Chinese <b>Investors</b> Are Scooping Up NYC <b>Real Estate</b>, Aided by Like <b>...</b> | Real Estate Investing |
- Chinese <b>Investors</b> Are Scooping Up NYC <b>Real Estate</b>, Aided by Like <b>...</b>
- Using Your Strengths to Succeed as a <b>Real Estate Investor</b> | Hipster <b>...</b>
- Speaking On November 3, 2015 – Boston <b>Real Estate Investors</b> <b>...</b>
| Chinese <b>Investors</b> Are Scooping Up NYC <b>Real Estate</b>, Aided by Like <b>...</b> Posted: 27 Oct 2015 05:30 AM PDT  (Photo: Kena Betancur/AFP/Getty Images) Having lived through the Japanese investment invasion of the 1980s, I can verify that the Chinese are a different breed of real estate investor. It is hard not to notice the ramping up of international investments in U.S. real estate in the last decade—with Chinese and Russian investors grabbing headlines for billion-dollar deals. But unlike the Japanese giants of the eighties, today's Chinese and Russian buyers are here for the long haul—they are not just looking for returns on investments, but see our markets as their retirement fund. In the past year, the Chinese have invested almost $6 billion in U.S. real estate, $4.5 billion of which was in Manhattan. Chinese and Russian ultra net-worth individuals and businesses have become major engines in the market. These high-octane purchasers come with many nuances, which like-minded individuals can appreciate. As immigrants raised under communist rule, my Russian-speaking colleagues and I understand the mentality of our Chinese clients. This has translated into the common language of capitalism. The similarity has also fostered respect among local Russian businesses for Chinese clients, as we see large numbers of extremely private Chinese investors seeking advice from non-Chinese advisors, brokers and attorneys. With experience serving Russian investors, such professionals offer discretion, coupled with an understanding of asset management across US-Chinese borders. The concerns of these investors mirror those of the Russians, who have sought opportunities to safely park their capital. Today's China is reminiscent of Russia fifteen years ago. The two nations share a history of state-planned economies during much of the twentieth century, which in turn is reflected in the creation and management of contemporary assets in several ways. At first, Russia and China saw the emergence of their billionaires following the economic reforms of Deng Xiaoping and Mikhail Gorbachev. Almost none of these billionaires inherited their riches, since extensive private enterprise and private wealth were prohibited under Communist rule. Russian-speaking service providers working with Chinese in the U.S. understand post-communist mentalities and the pressures that were exerted by Communist and post-Communist governments. In fact, today's China is reminiscent of Russia fifteen years ago. Therefore, it is not surprising that many Chinese investors turn to these same Russian-speaking professionals. Having worked in this sphere for over 20 years, I have noticed a trend where brokers like Gennady Perepada, or financial advisors like Eugene Shkolnikov, have had great success in reaching these investors. In aiding Chinese consumers, the value of a shared post-communist mentality is a major benefit. Such individuals are far better equipped to assist the Chinese in achieving their investment goals. The ability to sell a product or service over the phone or internet is a talent in itself; but those who truly identify with the thought process of the client have a clear advantage. As a result of the common ground in Russian-Chinese client-agent relationships, a level of trust is present. Major real estate deals for vast sums of capital are closed based on recommendations. It is just as common for the same brokers to close a deal for substantial amounts online or by phone. Skype, WeChat and Viber have changed the world by allowing similarly disposed post-communists to move the needle on real estate prices in almost every major city in the U.S. Growing up in a country where politics and economy are one and the same, you understand that your wealth is as temporary as the government that is in power. What is driving these Russian and Chinese investors into the U.S. real estate market is the commonly used phrase, "a flight to safety." Growing up in a country where politics and economy are one and the same, one understands that wealth is as temporary as the government in power. With every change in leadership, both the Russians and the Chinese have experienced a change in net worth. "Getting" this mentality is an art that very few possess. Perhaps this explains the Chinese affinity to our government-sponsored visa programs. The EB-5 investor visa, for instance, allows investors and their families to become permanent residents on track to U.S. citizenship. In exchange for a capital investment of $500,000 in a U.S. business, an elusive green card can be obtained. It is therefore not surprising that in the past several years, applications for this program have been dominated by the Chinese. Instability and market fears are the reasons these foreigners park their money securely in the U.S. market. While politics and international market fluctuations have slowed real estate purchases by Russian buyers, the recent stock market crash in China has resulted in a surge of Chinese investment in America. High net worth Russians have been investing in U.S. real estate markets since the late 1990s—the Chinese have only become particularly active in our markets in the past several years. While they are about 10 years behind Russian investors, the Chinese are arriving in larger numbers with increased appetites. Understanding the cultural differences and taking advantage of the common history has given many professionals serving these two groups a leg up. We have yet to see what will become of this next wave of immigrant investors. My feeling is that we are just seeing the tip of the iceberg. The Chinese are coming, and this time, the Russians are paving the road. Edward Mermelstein is a Ukrainian-born American attorney, consultant and developer based in New York City. He is a founding partner at Rheem Bell & Mermelstein and President of COJECO.  |
| Using Your Strengths to Succeed as a <b>Real Estate Investor</b> | Hipster <b>...</b> Posted: 27 Oct 2015 08:24 AM PDT
