Investors from Asia are taking advantage of housing prices that have plummeted in recent years, buying foreclosures and short sales at below what it would cost to build them.
Kevin Chu’s Hong-Kong investment firm owns property in Las Vegas, but he’s never seen any of it. So his first visit to the U.S. is to inspect the houses in Las Vegas.
In the past 18 months, the firm he works for, The Creations Group, bought up distressed homes all over the U.S. — including 13 Las Vegas houses at fire sale prices.
Tracy Bennett, the local property manager, is driving Chu to see one of his firm’s houses that has just been renovated.
It’s a modest one-story house. The firm bought it for $55,000. At the height of the market, it could have sold for more than $200,000. Inside it’s clean, with fresh paint. It’s ready for a tenant.
In fact, the U.S. housing market as a whole looks much better than expected to Chu’s boss, Danny Lim.
Andy Chu, a local real estate agent, says he is advertising in the Asian newspapers. He points out the strong rental market in Las Vegas means houses here can quickly become income-producing properties.
“We let them know, hey look, U.S. is a good place to invest,” he says.
Andy Chu’s clients from Asia are now a quarter of his business, and he wants more.
They’re good customers. They often will buy several properties and pay in cash, which means he doesn’t have to spend months waiting for financing to be approved.
The 2012 strategy for the Las Vegas chapter of the Asian Real Estate Association of America is to help local Realtors get even more international business through new Web tools and networking opportunities.
“If you are a homegrown product how do you network with someone in Canada? How do you work with someone in China, Vietnam or Taiwan? It is very hard. That’s the reason why our association is trying to bridge that gap,” explains Joseph Lai, the association’s chapter president.
There aren’t reliable data to know just how many properties in Las Vegas are selling to out-of-country buyers. Local Realtors say the bulk of their international business is coming from Asia and Canada. Lai says these buyers are helping the local housing market recover.