Thanks to Burbed reader Real Estater for bringing this up in comments yesterday.

The Chinese Go on a Global Homebuying Spree

Kelvin Wong, Nichola Saminather and Hui-yong Yu, On Friday June 24, 2011, 8:08 am EDT

On a sunny Saturday in early June, Larry Zhou strolled the floor of a property exhibition in Hong Kong, wondering whether it was time to buy another home — not in the city, where residential prices have soared 50 percent in the past two years, but maybe in Thailand or Malaysia. "My wife and I have been thinking about investing outside of the country since we already own an apartment in Shanghai," says Zhou, a 38-year-old civil engineer, who was visiting the Hong Kong Convention and Exhibition Centre before wrapping up a business trip and returning home. "I’ve known people in Shanghai who like to bring their money and invest in Hong Kong properties, but I think Hong Kong is way too expensive."

The two-day event that lured Zhou and 3,000 others is one way that China’s expanding wealthy and middle classes are finding investment properties and second homes around the world. They are grabbing everything from $68,000 foreclosed condominiums in Florida to $2 million beachfront villas in Vietnam. "Some of them will buy homes considering better education opportunities for their kids, while others look for immigration options," says Mo Tianquan, founder and chairman of Beijing-based SouFun Holdings (NYSE:SFUN – News), which runs China’s biggest real estate website and organizes buying excursions abroad.

Vietnam beachfront villas?  Don’t be silly.  Every single one of them wants to buy a house in… Vancouver?  The smart ones, though, are buying in Silicon Valley, especially places smart enough to work the magic word “Cupertino” into the listing somehow.

In the U.S., Chinese buyers have helped support home sales and prices in Silicon Valley and Hawaii, while they are an increasing presence in Las Vegas and New York, according to local brokers. […]

Las Vegas?  What the heck are they thinking?  There’s no Apple Campus in Las Vegas!

This is an Open Thread.  Let us know what Open Houses you’ve seen full of foreign buyers.  Or any buyers.

<img missing due to burbed’s terrible admin skills. working on restoring>Hidden in emergency budget legislation, 7.3 million square feet of noted state office complexes were put up for sale, including several in San Francisco.That resulted in the oddity of all seven justices recusing themselves from deciding whether the sale could proceed. (Their offices in the Earl Warren building, part of the SF Civic Center, would be included, photo right.)  The deal was halted only 2 days before closing on December 15th, as Arnold’s reign came to an end.  And the more reporters dig to find out who benefits from this sweetheart deal, the more muck they find.

24 buildings on 11 sites, including landmarks such as the Ronald Reagan building in Los Angeles, plus others in San Francisco, Sacramento, Oakland, and Santa Rosa are being sold. The deal is with a mysterious group of investors who don’t wish to be identified, or claim they’ve dropped out when contacted.  The buildings cover 43 percent of all state government office space.

Identities of Investors in State Property Sale Grow Cloudier

Many have dropped out of contested deal, and those that remain are tight-lipped

By ELIZABETH LESLY STEVENS on January 12, 2011 – 3:12 p.m. PST
The Bay Citizen

Most of the members of a shadowy investor group that agreed to finance the sale of tony state office buildings last year appear to have dropped out of the deal, and those that remain are tight-lipped about their involvement in the transaction, which is being challenged in court as an illegal gift of state assets to a group with political pull in Sacramento.

Departing Gov. Arnold Schwarzenegger tried mightily in his waning days in power to close the controversial sale of 11 premier properties.

The deal, now being challenged in a state appellate court, is in limbo. The new administration of Gov. Jerry Brown asked the court for a month to review the matter, and now arguments are scheduled to begin in February. The nonpartisan Legislative Analyst’s Office reported in November that the deal would end up costing California taxpayers $6 billion in the coming decades, but the approximately $1.3 billion net proceeds of the deal are already factored in to the state’s budget for the coming year. If the deal falls apart, the cash-strapped state’s deficit will swell by another $1.3 billion.

The deal had been scheduled to close on Dec. 15. The legal challenge, brought by lawyer Joseph Cotchett and former San Francisco City Attorney Louise Renne, convinced the appellate court to issue a stay just 48 hours before the sale was to have closed.

