Since the housing market has plummeted due to the recession, lots of investors from Asia are taking advantage of the low prices by buying up foreclosures and short sales at below the price of building the same house. A Hong Kong Investment Firm led by Kevin Chu owns property in Las Vegas, even though Chu has never actually seen it. Chu’s very first visit to the United States, in fact, will be to inspect his newly purchased Las Vegas property.
Over the past year and a half Chu’s firm, known as The Creations Group, has bought up distressed homes all over the United States, including 13 homes in Las Vegas at fire sale prices. Local Property Manager for the area Tracy Bennett is personally driving Chu to see one of his firm’s homes which recently underwent renovations.
The foreclosure rate in Las Vegas is more then three times the national average and thousands of bank-owned properties sit empty. Chu’s house is a modest one-story home the firm purchased for $55,000. In peak market conditions, this very same house could have easily gone for more than $200,000. The inside is clean, freshly painted and ready for tenants.
According to Danny Lim, Chu’s boss at the firm, “In some places the types of prices that we are getting, I think it’s, you know, once in a generation, perhaps once in a lifetime opportunity.” Lim is currently looking in Miami for additional properties to buy, renovate and rent out to hopeful tenants.
Chu is avidly advertising in the Asian newspapers and points out that the strong rental market in Las Vegas means that houses there can quickly become income-producing properties. “We let them know, hey, look, U.S. is a good place to invest,” Chu says. Chu’s Chinese clients now make up one-fourth of his entire business, and he wants more.
The 2012 strategy for the Las Vegas chapter of the Asian Real Estate Association of America is to help local realtors gain even more international business through new web tools and networking opportunities. According to Joseph Lai, the association’s chapter president, “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.”
There is currently no reliable data to tell just how many properties in Las Vegas are going to international buyers though local Realtors say that the majority of their international business is coming from Asia and Canada.
Source: npr – Las Vegas Housing Market Attracts Asian Investors