The Floundering Town-Builder of the Future Shows China’s Real-Estate Risks

The latest Chinese real-estate company to run into serious trouble is a lesson in the risks attached to Chinese property: They are neither predictable, nor limited to the sector alone.

This week, China Fortune Land Development said it had overdue debt repayments worth 5.26 billion yuan, equivalent to $814 million. It blamed the macroeconomic and credit environment.

The company specializes in developing industrial parks and entire new districts. As recently as 2018, its flagship development Gu’an New Industry City, south of Beijing, was heralded as “a model for the kinds of ‘new type’ urbanization that the Chinese government hopes to see develop across the country,” according to a report from the University of Pennsylvania’s Wharton School and E-House China, a property data and information services website.

Analysts tend to present every troubled real-estate company in China as an idiosyncratic case, but a rapid slide in China Fortune Land’s credit ratings naturally raises questions about which other property developers are currently enjoying an unrealistically low cost of capital. Since January,

Moody’s Investors Service

and Fitch Ratings have downgraded the company four and seven notches, respectively, putting it deep into junk territory. That’s a demonstration of just how quickly things can change.

Read More

One real-estate investor built a portfolio worth millions in 5 years

  • Aaron Amuchastegui, a real-estate investor who navigated the 2008 crisis but took a serious financial hit in 2013, revived his portfolio in just five years’ time. 
  • He utilizes an investment strategy that targets “courthouse step” deals, or buying foreclosed homes at auction. 
  • Amuchastegui’s strategy has shifted over the years, and he now prioritizes a long-term investment plan focused on single-family Texas home rentals rather than quick flips. 
  • Visit Business Insider’s homepage for more stories.

In 2008, Aaron Amuchastegui was lucky to hang onto his job amid the financial crisis, and then by 2013 he was broke.

It was quite a change for the son of a homebuilder in a small town in Oregon. The 40-year-old investor told Insider that since 2005, he had enjoyed a lucrative career flipping new, custom home developments, but the 2008 financial crisis levied a direct hit against that model.

The builder Amuchastegui worked for laid off about 70 people after 2008, he said in an interview on the BiggerPockets podcast, and he was relocated to Sacramento, California, one of just five remaining members of his team.

Amuchastegui, now 40, had been with the builder, based in Santa Barbara, since he graduated from nearby California Polytechnic

Read More

Real-Estate Agents Recall Clients Who Were There to Spy, Not Buy

Real-estate agent, The Corcoran Group, Bridgehampton, N.Y.

I worked for 27 years as a hair colorist in Manhattan at some of the top Madison Avenue salons before going into real estate. Those are the people that either have homes in the Hamptons or want homes in the Hamptons, so it was a very good customer base to tap into. A lot of my hair-color clients transitioned into real-estate clients over the years, and this client was one of them.

She contacted me and said, “There’s a house in East Hampton that I would like to take a look at.” It was beautifully maintained, with an asking price just under $3 million. But one thing that was odd was that she and her boyfriend had specifically told me that they didn’t want a house with a pool, and this house had a pool.


She had roped me into getting her into that house to check things out.


— Real-estate agent Michael Lynch

Another thing that was unusual was that she brought a friend with her to see it. Most of the time when I showed her a house, it was with her boyfriend. They had been a couple for

Read More

Big Real-Estate Firms Turn Buyers of Their Own Shares

Some publicly traded real-estate companies have found a buyer for their shares, despite empty offices, deserted hotels and reeling shopping malls—the companies themselves.

Real-estate owners, including

SL Green Realty Corp.

and

Healthcare Trust of America Inc.,

say stock-market investors have significantly undervalued their property holdings compared with what they could fetch in the private market. While some of these companies authorized buying back their own shares even before the coronavirus pandemic, they are betting that with a vaccine rollout under way, travel, office work and mall shopping will bounce back after a terrible year for major property types.

Brookfield Asset Management Inc.

took this strategy one step further last week, when it offered to buy the nearly 40{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} stake in

Brookfield Property Partners

LP it doesn’t already own for $5.9 billion. Brookfield Property, which BAM spun off about eight years ago, is one of the world’s largest real-estate investors and owns the giant office and retail complexes Brookfield Place in New York and London’s Canary Wharf.

The stock market “doesn’t properly value or appreciate the quality of the assets that we own,”

Brian Kingston,

managing partner of BAM’s real-estate group, said last week.

Shares of public mall and office companies

Read More

What type of real-estate investment is right for you?

RETIREMENT WEEKLY



a house in the middle of a road


Investing in real estate could be a smart financial decision with proper planning and budgeting. Real estate tends to appreciate in value over time, can act as a hedge against stock market volatility, offers great tax advantages and can provide a stable monthly income.

Loading...

Load Error

All things considered, buying property represents one of the most effective ways to build wealth but also one of the slowest. Though, once your investments start to compound, your portfolio will begin to have several income generating assets. You can reinvest the profits you make from selling previous investments and see your wealth truly begin to snowball.

To learn more about the different types of real-estate investments available to you as well as how to determine the right one for you, continue reading this comprehensive guide.

1. Short-term rentals

Pros

Short-term rental properties, otherwise known as vacation rentals, can act as one of the best ways to generate significant income from your real estate holdings. Owners can charge higher rates a day than long-term investment properties and they can also potentially use the home themselves when renters do not occupy the property.

Moreover, home-sharing apps such as Airbnb and Vrbo have

Read More

Real-Estate Startup Knotel Files for Chapter 11 Bankruptcy

Real-estate startup Knotel Inc. filed for chapter 11 bankruptcy for its U.S. business on Saturday, agreeing for the company to be taken over by real-estate services firm Newmark Group Inc.