Strengths vs. WeaknessesWe all have strengths and we all have weaknesses. Growing up we were taught that we need to build on our weaknesses. I've come to the realization however that building on your weaknesses is not the way to become an over-the-top rockstar. Why? You can only increase a weakness so far. It will be a great learning experience to explore things you aren't as good at, and it never hurts to get some experience in whatever that skill may be, but you will only get so good at it. Whereas if you focus on improving your strengths, the sky is the limit for how good you get with those strengths! The point of this article is not to argue whether you should build on your strengths or weaknesses, or even to discuss in detail any logic behind any of it, but I give you that little blurb to get you thinking about your strengths and weaknesses. Think of what your strengths and weaknesses are, in general not in real estate. Go ahead and do that now. Why? Using Your Strengths as an InvestorAs I mentioned, there are so many routes you can go as a real estate investor. To name a few, and this list is far from inclusive: landlording/rental properties, flipping (flip to hold or flip to sell), wholesaling (even though this isn't technically an investing route), tax liens, notes, residential, commercial, real estate investment trusts (REITs), land development, mobile homes… and the list goes on. Each of those avenues involves different types of skills required to succeed. For example- flipping. If you are flipping a house, rehabbing is required. Rehabbing involves the physical condition of a property. You will need to understand at least the basics about the physical structure of a property (electrical, plumbing, flooring, etc.). Even if you aren't the primary person doing the work, you still need to have a rote understanding of those components so if a contractor tells you something, you know if he is on par or off in left field. If you don't have a functional understanding of this type of thing, you can get taken for all day long. You will have a hard time assessing potential properties to take on because you will be at the sole mercy of someone else telling you things, having no idea if they are legit. It's like me taking my car to a mechanic. I hate doing that because I know so little about cars that a mechanic can usually tell me whatever they want to about what is supposedly wrong with my car and I just have to believe it because I don't have enough knowledge to make an educated decision otherwise about what should be done to the car (and for how much money!). Not knowing the basics puts me at risk for spending a lot of money on my car when I don't need to. While it is frustrating, it's not going to kill me if I get snowed. If I were to flip properties, however, I think it is critical I know the basics. If a "mechanic" is able to pull a fast one on me, I could be in a huge heap of trouble. Way more than if I get taken for a few hundred dollars on a car fix. So for flipping, the more skill you have in repairing, building, or developing properties, the better. Another example- wholesaling. I know one aspect of wholesaling involves making horrendous low-ball offers to sellers trying to convince them to sell their property to you as cheap as ever-living possible. This takes a certain skill (and pair of you know what) in people skills, maybe even in bluffing skills, and insane negotiating skills. I don't flip or wholesale. Why? Because I have absolutely no interest in repairing things or understanding the inside guts of a property. I'm certain I could be really good at working the guts of a property if I learned how to, but since I have no interest in it I will never be able to learn that much (I'll drift off mid-lecture). I also have dreadful negotiating skills and I can't bluff to save my life. When I'm bartering, I'm only good if I'm certain I'm right about what price it should be. When I'm playing poker, I only get rowdy with my bets when I know for sure I have a killer hand. I do, however, have amazing problem solving skills. I love figuring out how to fix something from a big picture point of view. Not from the trenches, but from high up. I own rental properties. This is perfect for that level of problem solving! Because I use property managers, I don't have to get in the trenches and get my hands dirty. Instead, I can sit back and assess how the properties are going and if anything isn't right I can figure out the best solution to the problem and then pass that solution on through my people working on the property. That's how I like to roll. From a distance. I have no interest in fixing a leaky roof or yelling at a problem tenant, nor would I be good at either of those. I have no interest in roofs, and therefore no strength in fixing one, and I'm way too shy to get in a bad tenant's face (surprising for those of you who know me, I know). What If?What if I tried to flip or wholesale? Could I do it? Absolutely. I'm incredibly smart, I learn things quickly, and I've always been known to make what I want to happen, happen. I could do either of those, no question. But I would be swimming upstream the whole way. I could do it, I could be very successful at it, but it would take me double (or more) the effort than it would a lot of people. Why? Because I'd be fighting against my natural weaknesses and even more devastating than that, my interests. Whereas with rental properties, I have succeeded extremely quickly because I was working in the same direction as my strengths and my interests. Note: It should be fairly obvious by now that typically strengths and interests tend to be directly proportional. I know a fellow real estate investor who recently branched into the Atlanta market as a flipper. When I first heard he wanted to do that, I thought he had lost his mind because the Atlanta market is tough even for the pros these days and he is way closer to being a newbie than a pro. Even if he was a pro though, I still would have thought he was a nut for trying to break into the Atlanta market. Oh, and to make it insanely harder on himself, he lives in San Francisco so this is a long-distance thing for him! I caught up with him recently and was shocked to hear how well he is doing. Not because I thought he wasn't smart enough but because even the smart guys can get defeated in Atlanta right now. Contrary to what happens to most there today, he is rocking and rolling and it's like someone handed him Easy Street on a silver platter. Turns out he is an absolute natural in this arena. When you are that naturally skilled at something, you are bound to succeed if you try. I can't imagine 99% of people pulling off what he has in Atlanta… Read The Rest On Bigger Pockets. |
| Speaking On November 3, 2015 – Boston <b>Real Estate Investors</b> <b>...</b> Posted: 27 Oct 2015 06:52 AM PDT
Agenda below. It is FREE for anyone who mentions my name! 5:30 PM – "Meeting Before The Meeting" – Multifamily Investing with Charles Dobens 6:30 PM – Registration & Vendor Area Open 7:00 – 7:30 pm – Announcements, Deal Making, Speed Networking 7:30 – 8:00 pm – What You Need To Know BEFORE Placing An Offer. Lee Abdella of Walsh Home Inspections will address what you should look for before putting an offer in on a house or before waiting your home inspection! 8:00 – 9:00 pm – Mass Security Deposit and Rental Law with Richard D. Vetstein Esq. Boston Real Estate Investors Association on Facebook I look forward to seeing you next week! -Rich Rich |
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