Trump BANNING Single-Family Rental Homes | How this Affects HouseHack / Reinvest

Stocks of the owners of institutional

owners of single family rental homes

have just been taken a huge hit. I am

immediately taking steps to ban large

institutional investors from buying more

single family homes.

>> Bill banning institutional investors

from buying single family homes as

outlined by the president. But you have

seen investors take on larger and larger

shares of the overall uh housing stock.

Donald Trump just attacked the housing

industry, all in an effort to promote

affordability by threatening to ban

large institutions from competing

against us Americans in buying homes.

Now, the question is, is this a big win?

Are we finally going to get rid of

greedy landlords? And are we finally

going to have a chance to buy homes? as

Americans who are trying to get into

home ownership, especially millennials,

Gen Z, are they going to have finally

have a chance through this? And how is

Donald Trump even going to do this? Or

is the government just breaking our legs

with inflation only to hand us crutches

and say, "See, I'm from the government

and I'm here to help." Well, in this

video, I'm going to cover all of that.

Hey everyone, me Kevin here. We're going

to talk about what Donald Trump just

said, what it means, what he can do,

what has happened in the past, not just

with bills in America. We'll look at two

specifically, but we'll also look at the

exceptions in those, and what has

happened based on studies in other

countries so we can understand is Donald

Trump's idea at face value a good one?

We're going to break it all down and

we'll talk about how this impacts

investors. We'll even talk about my

company, real estate artificial

intelligence company Reinvest or House

Hack, same company towards the end of

the video because this has some really

awesome implications for House Hack.

You'll see towards the end. But first,

let's stick to the facts. I tweeted

earlier when this news was announced

that American Homes for Rent stock was

suspended, down 8.33%

as Donald Trump wants to ban large

institutional investors from buying

single family homes. No further details

other than saying that we know that

institutional ownership can carry many

different definitions. Some say it's

more than a thousand homes, which could

affect companies like American Homes for

Rent or Invitation Homes. And so we

immediately saw some of their stocks

decline, though they've somewhat

rebounded since then. When the news came

out, we saw this collapse in Invitation

Homes as well as American Homes for

Rent, leading to suspended trading in

the stock, showing you how rapidly a hit

we saw in these particular stocks. It's

actually interesting because I made a

purchase on some mortgage company plays

this morning and sent an alert to the

investors in my real estate investing uh

and uh stock market alpha reports and

they actually shot up even more after

this news. By the way, if you want to be

part of that, you can get that

membership over at meetke.com. You get

all the courses and morning live streams

and buyell alerts and everything. They

shot up even more on this idea that, oh

wow, if this makes home ownership more

affordable, then more people are going

to need loans. I don't know these

short-term fluctuations in stocks really

tell us anything. But I will tell you

that was the reaction function of the

market. Oh, no. Really bad for big

holders, good for lenders. We'll see if

that lasts. But what did Donald Trump

specifically say? because the wording is

very important so we can understand

timing and how this might actually

function. So here's what Donald Trump

said. For a very long time, buying and

owning a home in America was considered

the pinnacle of the American dream. It

was the reward for working hard and

doing the right thing. But now because

of record high inflation caused by Joe

Biden and the Democrats, which let's be

clear, Donald Trump was president when

we passed the first CARES Act and

contributed to a lot of the money

printing. But Joe Biden did add to it.

[laughter]

The inflation reduction act we all know

was inflationary upfront. All right.

[laughter] Anyway, uh that's always the

irony of government is that government

often achieves the opposite of what they

say they want to achieve. But anyway,

that American dream is increasingly out

of reach for too many people, especially

younger Americans. Hence why I started

by saying Gen Z and millennials. It is

for that reason and much more that I am

immediately taking steps to ban large

institutional investors from buying more

single family homes. And I will be

calling on Congress to codify it. People

live in homes, not corporations. Now,

this is a very populous statement, mind

you, because obviously even corporations

end up renting out homes to guess what?

American people who live in them. So,

this phraseiology though is popular and

that's what Donald Trump likes to do in

his messaging. He floats ideas to see

what kind of reaction people come up

with. It's kind of like when he floats

uh with like a Fed chairperson like

Hasset and all of a sudden all the

bankers are like, "Oh no, that guy's a

wet blanket." Or he throws up Kevin

Worsh and then people are like, "Oh no,

that's an even worse idea." Right? This

is what Donald Trump does. He throws up

an idea, 50-year mortgage. Let's see how

people react. Remember, Donald Trump

wants to make sure Congress is

controlled by Republicans at the end of

this year. So, anything he can do to

show that he is pushing for American

affordability is in his opinion

something that is going to help him gain

control in midterms. Now, with that

said, Donald Trump goes on and says, "I

will discuss this topic, including

housing and affordability proposals and

more at my speech in Davos in 2 weeks.