<img missing due to burbed’s terrible admin skills. working on restoring>Color me surprised.  A bunch of former officeholders finding ways to sell themselves some primo office properties hiding behind lawyers and corporations?  Stalwart building authority members who objected to the deal got sidelined?  Who would have predicted that?

And what a lovely problem it’s left California with: sell our buildings to these crooks, and have to rent what we owned.  (Bonus!  And get evicted in favor higher-paying trophy retailer!)  Or, invalidate the deal and dig up another $1.3 billion for that out-of-whack state budget.  Plus everyone standing to benefit will then sue when they don’t get their cut.  Be sure to read the first link in the article for more background if you haven’t been following this local example of how crony capitalism works.  (Photo above left, State PUC building is part of the 24 building deal.  Adithya Sambamurthy/The Bay Citizen)

But that’s just one secretive sell-off of public assets.  Burbed reader nomadic sends in what could be the answer, but it only raises more concerns.  Matt Taibbi suggests that large chunks of our infrastructure, including “a whole bevy of Californian public infrastructure projects,”are being bought by “sovereign wealth funds.” SWFs are extremely large amounts of cash, in particular from oil-producing nations.  One of the SWFs was offered the entire Pennsylvania Turnpike.  (They demurred, but Taibbi names other public works projects that have been sold off, including the Chicago Skyway and their parking meter revenue.)

Around this time, state and municipal executives began putting their infrastructure assets up to lease — essentially for sale, since the proposed leases in some cases were seventy-five years or longer. And in virtually every case that I’ve been able to find, the local legislature was never informed who the true owners of these leases were. Probably the best example of this is the notorious Chicago parking meter deal, a deal that would have been a hideous betrayal even without the foreign ownership angle. It was a blitzkrieg rip-off that would provide the blueprint for increasingly broke-ass America to carry lots of these prized toasters to the proverbial pawnshop.

Sounds familiar.  Maybe that’s why this California First LLC group is being so secretive?

You know how to make a small fortune in real estate, right?  Start with a large fortune. 

This is a story of someone with a decent fortune who managed to lose it all, by buying can’t-lose inflation-proof real estate.  Let’s see how well that went.  Thanks to Burbed reader nomadic for sharing this modern morality play.

Family’s Fall From Affluence Is Swift and Hard

By GERALDINE FABRIKANT
Published: November 25, 2010

WAMEGO, Kan. — Grateful to have found work in this tough economy, Nick Martin teaches grape growing and winemaking each Saturday to a class of seven students in a simple metal building here at a satellite campus of Highland Community College.  (photo, right)

Then he drives 14 miles in an 11-year-old Ford Explorer to a sparsely furnished tract house that he rents for $900 a month on a dead-end street in McFarland, a smaller town. Just across the backyard is a shed that a neighbor uses to make cartridges for shooting the prairie dogs that infest the adjacent fields.  (photo, below)

It is a far cry from the life that Mr. Martin and his family enjoyed until recently at their Adirondacks waterfront camp at Tupper Lake, N.Y. Their garage held three stylish cars, including a yellow Aston Martin; they owned three horses, one that cost $173,000; and Mr. Martin treated his wife, Kate, to a birthday weekend at the Waldorf-Astoria, with dinner at the “21” Club and a $7,000 mink coat.

That luxurious world was fueled by a check Mr. Martin received in 1998 for $14 million, his share of the $600 million sale of Martin Media, an outdoor advertising business begun by his father in California in the 1950s. After taxes, he kept about $10 million.

Photos: Steve Hebert, New York Times

In some ways, this story is similar to many sympathetic treatments of less wealthy people losing their homes due to not understanding the basics of finance.  If you owe more than you own, you’re not moving in the right direction.  And if you sign papers you don’t understand, you’re setting yourself up for a world of hurt.

What’s amazing is how Nick Martin still seems to think what happened to him is somehow somebody else’s fault, maybe multiple somebody elses.  Unlike the numerous victims of manufactured documents and hard-sell subprime Pay Option ARMs, Martin seems to have sought out what became his undoing.

