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How to own $150 Million of Rental Houses in One Stock

By Dr. Steve Sjuggerud
Monday, October 8, 2012

Thomas Siering is taking advantage of the best investment deal around right now...
Thomas is the president of Two Harbors (TWO). On a recent conference call, he told listeners, "Two Harbors has invested approximately $150 million in its portfolio of single-family residential properties of roughly 1,370 homes." 
Regular readers know I think residential real estate is the most awesome investment opportunity in American history. But it's been tough for individual investors to take advantage.  
That's what's go me so excited... 
On the call Thomas said, "We continue to acquire properties in Arizona, California, Florida, Georgia, and Nevada... With home prices in some of our target markets down 50% or more from recent peak levels, we have been able to acquire properties at significant discounts to replacement cost."
Two Harbors bought its entire $150 million portfolio this year. Importantly, TWO announced plans to "spin off" its residential real estate portfolio into a stock that only owns (and rents out) residential real estate.
The new company will be called Silver Bay Realty Trust. Silver Bay will be entirely dedicated to purchasing, managing, and renting residential real estate. Two Harbors will own a large stake of the company. (That means you will own Silver Bay if you already own Two Harbors.) 
My True Wealth subscribers who own Two Harbors already own Silver Bay "at cost"... Said another way, we own $150 million worth of rental houses purchased at significant discounts to replacement cost.
Like I said, it's been tough for individual investors to take advantage of the opportunity today in residential real estate. But Silver Bay should change that.
We should get the full story on Silver Bay this Wednesday...
You see, on Wednesday, Two Harbors is hosting an online "Investor Day." A transcript of the speeches and materials will be available to everyone the day after.
I urge any investors in Two Harbors and anyone interested in buying residential real estate through the stock market (through Silver Bay) to check out what comes out of that meeting.
True Wealth subscribers are already up nearly 40% in just 15 months on shares of Two Harbors.  
And the shares are still attractive... Two Harbors continues to make good decisions. There might not be a whole lot of upside from here in the stock price... But the 12% dividend is hard to beat.
Check out Two Harbors (TWO). And for the most up-to-date story on Silver Bay, check in at on Thursday and read the transcripts from Investor Day.
Good investing 

Further Reading:

Catch up on Steve's cheap housing argument here...
With housing more affordable than ever and mortgage rates lower than ever, we have incredible upside potential.
I strongly believe the bottom is in, right now. Today.
At artificially low rates, you should consider a new mortgage if you can afford it... whether it's buying a new house or refinancing your existing one.

Market Notes


Over the past year, Home Depot has turned in an incredible performance... and it's another sign that "things can't be all that bad" with the U.S. economy...
In 2012, we've highlighted many charts that reveal an important idea: While the news for the U.S. economy isn't rosy, it can't be all that bad. For example, we've noted the tremendous share price strength in high-end homebuilder Toll Brothers and giant hotel operator Wyndham Worldwide.
Another major development here is the soaring share price of Home Depot (HD). As America's largest home improvement chain, it rises and falls on the country's ability to spend money on new bathrooms, remodeled kitchens, and backdoor patios. This makes the share price of Home Depot a good gauge of what's happening in America.
Today's chart of Home Depot shows how things are really, really "happening." Over the last 12 months, shares are up nearly 100%. And the stock is closing in on its all-time high, last seen over a decade ago.
We know our readers are bombarded with claims that the U.S. economy is in the toilet. And sure, someday it might be. But as long as Home Depot is doing brisk business and enjoying a huge bull market, we'll say "things can't be all that bad." Trade accordingly! 
– Brian Hunt

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