Note that Davos takes place January 19th

to 23rd, and Donald Trump is usually one

of the first speakers at Davos." Okay,

so why? Again, Trump is pushing for

affordability here. He wants to say he's

working for the little guy. There are

just some statistical problems and

questions that come out of this.

Obviously, the first and most important

question that comes out of this is who

is this actually going to affect? First,

we have to remember this chart. This is

pretty basic, and then we're going to

get into the deep research. Are you

ready for this? Buckle up. Mom and pop

landlords are by far the largest owner

of single family renters. According to

batch data, in total, 89.6%

of single family home rentals are owned

by landlords who hold between 1 and five

properties. So obviously, we don't know

what Donald Trump is going to call an

institutional investor. Is it going to

be those with a thousand plus

properties? If so, that would only

affect about 1.6%

of rental properties. And given that the

idea is, hey, let's make it more

affordable for people to buy homes, what

are the odds that you would actually

compete against one of those thousand

plus property owners when you're buying

a home? Okay. Well, to understand that,

you have to ask yourself, what

percentage of homes are bid on by

investors? So, in other words, when a

house comes up for sale, how many of the

buyers are usually investors? On

average, investors buy about 20% of

homes for sale. Some markets a little

more, some markets a little less. But if

institutional home buyers only own 1.6%

of properties, thousand plus property

size, right? Then the odds of you

showing up against one of those

institutional home buyers would be 20%

times 1.6%. So, in other words, maybe

one in every

167 homes, you'd actually be up against

one of those massive buyers. Think

Invitation Homes or American Homes for

Rent. Again, these are companies that

own 60 to 80,000 homes. This was really

uncommon back in 2011, but it started

becoming very common to where in 2022

there are quite a few pro companies that

own a lot of single family homes like

this. Obviously, if they set the

threshold lower to let's say 50

properties, you might increase this to

about 3 12% approximately. Okay, fine.

But for the vast majority of rentals,

they are owned by people who own just

one or two all the way up to five

different properties. And this is pretty

typical because when people go to sell,

they don't necessarily or or when people

go to move rather, they don't

necessarily always sell. Sometimes they

just turn their property into a rental

and try to keep that property for

generational wealth. Okay, let's now

understand the policy because obviously

we look at this and we say, "Hey, like

this sounds good." Like the theory is if

we have fewer buyers, prices should go

down, right? Ah, okay. Well, let's get

into if that actually happens because as

usual, life is typically a bit more

complicated. And that's why we like to

go deep on this channel. I love going

deep. And so I'm going to introduce

something called the Roderdam effect.

Now the Roderdam effect is a really

interesting effect that occurred after

uh in the Netherlands policy was

instituted suggesting that there would

be a ban or requiring a ban of buy to

let purchases. Let being lease in this

case. So this study analyzed the effects

of that Netherlands ban and they found

that when they instituted the ban in

2022, while you would think that prices

would go down, unfortunately the

opposite actually happened. And the

Netherlands, let's just put it this way

before we even hit the notes of the

study, the Netherlands got so freaking

pissed about buying uh or or banning

investors from buying rentals and they

realized it was so bad that the

Netherlands actually released this on

their website. You can't make this up.

And I'm showing you part of this

conclusion up front just because it's so

shocking. Look at this. This is on the

Netherlands website for tax policy. So

the government website. Quote, "Do you

want to buy a residential property as an

investment to rent out or as a vacation

home? The property transfer tax for

houses to buy has gone down. With this

change, the government wants to make it

more attractive for entrepreneurs to buy

homes, to rent them out. This will

increase the supply of rented properties

and the government expects the tax

reduction will lead to more housing

development.

What? Wait, wait, wait. So, the

Netherlands banned people from buying

properties to rent them out and the

effects were so bad that they actually

turned around and starting started

begging investors to buy homes again.

How does this make sense, Kevin? There

has to be something missing here. show

us the actual deets. Okay, no problem.