Knotel said Sunday that it filed for bankruptcy to reorganize its real-estate footprint and enable the sale to go through.

The moves are the latest sign that the Covid-19 pandemic has upended the once-booming co-working industry.

New York-based Knotel, founded in 2016, raised hundreds of millions of dollars from investors. It expanded rapidly for years and was one of the more aggressive competitors in the co-working and flexible office space sector, becoming one of WeWork’s fiercest rivals.

In August 2019, Knotel said it had reached a valuation of more than $1 billion thanks to a funding round led by Wafra Inc., an affiliate of a Kuwaiti sovereign-wealth fund. But its revenue dropped significantly during the pandemic, and Knotel has faced lawsuits over unpaid rent from landlords.

“The pandemic created a uniquely challenging operating environment, with significant impacts on leasing velocity and the rate of renewals in key markets, particularly New York and San Francisco,” co-founder

Amol Sarva

said in a statement. “We must address this now to position our business

Read More

Opendoor Spikes as Market Warms to iBuyer Real-Estate Companies

Text size

Wedbush says tech-based real-estate companies can simplify home sales, which are ordinarily a complex transaction,


Dreamstime

The arrival of the tech-driven real-estate company Opendoor Technologies in the open market is casting new light on the property tech sector, particularly the “iBuyer” market in which companies buy homes from consumers and aim to sell them at a profit.

Wedbush analyst Ygal Arounian picked up coverage of

Opendoor

(ticker: OPEN) with an Outperform rating and $31 price target on Wednesday. He lifted his rating on

Zillow Group

(Z) to Outperform from Neutral, with a new target of $167, up from $118. And he reiterated his Outperform rating on Redfin (RDFN), while boosting his target for the stock price to $86, from $59.

In late morning trading, Opendoor shares had spiked 8.1{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} to $27.66, while Zillow was down 0.2{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} to $135.44. Redfin declined 1.7{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c}, to $67.81. The

S&P 500

was 1.1{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} higher.

Opendoor came public late last year via a merger with a special-purpose acquisition company called

Social Capital Hedosophia Holdings Corp. II,

which had been sponsored by Silicon Valley investor Chamath Palihapitiya.

“As the original iBuyer, Opendoor has turned into a leading tech disrupter within residential real estate,” Arounian

Read More

How to find the right kind of real-estate investment

OUTSIDE THE BOX



a large brick building with grass in front of a house


© D. PETKU/H. Roberts Armstrong/Classicstock/Everett Collection


Investing in real estate could be a smart financial decision with proper planning and budgeting. Real estate tends to appreciate in value over time, can act as a hedge against stock market volatility, offers great tax advantages and can provide a stable monthly income.

Loading...

Load Error

All things considered, buying property represents one of the most effective ways to build wealth but also one of the slowest. Though, once your investments start to compound, your portfolio will begin to have several income generating assets. You can reinvest the profits you make from selling previous investments and see your wealth truly begin to snowball.

FIRE helped this flight attendant take a break from work amid COVID-19 Bianca DiValerio, a flight attendant in the FIRE movement, took a leave from her job during the pandemic, moved some money around, and spent time at her tiny home in Wisconsin, a converted train car.

To learn more about the different types of real-estate investments available to you as well as how to determine the right one for you, continue reading this comprehensive guide.

1. Short-term rentals

Pros

Short-term rental properties, otherwise known as vacation

Read More

Shopping for a home and scared of COVID-19? Here’s how real-estate agents are keeping clients safe





© Getty Images


THE BIG MOVE

Loading...

Load Error

‘The Big Move’ is a MarketWatch column looking at real estate and work-life balance.

Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Jacob Passy at jpassy@marketwatch.com.

Dear MarketWatch, 

I have been looking to buy a home these last few months, but am getting more and more worried about how to do so safely in the middle of a pandemic. Whenever I see a new place, I have to sign forms about COVID-19, such as if I have traveled anywhere, tested positive recently or know anyone who has. 

But my question — are there any responsibilities or rules Realtors must follow? What happens if a real-estate agent I meet tests positive for the virus… will he or she have to tell me? Do they have any timeframe until they must return to the workplace and start showing homes again? I’m sure there are policies around sanitizing and protective gear, and I have seen Realtors wearing masks and wiping down countertops, but I’d appreciate any guidance you have on how to best proceed in these unprecedented times.  

Sincerely, 

A

Read More

4 unexpected markets real-estate investors should target

  • As single-family home prices hover around record highs, real-estate investment opportunities can be tricky to identify.
  • Some locations are better suited for investment than others, according to longtime real-estate investor Cody Sperber. 
  • He said he finds four outside-the-box places in the US particularly attractive in 2021, including Topeka, Kansas, and Lakeland, Florida. 
  • Visit Business Insider’s homepage for more stories.

Smart real-estate investors are almost always on the lookout for new opportunities.

And as some areas of the US face projected home-price decreases over the next year while others are primed to grow in demand, some areas are ripe for investment now, according to lifelong real-estate investor Cody Sperber.

Sperber is the self-described “clever investor” and founder of “for-purpose” development company Green Elephant Development. He started investing in real estate with no money to his name, and has climbed his way to hundreds of million in deals using strategies from house flipping to rehabbing and more.

Sperber told Insider that 2021 is the year of the “urban purge,” as people continue to migrate out of big cities for affordability in what were once flyover states. As a result, he’s focused on markets in flyover states from Idaho to 

Read More