North Omaha impacted
Angel Starks and her real estate agent colleagues began to notice a sharp increase in out-of-state buyers. They took note of their new tactics.
These buyers pay in cash. They waive standard inspections. They make offers over the list price.
That’s the aggressive approach that Vinebrook takes as well – an approach outlined by one of Vinebrook’s local contractors, longtime Omaha-area real estate broker Bruce Powell, in an email sent to real estate agents early this year.
The email was forwarded to the Flatwater Free Press by an industry insider, not Starks.
In the email, Powell said Vinebrook had bought “over 16 million dollars’ worth of property” in the Omaha metro in the past year. “We want to keep that going this year,” he wrote.
“We can buy them 1 at a time or if you have an investor that has 5000, we can do that also… Our offers are cash, quick closings. Once we do our walk through there (is) no formal inspection, termite inspections or appraisal.”
Vinebrook has amassed $55 million in cash, according to its most recent filing. It uses that money as a hammer, making cash offers that most Omahans – people who must take out a loan to afford a house – can’t beat.
“That puts first-time home buyers at a disadvantage,” said Amanda Brewer, CEO of Habitat for Humanity of Omaha. “They can’t compete with out-of-state investors who have cash offers.”
A cash sale over the list price often increases the home values on the block and neighborhood, said Starks, a real estate agent who sells homes all over the metro, including in North Omaha.
That’s good if you are selling a home. It’s not necessarily good if you are a North Omaha homeowner. Property valuations in the area are now the most undervalued in the county. Valuations – and the resulting tax bill – will likely soon increase.
And it’s very bad if you are an Omaha resident hoping to buy an affordable home in the northeast part of the city.
“It’s pricing everyone out,” Starks said. “If there’s nothing for anyone to buy…we’re giving them a mindset that they are meant to be renters forever.”
“That should be a choice, not a corner they’re painted into.”
Black Omahans are especially impacted, said Pierce Greenberg, a Creighton professor who has studied eviction and homeownership issues.
Most Americans’ biggest financial asset is the home they own, Greenberg said. It’s the big-ticket item they sell or pass to the next generation. The racial wealth gap is exacerbated by the fact that fewer Black adults own their own homes.
“We can’t untether this conversation from talking about race,” Greenberg said. “For this to be happening in neighborhoods with a history of racial segregation…where all of this is playing out is an issue that can’t be ignored.”
“That’s a problem”
Even Omahans who have benefited from Vinebrook’s emergence aren’t always sure the company’s presence is good for the city.
Nate Bjorklund had owned and rented out a small two-bedroom house on N. 33rd Street for more than a decade.
Then, encouraged by a local property manager, he put it on the market for “a crazy number.”
Vinebrook counter-offered “with not quite as crazy of a number” he says. Just like that, the deal was done: $72,000 in cash, more than triple what Bjorklund paid for the house in 2008.
The local landlord was thrilled. At least until he saw what Vinebrook was doing with the home.
The tenant living in the home when it was sold was “fantastic,” Bjorklund said, but Vinebrook had no interest in keeping her there. Instead, they wanted her to leave so they could put in new carpet, new paint – and a new, higher monthly rate.
Bjorklund had rented the home for $695 a month, a number he felt was fair and could always attract a tenant. Now, he said, Vinebrook has it on the market for $995 a month. The home has sat vacant for months, its old owner said.
“My wife and I are very small time, and we understand that if you can take care of people, karma has a way of coming back to you,” he said.
“Unfortunately, I don’t think this group really gets that,” he said of Vinebrook.
Shauna and Andre Mackins are also frustrated with Vinebrook.
The renters live in a Vinebrook-owned home on Maple Street. They experience nuisances that will sound familiar to many renters, no matter who their landlord is: The screen door is busted, they said. Cold air pours in through the sliding doors in the winter.
But the Mackins said they have also faced real issues with Vinebrook’s operation. When Shauna Mackins tried to pay February rent – on the last day before an eviction notice would be sent – she said she got caught in a customer service nightmare. One Vinebrook representative took down her info, promised to call her back, and didn’t. She called back, and the same thing happened. She tried to contact the district manager to no avail.
The clock ticked toward late afternoon.The banks closed for the day. An eviction notice was automatically triggered by the company.
The Mackins racked up hundreds of dollars in late fees to avoid eviction. Much could have been avoided, Shauna Mackins said, had she simply been able to speak to the correct Vinebrook representative.
“Buyers beware,” she said. “I wish we had time to do our research (on Vinebrook) before we moved in here.”
In an email, Vinebrook co-founder Sprong said that Vinebrook takes resident concerns seriously. They monitor these requests and the company’s response time, he said, and are working to “enhance our customer service offering,” he wrote.
Vinebrook is far from the only national real investment company plunging into local housing markets.
For example: Invitation Homes is a company built by Blackstone, the world’s largest private equity firm, which started buying up houses in the wake of the 2008 mortgage and foreclosure crisis.
Today, Invitation Homes, which has spun off from Blackstone, is a massive publicly-traded company. It owns and rents out roughly 80,000 homes – making it the single largest landlord of single-family homes in the country.
Invitation owns more than 13,000 houses just in the Atlanta metro area.