So, here are the actual deets. Buy to

live versus buy to let home ownership.

So, take a look at this. The ban on buy

tolease properties was found out that

this policy significantly reduces

investor purchases and increases owner

occupancy. Okay, I mean that sounds

good, right? Like we we want owner

occupancy to go up, right? Despite

removing investor b demand, the ban did

not reduce home prices or transaction

volumes. Instead, neighborhoods just

became more desirable to owner

occupiers. The desiraability emerges

through residential sorting. New

homeowners have higher incomes and are

often Dutchorn. They move shorter

distances and stay longer than renters

whom they replace. Thus, promoting home

ownership may improve neighborhood

quality, but reduces mobility and

housing opportunities for lower income

renters. Hold on a second. Let's pause

for a second. What?

Basically, what they're saying is when

you have a neighborhood that's 50%

rentals, people might not spend money to

fix up the garden or put in some new

hardscaping or a new driveway because

why would they? They're a tenant. They

don't benefit from the increasing home

price. If anything, that would just

increase their own rent. So tenants are

generally disincentivized from improving

a property. But when you ban rentals

essentially in certain neighborhoods and

eventually those rentals get replaced

with homeowners, you end up driving up

the desiraability of those

neighborhoods, making those homes more

expensive, not less expensive. And so

this research paper goes on to find that

in the Netherlands prices actually in

the short term rose by 2 to 3%. Take a

look at this. Despite largely

eliminating buyto- rent demand for

housing, we do not detect significant

declines in property values. In fact,

they actually tend to rise 2 to 3%

in the next two quarters. So, in other

words, there's a rapid increase in the

prices of homes in just the next 6

months. And this is because when you

remove investor buyers, it actually

removes and kicks out the renters. So,

you're basically getting rid of the

quote unquote lower quality tenants, and

you're making the rich richer in more

bougie hoods. Now, what about rentals?

Well, the problem with rentals is that

while the idea is that you push down

home prices, you actually don't. You not

only increase home prices, but you

disincentivize

selling. Investors who currently hold

properties are less likely to actually

sell their properties and increase

selling proceeds. Once again, increasing

the cost of living, not decreasing it.

This is a tendency with the government.

The government tends to do this. Now,

this study also went on to say that this

is very different for value type

investors or investors who rescue

abandoned homes and offer liquidity or

investing in renovations.

The buy to let tenants or or landlords

that this you know legislation generally

aims to ban are the people frankly I see

this regularly like invitation homes and

American homes for rent who just go in.

They don't actually renovate the

property. They don't actually improve

it. They swoop in and just put up a for

rent sign. And so the same Dutch study

found that the best investors were

actually value investors who didn't

compete with first-time home buyers

because value investors who buy a fixer

upper, they don't compete with

first-time home buyers. It's usually

just people who want to rent it out asis

who compete with first-time home buyers.

This becomes very important because it

adds nuance which is usually lost on

Twitter or in short form content. But

that's why you're here because you value

learning every single video you watch

and that's why you subscribe to the

channel to get this content for free.

But what people like is more rental

supply because it reduces the costs of

uh rentals because you add more rental

supply. People want lower cost of

living. How do you lower the cost of

living? You generally lower the cost of

living by providing more supply. Now,

more on that in just a moment, but I

want to show you when we talk about

value investors, which comes up in the

discussion of what should we do and what

kind of legislation have we seen in

America before, it's worth remembering

what a value investor buys. This is an

example of what a value investor buys.

Look at the carpet. Look at the mold on

the walls. Look at the bathrooms and the

kitchen. This is not something that a

first-time home buyer buys. This is

something that a professional buys who

understands how to actually make this

property habitable. If home buyers are

required to buy something like this,

then what you actually will find is that

the home will just sit vacant. So with

that said, let's go on to some

additional research. What else did we

find out? Well, not only did we find

that after the Roderdam experiment, the

Dutch government U-turned and basically

said, "We want to incentivize

entrepreneurs from buying homes," the

exact opposite of what they said the

very first time. In other words,

admitting that banning investors was

such a failure that they uturned and

actually tried incentivizing. But we

also ended up finding that unfortunately

when we banned investors from buying

homes, rents also increased. So not only

did values go up, but because the supply

of rentals went down, you could find the

Reason Foundation reports that banning

investors has failed. Roderdam and the

Netherlands banned them in 2021 2022

which promptly triggered a 4% increase

in rents, displaced lower inome

families, and led to homes being

purchased more often by richer and older

buyers. Hardly a victory for

affordability or equity. And this is the

point. We have to be really careful when

we hope that government can solve our

problems because it's usually and

ironically government that creates the

first problem. Then they try to solve

more problems and they just make the

problems worse. Now we can prove that

government intervention is problematic

by looking at the difference between

Austin, Texas and New York. When we look

at home prices in Austin, Texas from

2022, which is the light teal line here,

compared to 2025 or the blue line, we

could actually find that home prices in

Texas, I wrote it down here somewhere.

