Queens follows with 154 buildings with more than 6,000 new units. The Bronx, which has experienced significant development activity in recent year, will see 2,470 units open up. Staten Island's pipeline is lagging far behind: only 126 units are set to open in New York's least populous borough this year.

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iehi-feed-65142 Tue, 07 Jan 2020 01:49:03 GMT Manhattan's Flood of New Condos Could Take Six Years to Sell http://implode-explode.com/viewnews/2020-01-06_ManhattansFloodofNewCondosCouldTakeSixYearstoSell.html The borough has 7,050 unsold, newly built units, according to a report by Halstead Development Marketing. The bulk of those -- almost 6,000 -- haven't been formally listed for sale, creating an under-the-radar "shadow inventory."

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The glut is a product of a post-recession construction boom aimed at globe-trotting investors, who now show little interest in collecting lavish Manhattan homes. And most newly built apartments are out of reach for the majority of New Yorkers.

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iehi-feed-65138 Thu, 02 Jan 2020 23:07:54 GMT ‘They've turned their backs on us': California's homeless crisis grows in numbers and violence http://implode-explode.com/viewnews/2020-01-02_TheyveturnedtheirbacksonusCaliforniashomelesscrisisgrowsinnumber.html Communities have largely declined to treat the crisis like a natural disaster that demands humanitarian aid. In many places, what followed instead was a backlash, and in some cases overt attacks.

There were at least eight incidents in LA where people threw flammable liquids or makeshift explosives at homeless people or their tents this year, according to authorities and the Los Angeles Times.

A 62-year-old beloved musician's tent was set on fire in Skid Row in August, killing him in what police say was an intentional killing. That month, two men also allegedly threw a "firework" at an encampment, causing a blaze that grew into a major brush fire just outside of the city. One of the men arrested was the son of a local chamber of commerce president. Police said this fire was intentional. In a separate attack, a molotov cocktail destroyed tents and donations.

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This month, in a case closely watched by many west coast cities, the US supreme court dealt a victory to homeless advocates by allowing an existing ruling to stand that states governments cannot ban people from living on the street if they don't offer enough shelter beds.

Officials in Oakland have proposed a new policy to cite homeless people in parks while some have suggested setting up a shelter in a defunct jail. Law enforcement leaders in Bakersfield in the Central Valley pushed a plan to throw homeless people in jail for misdemeanor offenses. A state taskforce has also suggested a similar system of forcibly placing homeless people into shelters.

These efforts ignore the overwhelming evidence that criminalization and locking people up are costly and harmful responses that fail to fix the crisis, said Eve Garrow, homelessness policy analyst with the American Civil Liberties Union of Southern California.

"There's a dangerous and disturbing movement in California to address homelessness not by expanding access to safe, affordable and permanent housing ... but by jailing people," she said. "It's a terrifying prospect of a world in which we segregate, incarcerate and restrict the civil liberties of people just because they have disabilities and they are too poor to afford a home in our skyrocketing private rental market."

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iehi-feed-65135 Wed, 01 Jan 2020 15:54:18 GMT I, Who Vowed to Never-Ever Short Stocks Again, Just Shorted the Entire Market | Wolf Street http://implode-explode.com/viewnews/2020-01-01_IWhoVowedtoNeverEverShortStocksAgainJustShortedtheEntireMarketWo.html

In my decades of looking at the stock market, there has never been a better setup. Exuberance is pandemic and sky-high. And even after today's dip, the S&P 500 is up nearly 29% for the year, and the Nasdaq 35%, despite lackluster growth in the global economy, where many of the S&P 500 companies are getting the majority of their revenues.

Mega-weight in the indices, Apple, is a good example: shares soared 84% in the year, though its revenues ticked up only 2%. This is not a growth story. This is an exuberance story where nothing that happens in reality -- such as lacking revenue growth -- matters, as we're now told by enthusiastic crowds everywhere... The unanimity of it all was astounding. I've seen this before, but not in this magnitude.

