Canada

I read some good news recently. On an unrelated note I'm feeling slightly more positive about owning a home one day.

gasp

That's quite literally what bankruptcy proceedings are for.

The point is the value of their assets (i.e. the properties and associated cashflows) exceeds their liabilities (i.e. the loans) and so bankruptcy proceedings are required to figure out how to disburse the value of those assets to the debt holders.

Why not ban corporate ownership of any residential real estate that is in legally-habitable condition?

Because that’s becoming a massive problem when corps come in and buy up entire neighbourhood, only to jack up rents to the maximum the market will bear.

Better yet, make any personal ownership of homes beyond a certain amount - say, 5 rental units, not just homes - be classified as “landlording as a business”, and therefore ineligible for residential home ownership of anything other than their primary residence.

People who upgraded from a home and held on to it, or are renting out a “mortgage helper” suite in their basement aren’t the problem here… tens of thousands of these people competing against each other is what will make a marketplace competitive.

The problem occurs when someone with deep pockets runs out and buys 5, 50 or even 500 “investment rentals” and then parasitizes off the backs of working-class Canadians. These capture the market, limit/reduce competition by dramatically reducing players, and hold it ransom to the highest bidder, severely hurting working-class people.

Yep, it's the playbook private equity uses too. Buy a healthy profitable company and then leverage it to the tits to pay themselves back. The company is saddled with debt and an obligation to service that debt and creates a situation where the only way the company can survive is if they grow rapidly. Sometimes it works out and private equity hits big, other times it doesn't and the company goes under. But who cares, fuck those workers and their livelihoods right?

Agreed. Capitalism working as intended

It's all in the framing:

1. Create a company, making sure that personal assets are insulated from corporate liabilities.
2. As a corporation, raise funding through equity and debt to support investing in offices, staff, etc, as needed to operate a new venture. Lenders assess the business to determine if it's a good credit risk, making money if the business succeeds and taking a potential loss if it doesn't.
3. Company goes bankrupt.
4. Company assets are liquidated and disbursed to debt holders (who knew the risks going in) to minimize their losses while owners and employees are insulated from personal liability.

Why? To encourage entrepreneurship: who would want to start a restaurant or coffee shop if they knew they would be personally liable if the business failed?

Is it possible to misuse limited liability corporations for nefarious purposes? Of course. But it's absurd to imply they don't serve an important social purpose.

Actual footage from the seminar: https://www.youtube.com/watch?v=3Zx4ZeGjP3s

Sounds like Trumps grift

A. Butt

Offered without comment.

Yeah like the term 'undervalued markets' makes me shudder, you mean where people are living and have been for years - just aren't paying enough to in your eyes?

Landlords are the realest leaches