There we go. Home prices in Texas have

fallen by 21%

from the 2022 peak. So in other words,

home prices fell in Texas where it was

easy to build. Austin, Texas has some of

the loosest building requirements. And

so when the government got out of the

way, home prices actually came down. So

if people want affordability, you want

more building and you want to get the

government out of the way. If you want

more government, then you should look at

New York. New York has some of the

strictest housing requirements in the

country. And their home prices have

risen 15% from 2022. They've gone in

exactly the opposite direction. And

that's why Red Fin inverses the lines

here. You can see the blue is up 15%.

That's 2025 compared to 2022.

So in other words, once again, the

government gets in the way. that tend to

make the problem worse, not better. Now,

we did see that after the Roderdam

study, investor purchases did fall 73%.

And home purchases, like home buyer

purchases did go up 13%. So, fewer

investors bought and more home buyers

bought. That's good. Like, that's what

they wanted, right? But again, sales

supply from investors fell and the

desiraability effect led home buyers to

actually pay more money for those

properties and rents increased because

investor supply fell. Again, the exact

opposite of trying to appeal to the mass

people who are housing stressed. In

fact, there is very specific research on

housing stress. And then let's talk

about how Donald Trump could actually

legally pull anything off. when it came

to housing stress or people who needed

to relocate because of job loss or

divorce. Because private investors tend

to offer more flexible rental

arrangements, you have more mobility

when you have investors in a market. But

because you actually reduce that rental

supply through this ban, you actually

unintentionally reduced housing

mobility. So once again, the government

got in the way and found out that when

you get in the way, you tend to make

problems worse. Now, is this the only

study? I mean, maybe the United States

is different. Well, New York University

at Stern also conducted a study on this.

And this is what the New York University

study had to say. Despite the presence

of market power, I show that large

landlords increased rental supply by

half a home for every home purchased.

and decreased rents on net due to lower

operating costs at scale. So basically,

when large landlords were buying, not

only did they introduce the one property

they bought, but they actually increased

overall rental supply by an extra half.

So it's kind of like every home that an

investor bought, 1.5 came up on the

market. And the reason that is is

because you incentivize development.

When you incentivize development, rents

come down. New York University also

suggests that when you allow investors

to purchase properties, you tend to

decrease rents because investors have

lower operating costs at scale. Policy

seeking to ban institutional investors

or cap annual rent increases ironically

increase rents by reducing the rental

supply, the opposite of the intended

effects on the rental market. In other

words, institutional investors tend to

benefit renters by lowering rents and

overall increasing the quality of

rentals by renovating. Now, again,

that's not to be confused with the

quality of a homeowner neighborhood

where you tend to go from, you know,

slum lord to a quality rental to

overimproved homeowner went allin,

[laughter] right? Those are different

levels of spending in neighborhoods.

Anyway, let's now understand what can

Donald Trump actually do? Like Donald

Trump, can he do this? And has there

been anything like this proposed before

Congress before? Yes, there has been.

And we're going to break it down. First,

if Donald Trump just issued an executive

order banning uh the government or

utilizing the government to ban private

ownership of real estate by

corporations, he would likely violate

the fifth amendment. The fifth amendment

bars the government from taking private

property for public use absent

compensation. That's eminent domain

essentially. But otherwise inside of the

fifth amendment, you also have what's

known as the takings clause. And the

takings clause is essentially a way of

saying that the most principle universal

law is that without the right to

property, all other rights would become

utterly useless. Uh, in English, you

can't take people's crap. And in rare

exceptions, we're okay with you taking

people's crap if you incentivize them,

you pay them, and compensate them for

it, and only for purposes that would

broadly benefit the public domain, the

public use. This has regularly been

upheld. Eminent domain, it does not

require constitutional recognition. So,

you could utilize eminent domain without

an act of Congress. But again, you

typically need a government benefit and

you often have Congress involved, such

as when we were building the railroads.