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iehi-feed-65126 Sun, 22 Dec 2019 22:35:53 GMT Trump's Tax Cuts and Jobs Act shows poor results after two years [AKA: IT'S FRAUD] http://implode-explode.com/viewnews/2019-12-22_TrumpsTaxCutsandJobsActshowspoorresultsaftertwoyearsAKAITSFRAUD.html The early data doesn't look good for one of Trump's top legislative achievements. Two years on, it's clear the law did indeed boost GDP growth--but for only a short period.

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"We saw a short-term boost to output and investment that really seems to have largely dissipated. GDP is growing more slowly and investment is actually shrinking over the past two quarters," said Ben Page, an economist at the non-partisan Urban-Brookings Tax Policy Center. "There's almost no evidence for a big inflow of foreign capital."

In the meantime, the government now estimates it will lose $600 billion more in tax revenues than it initially thought, bringing the cut's total cost to $1.6 trillion. Boosting the deficit while the economy is growing and at a late stage in its cycle is irresponsible, Page argues.

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Despite what the Democrats claimed, most people did actually pay fewer taxes. But the wealthy got a far bigger cut than the rest of society, according to various studies. Next year, the richest 20% of taxpayers will save more than double the amount of taxes than the remaining 80% of earners combined--and the top 1% have cut their tax bills by an average of $49,950, according to calculations by the left-leaning Institute on Taxation and Economic Policy (ITEP).

"The tax law has made rich people richer, it's made some foreign investors richer, and it hasn't really accomplished very much else," said Steve Wamhoff, ITEP's director of federal tax policy. "I think this is the exact opposite of what our society needed in this time of greater inequality."

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Big companies are having a field day--with FedEx coming to exemplify corporate America's response to the cut. The firm's CEO lobbied hard for the bill on the premise that mass investment by businesses would follow. It then became one of 91 companies, including Amazon and IBM, whose effective tax rates dropped to zero in 2018--in Fedex's case, from 34% the year before. The company then cut its capital spending in both 2018 and 2019, according to the New York Times. Instead of ploughing their extra cash in infrastructure or productivity, big businesses have handed it back to investors through share buybacks.

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While Mathur still believes a big business tax cut with incentives for investment was good economic policy, she says she is frustrated with the complexity of the law the Republicans passed. That complexity, she argues, is part of the reason there's been less investment than expected: Businesses are perhaps holding onto the extra cash until the new tax law's full impact on them becomes clearer.

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[As to the claims of simplifying the law,] despite Trump's promise of a simpler filing season under his bill, taxpayers have had a rougher time since it passed. "Taxpayers spent about eight billion hours on tax compliance in 2019 (compared with about six billion hours in 2016)," wrote Omri Marian, a tax law professor at the University of California, Irvine. While Trump did fulfill his trademark promise of making the individual tax return fit onto a postcard, the new form is "less intuitive, and requires multiple other new forms to complete," Marian wrote.

A less polite way to summarize this is: fraud. Starting from the fact that the bill was passed as a partisan ram-through by gaming the Byrd rule in the Senate, which required no more than a $1.5tln addition to the deficit. As we have seen, that has been blown through already at this early date (as, of course, we predicted here). Then go on to the points about corporate America lying through their teeth about spending the savings on jobs and reinvestment, and the distribution of tax cuts accruing dramatically to the top 1-20%, and you have quite a fraud layer cake. Of course, this should not be much of a surprise coming from someone named "Trump".

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iehi-feed-65125 Sun, 22 Dec 2019 21:21:47 GMT Investigation: Reverse mortgages leave families battling for property after death http://implode-explode.com/viewnews/2019-12-22_InvestigationReversemortgagesleavefamiliesbattlingforpropertyaft.html Even heirs who want to pay off reverse mortgages to hold onto a family home, and have the means to do so, can find themselves stymied by a seemingly endless cycle of conflicting messages that stretch out for years. 

That's according to some of the more than 100 tips and letters received by USA TODAY following its probe into a surge in reverse mortgage foreclosures issued just after the recession.  

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Most issues can be traced back to faulty loan servicing with an often-revolving cast of loan companies -- the administrative duties of what should be routine disbursements, interest calculations and communications with borrowers or heirs, said Sarah Bolling Mancini, an attorney with the National Consumer Law Center.

