5 ms·

Who are these people and where are they getting that kind of cash?

nostrademons 11y ago
(Not OP, but know several people that do this sort of investing...) It's a combination of 1.) Wealthy Asian businesspeople who are looking for a place to park some of the foreign reserves they own overseas. 2.) Hedge funds, investing institutional capital in relatively "safe" investments with guaranteed revenue streams. 3.) Corporate prop-trading desks, parking corporate profits in tax-advantaged long-term assets until its needed. Google, for example, is a major owner of affordable housing developments. This is what often happens after a speculative bubble bursts: all the folks who invested based on irrational exuberance get cleaned out of the market, and then assets are transferred to other investors who are generally much more prudent, often using spare cash that was sitting on the sidelines. In this case, the assets just happen to be where everybody lives.
- leesalminen 11y ago
  > 3.) Corporate prop-trading desks, parking corporate profits in tax-advantaged long-term assets until its needed. Google, for example, is a major owner of affordable housing developments. Very interesting as Google will be expanding their offices in Boulder over the next few years. I believe they've broke ground on the campus here.
- nicholasjarnold 11y ago
  Came back to confirm that I have personal 2nd-party knowledge of your #1 happening all over Colorado. A wealth management friend of mine said she has multiple very wealthy foreign clients that want to diversify in what is seen as a safe investment, and who obviously purchase these properties with cash. Also, the cohort does seem to be disproportionately of Asian decent.
rconti 11y ago
I have no inside knowledge, but I highly suspect many/most cash offers are not actually cash. It just means the financing is hidden from the seller. Nobody's waiting on approvals, the money is there and it's a done deal. That doesn't mean it's not on some kind of personal loan or some kind of asset-backed line of credit, just not one that's understood by the US real estate process.

(Not OP, but know several people that do this sort of investing...) It's a combination of 1.) Wealthy Asian businesspeople who are looking for a place to park some of the foreign reserves they own overseas. 2.) Hedge funds, investing institutional capital in relatively "safe" investments with guaranteed revenue streams. 3.) Corporate prop-trading desks, parking corporate profits in tax-advantaged long-term assets until its needed. Google, for example, is a major owner of affordable housing developments. This is what often happens after a speculative bubble bursts: all the folks who invested based on irrational exuberance get cleaned out of the market, and then assets are transferred to other investors who are generally much more prudent, often using spare cash that was sitting on the sidelines. In this case, the assets just happen to be where everybody lives.

leesalminen 11y ago
> 3.) Corporate prop-trading desks, parking corporate profits in tax-advantaged long-term assets until its needed. Google, for example, is a major owner of affordable housing developments. Very interesting as Google will be expanding their offices in Boulder over the next few years. I believe they've broke ground on the campus here.
nicholasjarnold 11y ago
Came back to confirm that I have personal 2nd-party knowledge of your #1 happening all over Colorado. A wealth management friend of mine said she has multiple very wealthy foreign clients that want to diversify in what is seen as a safe investment, and who obviously purchase these properties with cash. Also, the cohort does seem to be disproportionately of Asian decent.

rconti 11y ago

I have no inside knowledge, but I highly suspect many/most cash offers are not actually cash. It just means the financing is hidden from the seller. Nobody's waiting on approvals, the money is there and it's a done deal. That doesn't mean it's not on some kind of personal loan or some kind of asset-backed line of credit, just not one that's understood by the US real estate process.