I do recommend you read the article, but here’s the shorter Nick Martin: He bought a bunch of crap he couldn’t afford, so now he’s broke.  That’s a fairly common story, it’s just most of them don’t start with getting a phone call asking where you want your $14 million deposited.

Please share your advice for Nick Martin, or for anyone about to enter the exciting world of buying and selling real estate.  How would he have fared if he’d bought in the Real Bay Area instead? 

Last week, I mentioned ten possible bubbles now that the non-RBA did a real estate fail.  (Real estate in the Real Bay Area, of course, has never lost value.)  This week, The New York Times validates some bubbles and they’re the ones closest to home.  And that is great news for homeowners!

A Silicon Bubble Shows Signs Of Reinflating

BY JENNA WORTHAM AND EVELYN M. RUSLI,
The New York Times, December 3rd, 2010

In a memorable scene in the movie “The Social Network,” Sean Parker, the investor played by Justin Timberlake, leans over the table and tells the founders of Facebook in a conspiratorial tone: “A million dollars isn’t cool. You know what’s cool? A billion dollars.”

These days in Silicon Valley, a billion dollars seems downright quaint. The enthusiasm for social networking and mobile apps has venture capitalists clamoring to give money to young companies.

The exuberance has given rise to an elite club of start-ups — all younger than seven years and all worth billions. Successive investments in Twitter have reportedly increased its value 33 percent, to $4 billion, while Zynga, creator of the popular Facebook game FarmVille, is worth more than $5 billion.

Photo: Andrew Harrer/Bloomberg News Evan Williams, left, who has started several Internet companies, including Twitter, and Fred Wilson, a venture capitalist who says investors are eager to participate in young start-ups.

Don’t let these new companies stop you from investing in them.  So they aren’t traded publicly? You can buy the stock before the IPO through SecondMarket.  Heck, so many people want to own shares, you can buy derivatives of these pre-market Facebook shares. Or you can own a Google share or two and gain from their buying up every small tech company for miles around, provided Apple or Facebook doesn’t buy them first.

For example, Google tried to buy Groupon for six billion dollars.  Six.  Billion.  Dollars.  For a company that throws up virtual coupons on the Internet.  A company based in Chicago.  And Groupon said NO.  I guess they think they’re worth more than… Six.  Billion.  Dollars.  For a little reality check, the biggest acquisition Google ever had was paying $3 billion for DoubleClick, in 2007.  Good thing they didn’t do anything foolish back then like buy an office building in Manhattan.

So, hot companies, limited shares available?  Sounds like something frothy and bubblicious is on the stove!  Some people are going to make a lot of money while this bubble gets bigger, and you know what that means?  It means there’s nowhere for Silicon Valley real estate to go but up, up, up!  Happy days are here again!

While you digest your Thanksgiving meal, here’s something to think about.  The rest of the nation is dealing with the burst bubble of the real estate market (not a problem for homeowners in the Real Bay Area, of course), and eagerly awaits the Next Great Investment.

So, are these the Next Bubbles Waiting to Burst?

1. Gold – $1408 an ounce for bullion.  Glenn Beck is hawking the stuff.  I rest my case.
2. Real Estate in China – When amateurs enter a market, it’s time for the pros to pull the rip cord.  And doesn’t this remind you of all the overbuilding in the Phoenix exurbs?  Oh, and don’t forget you don’t own the land.  The government does, and they can cancel your land lease anytime they want.
3. Alternative Energy – As soon as the government subsidies run out, then what?
4. Commodities – Wheat up 60% because they aren’t growing any more wheat!  You know what commodity you should worry about?  Indium.  It’s used in capacitive touch-screens, and without it, say goodbye to your iPhone 4.
5. Apple – Okay, obtaining the Apple Records catalog was cool.  But the iPhone 4 still has antenna problems, and eventually their pointless spat with Google is going to cost them.
6. Social Networking  — How do you estimate the value for companies such as Facebook, Twitter, or LinkedIn which aren’t traded publicly?  At some point, someone’s going to put a market pricetag on those firms, and it’s probably going to be too high.
7. Emerging Market Stocks  — These countries’ rising prices despite no growth are backed by… commodity price increases.
8. Small Tech Companies – These pre-IPO firms are being eaten by the big fish, and at big valuations.  Often they bid against each other with the small firm owners the winners.
9. The US Dollar – You know all those foreigners with cash at the sidelines?  Maybe they’re tired of that cash being in dollars and will trade them for their own currency.
10. US Government Debt  –  The US owes $13.7 trillion dollars.  Try and get your head around that number and figure out how they could possibly pay it all back.  Want another number?  The Gannet Company says with all the money the government has borrowed from other agencies (Social Security, Veterans Administration, etc) it owes… $73 trillion.  However, Wikipedia states the intergovernmental debt is $4.7 trillion, so take that extra-large number with a grain elevator of salt.