Take a look at this. United States

versus Gettysburg Electric Railway

Company, an appropriation by Congress

for continuing work on surveying blah

blah blah, building out the railways.

These are basically what eminent domain

uh these are the purposes that eminent

domain is designed for, some kind of

public good. Now, could you make the

argument that removing institutional

investors benefits the public good? Not

based on research. Although Donald Trump

is famous for making an argument and

kind of just waiting years for the

Supreme Court to decide because

unfortunately that's the way things work

here. Now, can Donald Trump do this with

Congress? Maybe. But remember, what are

the odds that Donald Trump is actually

going to keep a super majority in

midterms? Well, according to Poly

Market, just about 3%. I think most

people expect they're either going to

lose the Senate, the House, or both to

Democrats, and we're probably going to

have two years of gridlock in Congress,

and nothing's going to get done. Given

that this is a midterm election year,

it's also really unlikely that any kind

of large legislation is going to get

passed. But some would argue that a

populist piece of legislation like

banning institutional home ownership

even though it's not founded in fact

could be popular enough to eek in. Now,

has this ever been done before? Yes, we

have introduced bills like this before.

In fact, take a look at this. Here is a

bill that previously failed. It's called

the End Hedge Fund Control of American

Homes Act. And it basically proposed to

tax any acquisition

of a single family above a certain

threshold by 50%.

Now this is how Congress could do it.

They could tax the economics of owning

real estate out of existence. That's

essentially what countries like Ireland

have done, though we'll talk about that

in just a moment. And it's what the

Netherlands really tried to do, but

didn't do very well. And as you can see,

they're now lowering taxes because they

want to incentivize investors. So

anyway, here you could find that in this

there's some really key exemptions. And

this is really important. Here are the

mechanics of how this works. So first,

we're going to tax 50% of the fair

market value, but only for the

properties that exceed a certain

threshold. The threshold is take the

number of you homes you own currently,

multiply it by 90%. And then add 50. So,

let's say you own a 100 homes. Take 50%

or sorry, take 90% of that and then add

50. That would mean you're allowed to

buy up to 140 homes. After that, you get

taxed 50%. And that ratio changes every

single year down from 90% to 80, 70, 60,

50, 40, and so on. And eventually it

just squeezes it to where you really

can't add more than 50 homes per year is

the idea of this particular legislation

without hitting the 50% tax. This banned

1 to four units and it exempted

critically it exempted foreclosures,

federally funded properties and

principal residences. Now a foreclosure

exemption is actually really useful.

You'll actually see that a few

exemptions over here. But a foreclosure

exemption is really useful because again

when you look at a property like this,

like who wants to buy this, right? When

you look at property like that, you need

an investor who's going to be able to or

willing to go in there and fix it up.

Here's another example of one. You've

probably seen this before. I've shown

this Matterport on the channel before,

but in case you're new here, just all

you have to do is look at the kitchen in

this place. Okay? You need people to go

into distressed properties like this,

buy them, and fix them up. Homeowners

aren't going to do that. That same

property that I just showed you, this is

the after scan of that property. And

this is where you're going to see that

there are actually two different types

of landlord investors. And we talked

about that. Well, we talked about that a

little bit earlier. The value investor

and then the just buy and throw up the

for rent sign uh investor, right?

Somebody undergoing a substantial

rehabilitation like this is often

actually exempt from laws that have been

proposed in America before. So, not only

are foreclosures exempt, but I want you

to see it in the actual law yourself.

So, this is the End Hedge Fund Control

of America Act. And again, remember this

did not pass, but it's a template for

maybe what we would see. And what you

end up finding is right here under

exemptions, any exemption would apply to

any entity such as a nonprofit or

critically quote an organization

primarily engaged in the construction or

rehabilitation of single family homes.

Now, this applies to one to four single

family homes. So, a duplex, triplex,

forplex, right? But really what you're

saying is, "Hey, hey, we're just going

to ban the people who are going in

buying and hodddling and not actually

doing any work to fix up properties. So

if you're buying fixers, you're actually

totally exempt from the ban hedge fund

America act in America act, right?" In

addition, there are also some really

funky definitions in here such as like

you're only banned if you manage a pool

of funds from investors or you have a

fiduciary obligation to investors. This

is like some really funky wording that

really shouldn't belong in law because

it's such a massive loophole. Like let's

be real, any corporation is typically

not a fiduciary to you. Now corporate

executives have a fiduciary obligation

to their shareholders, but the

corporation itself has only a duty to

itself, not to people. So that's a

massive exemption right there, which is

just I think sloppy writing of this

bill. And to me, it's no surprise that

it never passed. Operating companies

that provide a product or service that

are not pulled investment funds are also

exempt, which to me, this just screams

loopholes. Again, this never passed.

