All Forum Posts by: Account Closed

On a flip I did, a prospective buyer actually asked me for pictures of what the house looked like before and actually I think the changes were so drastic it really made my case for the price. I am very open to prospective buyers (if they ask) if this was a rehab or recent renovation. I take great pride in my work and am the telling of the story of the house as part of the sales pitch. I insist that they get independent verification through their own inspection etc. The client I showed the pictures to ended up buying the house.

No but I was recently at an auction that featured an online and call in component. The auctioneer had an assistant with a phone and a computer and were taking bids in online, with the commentator calling out the bids. Some online bids need to be made before hand kindof like Ebay. In the end of the auction, the online buyer did get up there but a physical buyer did win the auction.

You can get your real estate brokers license in about 2 weeks if you study your butt off. There are some good online classes (Kaplan sucks though). However, be warned that the initial cost outlay is expensive. Only only do you have to pay a few hundred bucks for the test, a few hundred for the state license and a thousand maybe for the MLS access.

Regarding feeling comfortable, I have to tell you that I never really feel comfortable. There is always risk involved - that is where opportunity lies, and also the excitement. You will probably not find a no risk investment. If you do, then you're probably missing something.

To mitigate risk, buy low sell high, this means looking at places with a higher ARV. A higher ARV means that if you buy it for cheap you have that much more leeway to do renovation/screw up the project. Many times a lower price means more work. However, bank pricing of properties has stopped making a lot of sense due to such a large portfolio of empty homes. On this level, your ability to find the ones that are priced cheaply but only need an aesthetic update, is where the money is.

You and your wife would make a great team in this business!!! A lot of Chinese keep money in the family, even if they made it and give it to a relative to invest. In this case, I learned recently that if a foreign national sends money to a US citizens as a gift, it is tax-free. Its free money for the US, and after the money is spent and income is generated it is taxed. If the money ever wants to leave it is taxed. But that is how families I gather are doing their investments in the US, aside from those with more sophisticated investment vehicles.

You should get your real estate license. This will allow you unfettered access to MLS real estate data. If you simply get a real estate agent, a local agent will be provide you with local knowledge. In terms of deals, a local agent may also have private deals or connections with other sellers. If you find a local agent that simply puts you on an MLS search then you could've done that on your own or with an agent that you have used in the past.

If you opt to find an agent, likely they will ask you what your MLS search criteria are and they will send you daily or semi daily updates of new additions to the MLS that fit your criteria. You will also be able to browse it. A good thing to have going to a search of both active and for sale real estate, and recently closed. This way you can estimate your ARV and calculate the parameters of your rehab project. Be prepared to do a lot of the digging yourself - a realtor may decide to show you a few specific places to his liking, but you going to properties yourself and bringing in help (GC, inspector, etc) evaluating the deal is the only way to really know if you have it right. I love digging in the MLS its fun to just browse. A good trick to track flipping activity is when looking at Closed properties within a 2 year period or so, you can sort the column by street number. This is an easy way to brows the MLS and see if you have a match. You can then assess the deal and see how this investor made this money. Another way you know its an investor is sort your search by financing type. This way you can have an indication of whether it is an investor because of the usage of cash.

Regarding specifically places like Dolton, Country Club Hills, and Calumet City I have to tell you that I do not know anything about these places. However doing a brief analysis on Dolton, I myself would probably not invest there. True, there are many many homes for sale that are very cheap, as low as 5k. However, most of the Closed Sales on the MLS are all shortsales or foreclosures selling around the 25-50k. All the sales on Dolton between 8 June and today (totalling 20) were foreclosures, except 1. In this situation it may be hard for you to find a buyer for your final rehab because of the sheer amount of competition you may have. Some investors may find opportunity in this, but just for me and the circumstances of my investors I wouldn't do it. A lot of course dpeends on the condition of a specific house.... Now, it looks like almost all of these houses were bought in cash, with the exception of 1 conventional loan and a few "others." "Others" are sometimes wholesalers and other people in the biz. You can see that in Dolton there are lots and lots of investors buying property there. It is likely that they are buying for rental on a long term basis. The angle on this is specifically targeting an investor buyer for your rehab and having a buyer lined up for your house. If you can do it cheap and nice, then I am sure investor clients will be interested.