Will any of these bubbles be worse than the real estate follies?  What will happen to the RBA if either Apple, the social networking sector, or all the small tech companies collapse?  Is the RBA economy dependent on any of these other sectors?  Discuss.

Thanks to Burbed reader Gallileo for this find!

Excellent Investment Opportunity: Corner Lot Residence in Palo Alto’s Best Neighborhood!
Location: Old Palo Alto
This 3br/1.5ba single-family residence is an owner-occupied, ranch style one-level home (1328 sq. ft.) with a two-car attached garage. The house was built in 1950 and is on a corner lot (5625 sq. ft., Zoned R1) surrounded by multi-million dollar estates in the most prestigious neighborhood of Old Palo Alto located just ten minutes walking distance to University Ave. in downtown Palo Alto.
The owners have lived on the property since 1977 and prefer to continue residing in the home for the next ten years as opposed to accepting a traditional outright sale. Based on a 2007 appraisal, the property was valued at $1.2m. The property’s current fair market value now is estimated to be at least $1.0 million. *According to the City of Palo Alto Development Center, a new house may be constructed up to 2,438 sq. ft. (not including basement area which may also be built up to the same square footage area as the main level.)
The owners are open to all serious offers. However – as a reference point, they have considered the summarized scenarios below which will enable them to continue living in the property.
SCENARIO A
The owner-occupant will accept a $600,000 loan secured by a new first deed of trust at 6% compounded monthly. The owner will continue to live on the property with no loan payments and move out in 10 years with an end payoff to the lender of $1,091k in ten years. An alternative option is the owner would agree to pay a lender 60% of the purchase price in 10 years – allowing the buyer to be paid whichever payoff is higher depending on how inflation affects the property’s value at the end of ten years. *An investor in this scenario would need to consider their imputed interest because an investor making a loan with no payments (such as buying a zero-coupon bond) may still need to pay tax each year on the interest that accrues during the year. In this instance, a retirement account or non-profit entity may be a suitable investor.
SCENARIO B
The owner will accept $900,000 for the property as-is, through an outright sale now. The seller will continue to live in the property for the next ten years. Rather than paying rent to the new buyer (on which, an investor would be required to pay income tax), the seller will instead continue to pay 100% of the ongoing costs of property owner­ship such as insurance, property taxes, and maintenance during the ten years at which time, the buyer can take possession and/or sell.
SCENARIO C
Buyer to purchase a 67% undivided interest in the property for $600,000 cash. At the end of ten years, the current owner will sell their remaining 33% with a first right of refusal to the buyer for its fair market value.
*Buyers are required to consult with their own attorney and tax consultant, and are urged to conduct their own due diligence with the City of Palo Alto Planning Department regarding usage, building restrictions, and zoning laws. Any contracts and/or deed of trust will be recorded with both buyer/seller parties providing their own attorney representation and contract review at their own expense.

Property Location
740 Addison Ave.
Palo Alto, CA 94301
View Map
Features
Bedrooms: 3     Bathrooms: 1.5
Parking Spaces: 2       Year Built: 1950
Lot Size: 5625  Garage Size: 2
School District: Palo Alto      Square Footage: 1328

Here is another one for you. My guess is that someone has had a little too many cash-out refi’s and is looking for a way to stay in their home, but it’s really the bank’s at this point. Just look at the artistic color–easter egg blue is all the rage these days. Plus it is located on the corner of Fulton Street, which is Palo Alto’s “Christmas Tree Lane”–just on the part of it that isn’t part of the show. You get the Fulton street connection with none of the pesky tourists!

