In this excerpt from The Call, Hedgeye REITs analyst Rob Simone provides an important update on one of his Best Idea Shorts, Invitation Homes (INVH). The company, which is America’s largest landlord for single-family homes, is embroiled in a whistleblower lawsuit alleging they intentionally and systematically failed to obtain building permits for renovations to single-family homes in California.
“Our base case is that this case is not dismissed,” says Simone. “The plaintiff’s attorneys are arguing for this to go straight to discovery, and we think discovery will be particularly damaging for Invitation Homes.”
Simone then flagged a compelling portion from the plaintiff’s response which encapsulates the reason/incentive why Invitation Homes allegedly failed to pull permits, etc:
|
“The complaint alleges the defendant engaged in this fraudulent scheme, not only to avoid permit fees, but also to avoid the necessary time taken in permitting, so as to get the properties into the rental market as quickly as possible.” |
“We’re staying short it,” Simone tells Hedgeye CEO Keith McCullough, who then shares some of his thoughts on Invitation Homes.
