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Will Obama's New Housing Plan Be a Big Ripoff?
CNBC.com | January 09, 2012 | 11:40 AM EST

Diana Olick broke the news this morning that the Obama administration is very close to announcing a plan that would sell government-owned foreclosed properties in bulk to investors who intend to use them as rental properties. The hope is that by taking this inventory out of the sale pipeline, the program could help the broader housing market recovery more quickly.

This idea has a lot of support among some of the biggest real estate investors in the country. I first heard it touted at CNBC's Delivering Alpha conference in September during a panel with Bill Ackman of Pershing Square, Sam Zell, chairman of Equity Group Investments, and Barry Sternlicht, the chairman and CEO of Starwood Capital Group.

Ackman, Zell, and Sternlicht all sounded interested in the idea, but raised a number of challenges. The first is that it is simply more expensive to service single-family rental homes than large apartment buildings. The second is that because there is not much experience in this area, banks are hesitant to finance the purchases.

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