Corporate welfare queen Fannie Mae has decided to spread their taxpayer provided love, doling out taxpayer subsidized sweetheart deals to a small number of lucky real-estate investors.
Let’s examine one of those deals, Fannie Mae’s SFR 2012-1, which includes three groups of properties in Florida.
Fannie Mae sold 699 Florida properties, appraised at $81.5 million, for $12.3 million cash to San Diego based Pacifica Companies. In exchange, Pacifica must rent the homes, paying Fannie another $78.1 million from rental proceeds, but during that time Pacifica is allowed to keep a 20-percent management fee plus 10-percent of rental proceeds.
If that doesn’t sound like money for nothing, like the song goes, Fannie sweetened it by adding a trigger allowing Pacifica to keep 50-70 percent of rental proceeds, depending upon performance, after Fannie’s been “paid” (read: collected rent) amounting to $49.3 million.