On further consideration, knowledge of foreign investment law would be highly useful and would probably be one of the first questions one would ask: tax laws and reporting requirements, immigration laws, what can a foreign national do to move to the US? Can a green card be "bought?" (see: http://www.uscis.gov/portal/site/uscis/menuitem.eb1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextchannel=cf54a6c515083210VgnVCM100000082ca60aRCRD&vgnextoid=cf54a6c515083210VgnVCM100000082ca60aRCRD)?

Part of your service as a real estate consultant or Realtor or whatever, is being able to answer these questions. Being able to set up the immigration lawyer (yes I guess lawyers are useful sometimes) and the client and be project manager for the client.

Understanding foreign real estate practices and customs can help you in explaining the process here in the US. All of this and other "client service" can sometimes mean the language part is not such a big deal. Because of the clients you may find in the previous post have global experience anyways, English is sometimes a better more precise communication. English is seen as the "business" language. Obviously not that many people speak English and it is true that most of the new wealth are people that cannot speak Chinese (think ex-communist factory managers that became owners and now millionaires because they make 20 billion bottons a year).

I always had a thought to goto Shanghai and hold a seminar. I have not had the chance to prepare and do it, but if some enterprising fellow wanted to I am sure people would pay you just to hear about investing in US real estate. A comprehensive presentation explaining why the real estate crisis occurred and what the current situation is today, opportunities exist, show a few of your photogenic flips, show a proforma earnings statement of a rental, provide some variety and people will be drooling to invest with you.

If you were lets say American and had a Chinese partner it could give you a lot of credibility and provide comfort for local people to ask questions and engage you further. On one hand being a white person still means you are treated like a king in China. You would give legitimacy to the presentation as a "real American." On the other, a Chinese partner would give you the ability to open a Chinese company (Chinese ownership or joint venture is a requirement) to manage transactions and provide a tangible business center to engage clients as you grow.

Thats a free business idea.

One of the most important aspects of doing business with Chinese people is the concept of guanxi (guan she). You can learn all about it by doing a google search. Secondly, it is the language requirement. All of it relates to trust and security, and not wanting to get ripped off. I have been successful in targeting Chinese customers by advertising in Chinese language publications both here and in the US. Many Chinese newspapers in the US sell only local advertisements. When I advertise on those newspapers I use a phone number that lets me know I need to answer the phone in Chinese when it rings. I am sure a non-Chinese speaker can successfully target Chinese clients provided they have some type of Chinese-speaking resource such as a language proficient staff member. Part of it is knowing how to give face. By speaking in Chinese you as an American are going to their level to reach out to them. Psychologically it makes a huge difference as the Chinese have a sense of cultural vanity. Probably a bad term to use, but its all about giving face.

In my experience in the last 3 years, I have had a few Chinese buyers that fit different profiles. I think maybe some anecdotal information about these characters can give you more information. Like the other posters mentioned, most clients are first generation Chinese that are naturalized US citizens. Most have made their money here. However, one person I have worked with, a young woman from Macau, only deals in cash and for a 30 year old seems to have millions to spend on real estate... I have asked for the source of her funds and she says these are family investments. I believe China-based family are sending money to invest. I do not know her family background and trust me I have tried searching. She is a US citizen but she said she only moved to the US for university. Very savvy on the part of the family - direct their kid to buy real estate in the US since they're here anyways for university.

For investment purposes many Chinese investors are seeking to shift away from Chinese property investments. Firstly, the prices of Chinese real estate, especially in major cities like Hong Kong, Beijing and Shanghai are so high that potent fears of a bubble have pushed the Chinese Communist Party (CPC) to institute capital controls to curb real estate speculation. (From the FT: http://www.ft.com/cms/s/0/5f86cb48-2cad-11df-8abb-00144feabdc0.html)

Flipping actually holds a really strong place in Chinese culture, and is complex dance between private investor and big time developer that has made some of the richest people in the world (such as Sun Hung Kai, and Cheung Kong the firm of Li Kashing). In Hong Kong during 80s-present, the idea of 炒樓 (translated: fry buildings) was so prevalent that housewives were doing it as a side job and being wildly successful. This continues today. The appreciation alone is comparable if not more drastic than the rate of value increases that we experienced in the US. Also, because of the sheer amount of people China have there is constantly a demand for good real estate. In Hong Kong, I know that the average apartment that is pretty poor on the inside and may be tiny but still cost $1million or more. If you goto http://www.midland.com.hk/eng/ you can see a few samples of Hong Kong real estate.

