Create a company that offers short selling homes?
Here is what my company will do:
Allow homeowners to put up their house to be "borrowed". The "borrower" will proceed to sell the house to a buyer. Of course, there will be an interest rate for borrowing this house.
The short seller is in debt of the house. He waits until a housing crash and rebuys it back.
If housing prices crash 50%, he rebuys it back for 50% of the value and he takes the remaining profits.
My company takes a small cut.
Let's use some real world values:
$500K house in Toronto is up for borrowing to short sell.
Short seller borrows it and sells it immediately in Dec 2013 for $500K.
Let's assume that there is a housing crash in 3 years and prices crash 50%.
Short seller pays 3% interest rate each year for 500k, 400k, and 250k for the declining asset: $34K
Short seller rebuys it back for 250K and pays his debt back to the original homeowner.
Short seller profit: 250-34=216K
My company takes a small cut of 1K.