This was just an idea, but typically you

get these massive exemptions that mean

practically you don't really make much

of a change anyway. It seems like they

were really trying to target the hodlers

now, which in other words, the buyers,

not renovate, and then hodlers, right?

Because there are also the renovate and

then hodlers. Different classes of

investors, different styles. One's a

value investor who tries to buy real

estate below market value and fix it up.

Like, I'll give you an example. This

property right here that I showed you,

this property sold in about an 800 maybe

$825,000

neighborhood. and it sold for $600,000.

Now, a lot of people might look at, "Oh

my gosh, it's gonna take more than

$200,000 to fix it up." No, it might

take $80,000 to fix it up. And that

creates what's called a wedge or this

profit opportunity where whoever buys

this property,

wonder who that could have been, uh

would end up profiting potentially up to

$140,000 on that acquisition. Well,

$140,000

profit on an acquisition at $600,000

after their fix up cost is a 140k return

on $680 in cost. That's about a 20.5%

return. That's really good for providing

that value. Again, very different than

just we're going to buy it and throw up

a rent sign. Okay. So, what else? Well,

there was another act. It was called the

Stop Wall Street Landlords Act of 2022.

And guess what? It also exempted well

not only did it exempt federally

assisted buildings or principal

residences, but it also exempted well,

you guessed it, original construction or

substantial rehabilitation shall not

apply with respect to a single family

home originally constructed or

substantially rehabilitated by the

taxpayer. In other words, as long as you

actually rehab the property, you

wouldn't be subject to these laws

anyway, which I actually argue would be

a good thing. It actually makes it

easier for businesses who try to provide

value to the community by fixing up

properties to buy those properties

because you cut out all the other people

who were too lazy to actually do any

kind of improvements.