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iehi-feed-65124 Sun, 22 Dec 2019 21:15:05 GMT Homelessness rose 2.7% in 2019, driven by a surge in California, HUD says http://implode-explode.com/viewnews/2019-12-22_Homelessnessrose27in2019drivenbyasurgeinCaliforniaHUDsays.html The study found that 567,715 people across the nation experienced homelessness on a single night in 2019, an increase of 14,885 people compared with 2018. Meanwhile, homelessness among veterans and families with children declined in the year, dropping 2.1% and 4.8%, respectively.

The number of people experiencing homelessness dropped in 29 states and Washington, DC in 2019, the news release said. But the rise in homelessness in California and elsewhere on the West Coast "offset" the nationwide decreases, the office said.

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An additional 21,306 people were homeless in California in 2019, up 16.4% from the previous year, HUD said.

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iehi-feed-65123 Sun, 22 Dec 2019 21:11:20 GMT Emily Ratajkowski was paid to leave NYC apartment after 'dodging rent': suit http://implode-explode.com/viewnews/2019-12-22_EmilyRatajkowskiwaspaidtoleaveNYCapartmentafterdodgingrentsuit.html Emily Ratajkowski and her wealthy husband misused a state loft law meant to help starving artists to skip out on $160,000 rent over two years -- and then had to be paid to finally leave the building, the landlord claims.

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The rent dispute took an ugly turn on Twitter at one point, with the glam couple falsely depicting landlord Antoni Ghosh as a "real estate conglomerate" gouging tenants of the Bleecker Street building, according to a lawsuit Ghosh filed against the pair.

Ghosh, who wants $250,000 in damages, does not own 49 Bleecker St. but has rented an entire floor since 1995 for $23,000 a month. He sublets five of the six units. Bear-McClard began renting the unit in 2013 for $4,200 a month, and the rent eventually climbed to $4,900 a month.

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Bear-McClard stopped paying rent in 2017 and filed a worthless application to register the unit under the city's Loft Law -- which meant he couldn't be evicted while his application was pending, the suit charges.

Ratajkowski, 28, and Bear-McClard, 32, "utilized delay tactics while that application was being processed, not paying rent," Ghosh alleged in court papers.

The law is designed to provide affordable housing for artists, who can't be evicted while their Loft Law application is under review. They law protects such tenants from unlawful eviction or massive rent increases.

While getting no rent, Ghosh had to pay $23,000 a month out of his own pocket to building owner Rogers Investments.

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iehi-feed-65121 Sun, 22 Dec 2019 15:12:12 GMT After Supreme Court homeless ruling, housing is now the only option http://implode-explode.com/viewnews/2019-12-22_AfterSupremeCourthomelessrulinghousingisnowtheonlyoption.html The U.S. Supreme Court decided against hearing an appeal of the landmark case City of Boise vs. Martin, letting stand a ruling that amounts to a broad curb on police powers in California and eight other states to stop people from sleeping on public property if no other shelter is available.

In doing so, the justices took yet another tool out of the municipal toolkit for preventing people from building sprawling encampments that increasingly clog their sidewalks and streets.

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In the past, such efforts have been slow throughout much of California, and often have been met with resistance from local government officials and neighborhood groups. But, for now, it is the only way.

"Our hope is that communities won't be nickel-and-diming this decision and figuring out the bare minimum so they can be legally compliant," said Eric Tars, an attorney with the National Law Center on Homelessness & Poverty, who worked on the initial Boise case and represented several of the plaintiffs involved in the challenge. "We hope they take this opportunity to alter a completely unsuccessful way of dealing with homelessness."

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iehi-feed-65117 Wed, 18 Dec 2019 23:03:27 GMT It's Boris Johnson's Britain Now http://implode-explode.com/viewnews/2019-12-18_ItsBorisJohnsonsBritainNow.html iehi-feed-65116 Wed, 18 Dec 2019 22:40:33 GMT Unmasking the secret landlords buying up America http://implode-explode.com/viewnews/2019-12-18_UnmaskingthesecretlandlordsbuyingupAmerica.html Since 2016, FinCEN has issued geographic targeting orders requiring that the "beneficial owners" of residential real estate bought with cash be disclosed. The Treasury police started with six metro areas, then expanded to nine -- running from Los Angeles to New York, Miami to Seattle. Yet FinCEN insists on keeping that information secret.

