[chatmasta]

I'm expecting a significant rise in the number of homes for sale when interest rates spike. Many multi-property landlords are relying on "hard money loans" or "bridge loans" to finance their properties. The nature of these loans is that they put the asset itself (i.e. the house) up as collateral, but also allow the landlord to leverage the loan into another one. So a landlord can put just a little bit of money down on a house, and then leverage it into a chain of multiple houses.

When interest rates spike, landlords lose leverage ability and may even have to refinance their loans. Spiking interest rates will lead to an influx of homes into the market as landlords who did not plan well enough for the spike are caught underwater in the same way as residential homeowners were in 2008.

Private equity firms are backing the loans, so maybe they'll just take the houses when interest rates spike, and rent them to tenants themselves. In the future, we'll all be renting from the Blackstone group!

Disclaimer: I am very uninformed on this subject and do not know what I'm talking about. :)