Answer Man: Are corporations buying up homes here? What's a 'revocable trust?' An 'LLC'?

Today’s batch of burning questions, my smart-aleck answers and the real deal:

Question: Could you explain the nature of "Revocable Trusts" and "LLCs" that are increasingly appearing as property buyers in the weekly Buncombe Property Transfers? Not that they are suspicious or illegal, but given the shrinking market for home buyers in Asheville, who is buying these homes?

My answer: Look, I've got to put all my extra cash somewhere. I knew charging a fee per burning question would be lucrative, but who knew it'd go this bananas?! At any rate, please just skim over any housing acquisitions by "AnswerMan LLC" you may spot in those property transfers...

Real answer: Buncombe County Register of Deeds Drew Reisinger offered a good explainer on these terms, but first let's address the issue of outside corporations buying homes. This has definitely been a trend in some larger cities, and about a year ago I had asked Reisinger's office to provide a list of buyers.

At that time, Reisinger and I agreed there weren't an inordinate amount of outside corporations on the list. But...

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"We are seeing more individuals buying investment properties as Limited Liability Companies (LLCs)," Reisinger told me via email this month. "A lot of LLC’s are just home flippers, finding an opportunity, putting in the work and making a decent living."

Generally speaking, though, we're still not seeing the mega-corporations swooping in.

"There have been a handful of articles recently about big, wall-street-backed corporations and private equity firms buying up housing stock in some North Carolina cities, making it much more difficult for people to find housing," Reisinger said. "While this is happening in Wake County and Mecklenburg County, we are not yet seeing those entities named in those articles buying up residential homes in Buncombe, according to property records."

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So, that tracks with what Reisinger and I discussed last year. But we'll keep tabs on it.

As all of us know, the real estate market has been absurdly hot lately, with prices skyrocketing and locals often losing out on homes to big-money out of towners. I just recently wrote about the median sales prices for homes in Asheville coming in at $440,000 and $405,000 in Buncombe.

"There has been a lot of real estate activity coming through the Register of Deeds this past year," Reisinger said. "Anecdotally speaking, I’ve heard it’s incredibly difficult to find anything resembling an affordable home."

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The reader had sent in two examples of LLCs that had bought residential properties, and Reisinger checked into them, finding, "It looks like the managing members of those North Carolina LLC’s are local folks likely buying investment properties."

By the way, Reisinger offered a solid pro tip on checking out LLCs, one I've used many times.

"In North Carolina, if someone wants to learn the identity of the humans behind an NC LLC, our Secretary of State has an incredibly user-friendly search tool at sosnc.gov," Reisinger said. "Your readers can quickly find the managing member’s name, mailing address and annual filing reports there."

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You can often find the "registered agent" for a corporation, but keep in mind this might just be an attorney or other person hired to represent the company. But I have found plenty of company officers on the site and the annual reports LLCs file.

On an interesting side note, Reisinger also pointed me (and you) to an article in Vox titled: "Wall Street isn’t to blame for the chaotic housing market. The boogeyman isn’t who you want it to be."

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The author ends with this: "The role of institutional investors is still being studied, but the popularity of the narrative strikes at something dangerous: People want a convenient boogeyman and when they get it, they often ignore the structural problems that are harder to combat. Housing undersupply is the result of decades of locals opposing new home building. It’s not something that can be blamed on Wall Street greed and the nefarious tinkering of a private equity firm. And that’s a much harder truth to stomach.”

The author also notes the main reason it has become so profitable for some firms to buy single-family homes "is the preexisting housing shortage created by local governments and certain homeowners seeking to block new homes from being built, leading to a nearly 4 million home shortage nationwide."

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Reisinger views housing as a human right and says every tool available to build more housing should be employed. As he's always helpful with the data, I'll allow him a moment on his soapbox. It's good food for thought, too.

"We need our state legislators to update our laws to make inclusionary zoning legal, so county planning ordinances can require a given share of new construction be affordable for people with low to moderate incomes," Reisinger said. "In the meantime, something challenging we can all do is change our fierce opposition to new the construction in our own backyards."

This is the opinion of John Boyle. To submit a question, contact him at 232-5847 or jboyle@citizen-times.com

This article originally appeared on Asheville Citizen Times: Answer Man: Corporations buying up homes here? 'Revocable trust? LLC'?