Now, outside of an executive order,

which I don't think is likely from

Donald Trump, uh, which I mean, it's

possible, but we'll talk about it. But

outside of some kind of executive order,

which could run a foul with the, you

know, fifth amendment and the takings

clause, Congress might pass a bill like

this. But, as we've seen, we know what

the implications are going to be of

these sort of laws, and we know what

kind of exceptions we typically see in

these. There are some other strategies

Donald Trump could try to take. He could

try to choke out funding markets like

FHAFA funding. So this is where big

institutions sell uh mortgage back

securities to government sponsored

entities, government sponsored

enterprises, whatever the GSC's, you

know, the Fanny Freddies. They could try

to limit some of that. They could also

try to institute some form of banking

regulation via, you know, overall any

kind of banking, frankly, regulation

that we have where maybe Trump says

large-scale blanket loans to real estate

are just more risky and we're just not

going to allow banks to make those loans

unless they hold a lot more capital,

effectively disincentivizing those sort

of loans. So, you could affect lending,

you could affect uh the securizations

market, you could potentially try to

institute some form of anti- monopoly

regulation given that a lot of these

companies tend to dominate in certain

markets. But you have to be careful

because you don't want to kill the

billto- rent sector. The billto- rent

sector is really important and that's

where the same company, the reason

foundation tells us the market doesn't

like doing this. In other words, banning

investors because really what increases

or like what what would bring prices

down would be building more. But

instead, prices tend to go up because

housing supply doesn't keep up because

of quote persistent regulatory barriers,

including zoning restrictions, minimum

lot sizes, limits on multif family

homes, and long costly permitting

processes that just simply make it

difficult, if not impossible, to meet

the rise in demand in a cost-effective

way. In other words, the more barriers

there are to building homes, the fewer

homes tend to get built. This is not a

surprise. In fact, it's exactly what we

looked at when we compared Austin to New

York real estate. So, this is the ripple

effect that you're trying to avoid. And

so, graphically, I put together a little

image of how this could work. You could

see executive action, though that'll

probably get caught up in courts. If you

see investor divestment, you could end

up decreasing rental supply and just

increasing rents. You could also create

shocks to individual markets and create

these localized crashes where a lot of

these institutions tend to operate. I

made a list here of where some of these

companies operate. Here's Invitation

Homes. Atlanta, the Carolinas, Dallas,

Denver, Houston, Jacksonville,

Nashville, Orlando, Phoenix, Salt Lake

City, San Antonio, Tampa, and Inland

California. Ironically, almost every

single one of those locations is a

Republican stronghold. So in other

words, yes, these institutions have

focused on Republican strongholds

because there tends to be less building

regulation. It makes it easier to buy

blocks of homes that are newer and

pretty consistent. Okay, what about

American Homes for Rent? Ah, American

Homes for Rent. Arizona, Colorado,

Florida, Georgia, Idaho, Nevada, North

Carolina, Ohio, South Carolina,

Tennessee, Texas, Utah, and Washington.

also sounds pretty dang red. But again,

while there might be a lot of

concentration, we once again hit the

element of when you ban investors, you

tend to make a mistake and you end up

regretting it and you end up wishing

investors would come back. Then again,

that's just the nature of government

policy. Government policy tends to

create dead weight loss in the economy

and often makes things worse rather than

better. Okay. Now, a lot of people have

been asking, "Oh, Kevin, what does this

mean for a house hack?" Well, frankly, I

shouldn't have to tell you because based

on the research that I just provided

you, it should be pretty obvious. House

hack or my real estate company, which

provides real estate artificial

intelligence, I want to be clear about

that. We do a few different things.

Number one, we provide real estate

artificial intelligence software and

educational software. So you know we

educate with real estate courses like we

released something called the reinvest

course and this is about building wealth

through lectures trumpics getting a head

start on your wealth right this is part

of the alpha membership you can get at

mekevin.com that's why it's the

membership by reinvest because we've got

the reinvest course in here but reinvest

or house hack same company also has this

artificial intelligence product so for

us we're very diversified in what we do

our real estate artificial intelligence

product is out uh and we will continue

to release or increase the price as we

release new features with some new

features coming out this week that I'm

very excited for. Now, that said, a lot

of people are going, "Oh, but Kevin,

what about rentals?" That's fine. See,

the benefit for House Hack or my company

is that we don't just buy properties and

rent them out. We buy the crappiest

homes on the street. we buy the worst

home on the street so we could turn

around and rehab it, which is

historically exempted from these limits

in almost all legislation we've seen in

America anyway. And since rental supply,

like if even if then we had some kind of

institutional ban of housing ownership

and somehow house hack was large enough

to qualify for it, we've seen what

happened. If you're not renovating

homes, first of all, you're exempt if

you're renovating homes, so it would

make no difference to house hack. But

what it broadly would do is since it

would decrease rental supply,

constraining rental supply, we'd see

rents go up and home values go up. So

once again, ironically, it would just

benefit companies that already own

homes. It would benefit companies like

Invitation Homes and American Homes for

Rent on the existing homes that they own

because rents would go up and values

would go up. Their entire portfolio

would get a big lift without them even

lifting a finger. It would be a big

benefit to them, not a detriment. And if

institutional investors had to just turn

around and only do fixeruppers, well,

that might make a big difference for the

logistics of these other companies. It

make no difference for us cuz that's

what we do anyway. [laughter]

I've regularly complained that I hate

these companies that just buy and stick

up a rent sign and don't do anything for

neighborhoods. Now, what else are we

doing? Because, see, my goal is always

to be 10 steps ahead. I personally think

that my company is designed to be the

Berkshire Hathaway of the future. Now, I

know that's like it might sound

far-fetched or like an eye roller, but I

want you to know that that's my vision.

It's kind of like shoot for the moon and

if you miss, you end up amongst the

stars, right? It's like have a goal,

right? Uh, you know, like I have a

vision board on the wall I talked about

on my daily wealth, you know, 20 million

ARR from our software, right? That's my

vision board. I I have goals. I have

hopes. But in renaming the company from

House Hack to Reinvest, the reason we

actually did that had nothing to do with

artificial intelligence. It actually had

a lot to do with making home ownership

possible through stable coins like USDC.

Yeah, that's circles USDC. And yeah, I

happen to be a shareholder of Circle

because I think they went round trip

after IPO. And so I started buying the

dip after they bounced off of the 60

level, which I think, you know, is

potentially a good spot to buy them

because their financials are really

good. But this isn't a video topic on

what stock to buy like USDC, you know,

Circle. It's a video topic on, huh, so

housing policies that Donald Trump is

looking to implement might not actually

do what he's trying to accomplish.