And such a realistic price–Just mention the 2007 price and you know you get 200K of instant equity just out of the gate. Now there is an investment worth pursuing.

It’s Saturday! That means it’s time for Burbed’s book of the week!

Amazon.com: Real Estate Investing in New York City: A Handbook for the Small Investor (9780595277421): Robert Lewis: Books
Real Estate Investing in New York City: A Handbook for the Small Investor (Paperback)
~ Robert Lewis (Author)
Key Phrases: amortization portion, leasehold mortgage, store tenant, Real Estate Investing, New York City, Brooklyn Heights

Learn Advantages of real estate investing over other investments, like leverage, inflation hedging and tax benefits

Understand the New York City area real estate market like an expert

Pick which real estate investment suits you –
Strategies from conservative to aggressive, lots of time or little time, plenty of funds or almost no funds

Discover what areas of the city offer the best prospects for success

Did this week’s features of New York real estate make you salivate at how cheap it is?

Well, with this book, you can have no money or some money. You can have passive, aggressive, or passive aggressive. no matter what your situation in life is, this book will help you invest and make money in New York real estate.

Sure you probably won’t be as successful if you bought in… say… Redwood City… and you may need to deal with the horrors of buying in a co-op (just ask Madonna how well that went) – but hey you never know.

Just remember though, before you leave the Bay Area, be sure to help this site out! Click this link to learn more!

It’s Saturday! That means it’s time for the book of the week! This week:

Amazon.com: A Million Bucks by 30: How to Overcome a Crap Job, Stingy Parents, and a Useless Degree to Become a Millionaire Before (or After) Turning Thirty (9780345499721): Alan Corey: Books
A Million Bucks by 30: How to Overcome a Crap Job, Stingy Parents, and a Useless Degree to Become a Millionaire Before (or After) Turning Thirty (Paperback)

From Publishers Weekly
Entertaining and informative, this book by first time author (and reality TV semi-regular) Corey sheds light on the plans and processes that led him to achieve his goal of amassing a million dollars by his third decade. In a winning narrative, Corey leads readers through his post-collegiate career as the cheapest of cheapskates, starting each chapter with a cute but revealing paragraph letting readers know all that he had yet to grasp in pursuit of money-making and -saving strategies. Though very few readers will be able to follow Corey’s same path to riches (he doesn’t expect them to), bulleted tips and sidebars (“Extreme Cheapskate Strategy: Buy one pair of multipurpose shoes a year. Don’t buy any others”) give readers solid advice as well as an appreciation for Corey’s discipline. Throughout, the tone is conversational, humorous and occasionally glib; the under-30 crowd (for whom the current American economy can be especially unkind) will find Corey’s advice welcome and his story encouraging.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

Review
“What a steal…For any entrepreneur the advice in these pages is worth more than a million bucks.”–Barbara Corcoran, founder, The Corcoran Group

Wow! Becoming a millionaire by 30! Wow!

But that’s strange… why is there a review from a Corcoran, a major real estate firm in NY?

Uh oh… let’s look at this review:

I was with the author until about $100,000 or so then he started to get lucky. I really do believe investing in real estate is great way to go but the fact his New York property doubled value in two years is not going to happen for everyone. However, if you don’t buy any property ever you will never make any profit, so the take away here is to get into the game.

Oh. Crap. Sorry. I really shouldn’t have recommended this book. Burbed would never condone investing in New York real estate – don’t help the enemy.

But still, his lessons could apply here. Just invest in some real estate, and boom you’ll be rich. Like this other review:

I enjoyed the book. I went a similar path in the 1990′s when I moved to San Francisco after college, landed three job offers on arrival in customer service, took two of them, worked my tail off and bought a condo in the pre-trendy SoMa District at only $130,000. 2 years later, sold my condo in a week’s time and profited big from an unforgettable bidding war. Took my profit to buy/flip/sell a home in Oregon, profited there too. Stayed in retail, stayed single, no dating, kept in touch with stockbroker and CPA. I reached over $600,000 net worth by age 30. The key was that I learned San Francisco and Portland, Ore would grow like crazy after religiously reading business news and talking to random people on lunch breaks.