Looking at their top "hot" picks you can see a sample: Kowloon, 2172sqft, $38m ($4.8m USD); Tung Chung (near airport) 1,237' Sq.Ft. HK$5M (640,000 USD); North Point, 1,068' Sq.Ft. HK$12.8M ($1.6m USD).

The situation in Shanghai is the same. It was mentioned to me by someone that the rate of speculation in Shanghai is very high and that legitimate home buyers and smaller investors are priced out of the market. Those with international connections, such as the Chinese that immigrated to UK, Australia, Canada and the US, are taking advantage of this unique diaspora to take advantage. I am not saying that there are a lot of these people, but I would say these are the sophisticated investors that will probably end up buying a lot of houses, and they are starting to come to the US to find the great deals. Good luck!

This article is mainly about Chinese investors in the UK, but let me tell you that they are here in the US as well. According to the article, investors from China and Hong Kong make up 11% of all UK sales.

Perhaps the most interesting part of the below article is the mentioning of Chinese banks opening branches here in the US, to specifically cater to Chinese buyers and the financing of US property purchases.

Proper marketing to these types of clients, including those from other cash rich countries in the Middle East (UAE, Saudi) and South America (Brazil) can prove lucrative.

The key to connecting with Chinese clients in particular is to present an offering of what else can they get in the US with the purchase of a home? The key is that Chinese buyers want to move here, or send their kids here for education.

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Testing the waters
Chinese Economic Review

http://www.chinaeconomicreview.com/cer/2010_08/Testing_the_waters.html

J Scott Thanks for your reply. I actually do get that a lot that I am unfocused. The truth is I really try to be focused but I am highly stimulated by a variety of things, but because of my obsessive personality I guess I have been able to be successful at many things at the loss of many nights and days of sleeping or entertaining.

I do haves lots of small businesses, including an educational nonprofit, they all grow every year, some are more successful than others, but each of them I put my heart into it. I do it because I love it, and the money is what keeps it viable.

Perhaps you are right, maybe I should find a new real estate attourney. Unforuntately there are too many attourneys involved around my family and I don't really trust any of them professionally.

The problem is that I am highly distrustful of people especially lawyers. I have worked with many many and I just don't like the profession. I know too many lawyers that will do what you want even though its the worst way to go about things, or illegal, but lead to you believe it is both cheap and profitable, and legal, to do them. As you can probably tell I have been screwed by lawyers before.

I don't like finance and especially trading, but its a lucrative day job and I am really learning about how the world works. Its actually really screwed up how the big banks, central banks (sovereign entities) and other funds have really a strong grip on markets and that their constant and open manipulation means that the markets are rigged against us the small players (and when I mean markets, I mean everything from securities and equities, to commodities, to currencies). This is why I decide to make money their and reinvest it into real estate on a personal and private basis. Also, in this job, I also am making the connections with those who will hopefully one day fund the development of my future skyscraper.

Speaking of lawyers and sadness, my girlfriend just reminded me of a good friend of mine who has a law degree from a good but not prestigious law school here in Chicago, but now sells woman shoes at Macys. Lawyers are a dime a dozen and there are probably many who will get their real estate agent license soon (lawyers are exempt from the coursework). Starting out, its probably more profitable nowadays to be an agent rather than a lawyer.

Also, sorry if I sounded arrogant in my posts. My girlfriendn justread it and she said I sounded like an a-hole. I am not trying to look down on real estate agents and lawyers, I'm just answering the initial question.

In my opinion, Realtors are NOT worth the commission. Especially on the buy-side since a lot of banks here are giving buy side realtors better commissions. I recently received back $6000 in commission on a 135,000 purchase (my own purchase). NOw why would I hire a realtor to do that for me when I could do it myself? Thats like almost 4.5%!!!!!!