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Reveal is going to court. In a complaint filed Monday in the U.S. District Court in the Northern District of California by our general counsel, D. Victoria Baranetsky, Reveal argues that the government has "no lawful basis for declining to release the records" under FOIA. 

"The public and the press have a clear and abiding interest in knowing who owns property in their communities," the complaint states, "and keeping public officials accountable in their handling of this matter."''

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iehi-feed-65114 Tue, 17 Dec 2019 19:57:17 GMT 57th Street in Manhattan is the world's most expensive street http://implode-explode.com/viewnews/2019-12-17_57thStreetinManhattanistheworldsmostexpensivestreet.html `Billionaires' Row' has earned its nickname. 57th Street in Manhattan, which is lined with a handful of supertall luxury buildings built in the past decade, is the street with the most expensive properties in the world, according to a new study.

A new report from Douglas Elliman and Knight Frank tallied the number of homes sold for more $25 million since 2015 and determined that the Midtown corridor has logged 41 -- more than any other global thoroughfare.

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The other most expensive streets were Hong Kong's Mount Nicholson Road, Mount Kellett Road and Conduit Road; London's Grosvenor Square; the Pacific Coast Highway in Malibu, Calif.; and Palm Beach, Fla.'s South Ocean Boulevard.

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One of the transactions that pushed 57th Street over the top is hedge-fund manager Bill Ackman's $91.5 million purchase of a 13,500-square-foot duplex at One57, located at 157 W. 57th St., in a deal that closed in early 2015.

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iehi-feed-65111 Sun, 15 Dec 2019 20:53:51 GMT Trump's 'big deal with China' isn't big, isn't a deal, and isn't real http://implode-explode.com/viewnews/2019-12-15_TrumpsbigdealwithChinaisntbigisntadealandisntreal.html The agricultural purchases required in the agreement are both vague and clearly far too small to restore even the conditions that existed before Trump's actions sent China looking to South America and other regions to replace goods they would have previously purchased from America. In 2019, farm debt topped $416 billion--absolutely swamping the scale of Trump's "enormous deal," even when including non-agricultural products. 

Even as bankruptcy is up 24% in a single year, Trump is telling America's farmers that it's time to buy "much larger tractors" to generate all the grain required by this deal. Trump says that he expects China to buy $50 billion of U.S. agricultural products. That $50 billion figure is one that Trump has deployed before. It's just that the date keeps shifting. And shifting. That number is imaginary, but the exploding farm debt and bankruptcies are very real.

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In fact, Trump's massively hyped trade deal is such a preliminary step that it's not even getting rid of the tariffs he's put in place. The 25% tariff on over $250 billion of Chinese products is untouched, while the 15% tariff that was placed on another $150 billion in goods is dropping to 7.5%. Or, 7.5% higher than they were in September--which is not a great sign that a trade war has "ended."

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iehi-feed-65110 Sun, 15 Dec 2019 20:34:11 GMT Startup plans to allow consumers to "purchase" homes without a mortgage http://implode-explode.com/viewnews/2019-12-15_Startupplanstoallowconsumerstopurchasehomeswithoutamortgage.html Fleq will launch next month in Pittsburgh, and instead of originating mortgages, its plan is to simply buy the home a purchaser wants and sell it back to them, bit by bit, in shares. The buyer can choose the length of time that they want to pay for the home.

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How does it actually work? Fleq charges rent to the homebuyers. The company says once the buyer has paid for 100% of the home, it will hand over the title -- cutting any mortgage down payment or interest rates out of the process. But if the buyer wants to move before paying for the home completely, they would simply split the profits with Fleq based on how much of the home hey have paid off.

This is actually a pretty clever idea. It allows for the best of renting AND building up equity/eventual ownership without taking on the risk of ending up underwater on a highly-leveraged person hedge fund...

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