Now that guy should right a book.

So to summarize: buy real estate, watch it soar, profit. BOOM. It’s just that simple. Aren’t you glad Burbed exists?

When you become a millionaire at any age, you can help this site out ! Click this link to learn more!

It’s Saturday – that means it’s time for Burbed’s book of the week!

Amazon.com: 2 Years to a Million in Real Estate (9780071471879): Matthew Martinez: Books

A few years ago, Matthew Martinez was a lot like you – he worked hard to make as big a salary as he could. But it wasn’t enough. He worked by the clock, and yearned to be his own boss. With a small amount of savings, he acquired his first rental property. Two years later, he was making more from his rentals than he was working 9 to 5, so he quit his day job to oversee his real estate investments. Today, he enjoys a multi-million-dollar collection of income-producing properties–and he’s ready to share his money-making strategies so you can begin your own journey to career and financial independence.

Two Years to a Million in Real Estateshows you everything you need to know, including how to

* Invest small amounts early-on while working a full-time job
* Avoid real estate “bubble” risks
* Get others to pay your mortgage for you
* Pick a hot property (and spot others that will become hot)
* Simplify the ins-and-outs of financing
* Negotiate like a pro
* Screen for reliable tenants
* Understand how local tenant laws work
* Hire good people to manage your properties
* Know when to sell

Wow. Just think, if you started reading this book today, you could have a million in Real Estate in just 2 short years. Now, granted, this could be a million debt, but debt=wealth if you do it right. And to do it right, you need this book.

What’s important is that you have the right attitude, full of confidence, and not be a doubter, a hater, like this guy:

But is it credible?, November 2, 2007
By     JJ – See all my reviews
The book follows the author on his path to success through real estate management/investment. When I reached the point in the book where the author made his first real estate investment purchase in the summer of 2002 I paused to consider the housing market he succeeded in. With a copyright of 2006, the author must have generated the bulk of his successes between 2002 and late 2005/early 2006 – heady times for the real estate market. His claim that the book will “… teach you how to duplicate my achievements…” is questionable given the present housing market. If he were starting out today would he have achieved so much so fast?

People like that are going to go nowhere in life. On the other hand, you, with this book, will simply soar!

On October 3, 2011, I expect you to be able to please help this site out, click this link to learn more!

It’s Saturday. That means it is time for Burbed’s book of the week!

Amazon.com: Buy Even Lower: The Regular People’s Guide to Real Estate Riches (Regular Riches) (9781419535741): Scott Frank, Andy Heller: Books

Review
“A book every real estate investor will love.” — – Ilyce R. Glink, nationally syndicated investor columnist

“On my scale of one to 10, this outstanding book rates a solid 10.” — – Robert J. Bruss, nationally syndicated real estate columnist

Product Description
Scott Frank and Andy Heller have been buying investment real estate for a combined 40 years. In Buy Even Lower, learn how they consistently buy these properties for the “right investor price.” Additionally, they show you that “buying even lower” is about more than simply saving money. It is also about saving time and energy, so you have more of it for your friends, family, and other interests and so you are positioned to live a full and wonderful life—what Scott and Andy refer to as Regular Riches®.

Let’s face it, there are investment opportunities all abound, especially in not so great cities. The problem is, often those people aren’t as smart as the ones in the Bay Area – they’re more emotionally driven, with no business sense.

I’m talking about New York. With you heaps of equity stashed away in your money bin, now is the time to unleash some of it, and scoop up some of those investment opportunities in NY. With this book, you can figure out how to buy those properties up cheaply, so that when Bay Area pioneers start treking out easy to spread the good news about greentech, you’ll be there to watch Manhattan transform from a rust belt city, to a greenbelt city. And watch as your property soars.

So go ahead, buy this book. Learn to buy even lower.

And when you become rich from your newfound negotiation skills, please help this site out, click this link to learn more!