Donald Trump is famous for holding up a

balloon saying, "Hey, should I do this?"

getting a lot of popular support or

criticism or commentary and then either

nothing happens or something happens

with a million different exemptions. So,

for now, we kind of just have to sit

around and twiddle our thumbs and wait

to see what actually happens. We'll get

a speech in Davos, but Davos is usually

not where he signs executive orders.

He'll just talk about how he's working

on affordability. And I doubt he'll

actually announce anything other than

maybe we're going to introduce a bill to

Congress. Okay. Well, if you hear that,

then you can pretty much expect that

nothing is going to happen because it's

a midterm year and you generally don't

see anything happen. Now, going back to

this making home ownership possible

through a stable coin like USC,

that's the whole purpose of why I

renamed the company reinvest real estate

invest or reinvest your profits or

proceeds or whatever into real estate in

a liquid manner, in a transactable

model.

I don't want to go too detailed on this

because obviously there's some benefit

to not revealing everything that you're

going to do. So, I'll just sort of leave

this as a little bit of a hint of

something that we are actively and

aggressively working on and we've got

plenty of a war chest raised now to make

it happen pretty soon. Now, I'd like to

go through a few other examples and then

let's finish this off because it's

getting a little bit long. Canada has

tried to ban investors. They couldn't

touch domestic buyers. Their laws didn't

allow them to touch domestic buyers, so

they only ended up banning foreign

investors. The Kiwis did this as well.

Ireland, they interestingly tried to do

a if you buy more than 10 houses in one

year, we will increase your tax duties

from 1 to 2% to 10% as a stamp duty on

bulk buys of real estate. If you buy

your 11th property, it affects all 10.

Now, the president can't tax without

Congress. We know that and so that's

unlikely to happen from Trump and the

same issues that you saw in the

Netherlands are what you're expecting in

Ireland where you're seeing regular

research and complaint that investment

properties the investment property in

market the investment property market in

Ireland constrained providing less

available or fewer available homes for

people to actually buy because investors

are usually the ones who are building

anyway. Take a look at this. Sherry

Fitzgerald estimates that the private

rental sector funds uh have invested

€3.7 billion euros in the Irish property

market since 2018. The majority of those

funds are pension funds driven by

customers requirements for long steady

income growth. They're the very

customers living in the homes anyway.

And research on investment property

markets in Ireland carried out by the

certain company found that the vast

majority of the capital spent on private

uh rental sector was built to rent in

2021 and the vast majority comes from

investment funds. And if you restrict

investment, you restrict building. So

they're seeing the same problems. This

isn't unique to America where we've seen

the problems via Stern or the

Netherlands via the Roderdam issue or

Ireland with the stamp taxes. The bottom

line is this is Donald Trump trying to

implement a populist policy or at least

talk about all these things he's going

to do as long as you vote for us in

midterms. The reality is it's unlikely

to change anything. And even if it does,

it will be loaded up with failures that

actually end up making housing more

unaffordable, actually benefit existing

homeowners and the wealthy incumbent

homeowners, as they're called in the

Roderdam study, and you'll make it

harder for people to rent a property

because supply will decline. So, I hate

to say it, but all in all, I like that

facts matter. And when you look at the

facts, this is a stupid policy. Donald

Trump would simply make things worse.

Now, what could he do? He could

incentivize building. If you incentivize

building, you will reduce the cost of

housing. If only there was a governor in

2021 who could have led the largest

state in the country to do exactly that.

Because maybe they happened to know that

the way to reduce housing costs is to

build more. And maybe if you streamline

building permits across an entire state

and you enable better transportation

between large cities and areas just

outside of large cities to rapidly

expand and build more master plan

communities with new schools and fire

departments and police departments and

infrastructure uh and you know malls or

whatever people want. Then you have more

affordable housing because you give

people more choice. But instead, and

once again, the government chooses to

stand in the way.

>> Why not advertise these things that you

told us here? I feel like nobody else

knows about this. We'll we'll try a

little advertising and see how it goes.

>> Congratulations, man. You [music] have

done so much. People love you. People

look up to you.

>> Kevin Praath there, financial analyst

and YouTuber. Meet Kevin. Always great

to get your take.