Overseas investors meaning foreign
investors are snatching up
America's limited supply of single
family homes in the suburbs.
Now, they had already been doing
this in big cities.
Now they've really expanded their
reach to some of the suburban areas
outside of cities and what it's
essentially doing is screwing you.
If you've been in the market to buy
a house and you've been wondering
how's it that,
there are bidding wars where
the final price ends up being
hundreds of thousands of dollars
more than what the asking price is.
This is what's driving it.
Don't let anyone tell you that it's
because of a lack of inventory or
because there's zoning problems.
These strict zoning laws, we
need to repeal the zoning laws so
we can build more houses.
That's not what's happening.
Houses are being built and
they're being sold not to just
US investors, big investors.
I'm not talking about individuals.
They're also being snatched up by
foreign investors as well who
are looking for a place to shelter
their money, guys, stock market
looks like a bit of a bubble.
Where are we going to keep our
money, how are we going to have
some passive income, and
there way of doing it is buying up
these homes.
And renting them out.
So I want to give you some of
the details that were shared in
a wall street journal piece.
They write that in suburban
neighborhoods near cities such as
Atlanta, Las Vegas and Phoenix,
blocks of families are sending
monthly rent checks to ventures
backed by Canadian pension funds
European insurers and Asian or
middle-eastern government-run.
Funds.
But why?
Why is that allowed?
Let me give you more,
foreign investors account for
nearly a third of institutional
investment in single-family rental
homes, a third, guys.
And I do want to call out some
specific, investors from different
countries including German insurer
Allianz SE last month said that
it is investing to buy more than $4
billion of US rental homes.
Singapore's sovereign wealth
fund GIC is backing plans by Quinn
residences to buy single family
rental homes across the southeast
U.S Eastern United States.
And let me be clear
about something.
I mean, they're being referred to
as rental homes.
That just means that they're buying
homes that they intend
to rent, okay?
It's not like they're buying
apartment buildings where
the people in there
are already renting.
We're talking about them buying
existing homes on the market.
With the intention of not selling
them, renting them out, which
of course limits the inventory.
And then Canada's public
sector pension investment board,
meanwhile, said in January it
agreed to a $700 million
rental-home venture in partnership
with pretium partners, LLC,
the venture has bought
around 2000 homes.
And again,
I just want to make sure that you
guys understand this because I need
you to be the debunkers every time
you hear this talking point,
I need you to be the debunkers,
there isn't an issue with
the lack of development, okay?
There is an issue
of homes literally being built with
the intention of selling them to
these investors either domestically
or to foreign investors.
As the Wall Street journal notes,
unlike a decade ago when investors
bought foreclosed homes or
those already occupied, the focus
is now on newly built properties.
So if you're one of these bankers
who's going around saying like,
zoning, zoning we got to get rid of
zoning, zoning is the problem, we
got to get rid of zoning, result.
It's not zoning.
This is what's happening.
Okay, we have the sharks and these
vultures coming in looking for
places to store their cash and
artists.
They're artificially inflating
the market and they're creating
a situation in which working people
get completely priced out even in
areas that were considered low cost
relative to some of the big cities.
I obviously feel very passionately
about this issue please jump in.
>> Yeah. So do I, it's kind of
crazy, as a New Yorker, I'm very
acutely aware of this problem and
phenomenon because.
Back in the days when you felt
like you really made it in life,
you had, you were able to get
an apartment in Manhattan, mind
you, not Harlem, not Washington
heights all the way up town.
Really not even lower east side.
[LAUGH] Right, that was considered
to be the slumming it, right?
But slowly but
surely, they started building these
monstrosities on the west side.
And, they started being bought up
by Chinese investors, Saudi
investors because a lot of times,
if you are one of the oligarchs in
China, you know one of the safest
places to put your money is
America, coz you know America takes
money very seriously.
And 2, real estate in America is
one of the safest, basic, basically
holding havens, so they would buy
up all these apartments, all of
this stuff that nobody lives in.
While nobody's living in there.
Those prices are being, they're
jacking up the price of rent on
other Manhattanite, who then even
some of the most successful people
in New York City were like, yo,
I can't even afford Manhattan rent.
I got to slum it in Brooklyn.
And guess who has to move when
those people move to Brooklyn?
because they can't even afford,
to live in Manhattan, right?
Like, who do you think is moving
out of places like Bushwick in
Bed Stuy and other neighborhoods in
Brooklyn that, which additionally,
just working class,
neighborhoods and now have
been overrun by yuppies like this
has a trickle down effect.
On the bottom rung of people like
it's very easy to see.
And again,
these apartments sit vacant,
just so these cats from Saudi and
China can park money in America and
at the same time,
ruin the lives of normal working
people in the realtors, of course
they want this, this is jacking up
the value of all of their stuff it
works perfect for them.
So, the foreign
investment gets what they want.
They get a nice safe place to park
their money,
just in case MBS holds another
freaking meeting at a hotel.
With all the Saudi royalty and
wants to freaking slice people's
throats open and say,
I'm going to threaten to take all
your money that's in the bank.
They know they have a nice safe
place of money that won't be
touched in America,
same thing with China, just so
those cats can have the right to do
that and feel that safety.
We disrupt the lives in the sort of
the pricing out of people at
the bottom man, this stuff matters.
It matters especially something as
essential as housing.
There's nothing more important
than housing.
>> That's exactly right.
Yeah, I mean health care,
housing education.
I mean, these are things that have
been completely defunded.
They've been corrupted by
moneyed interests.
And, it is interesting to see like
in, I can't speak for
other parts of the country
specifically because I, I haven't
studied it as much as I've studied
what's happening in Los Angeles.
But in Los Angeles we have around,
I'm sure the number has increased
since the last time I checked, but
ballpark 60 to 65,000 homeless
people in LA alone,
just Los Angeles County.
There's around that many homeless
people, at the same time.
There are more than 100,000 vacant
units.
Now, that's not to say that all of
those units are perfectly fine to
move into some landlords,
they might be taking some time to
remodel them or make them available
for rent or available,
for someone to live in them.
But my point here is we have vacant
units as you had mentioned.
And what is the response to
homelessness from the Los Angeles
City council so far?
Okay, you have council member
Bonnen or Bonin,
I don't know how you say his name,
who's like yeah, we do have
a problem with homelessness.
Maybe we just like let them pitch
as many tents as they want on
the beach.
Okay, but what's the environmental
impact of that?
And is that really the humane
answer to this?
There are obviously vacant units.
Why don't we have
a discussion about that?
There are other city council
members like, we got an idea.
Let's just buy vacant lots and
just put as many as we can
in vacant lots and
just let them do what they do.
That's your solution to
homelessness in Los Angeles.
I mean, it's garbage.
It's garbage.
Why is it that we have so
many vacant units,
the LA City council was previously
considering taxing landlords who
don't rent out those units.
And they decided to drop that.
I wonder why, I wonder why.
And so this is an issue that's
affecting everyone
throughout the country.
And I don't even really see members
of Congress focusing on it at all.
It's not even on their radar.
And it's infuriating because people
keep trying to jam this myth of
merit down our throats like
if you just work hard enough,
you get the right education.
Doesn't matter what you do guys,
does it matter how hard you work,
does it matter how much you say,
it doesn't matter.
They come in and they buy in cash.
You have no chance.
Yeah >> 20% down payment doesn't
matter.
They're buying you out in cash.
Out video in cash >> And we're
talking about people with great
jobs like the idea that you could
ever buy property in a city like
San Francisco or even neighboring
Oakland is beginning to be just
completely unrealistic because of
the housing situation over there.
But even,
obviously Oakland is San Francisco
is a unique sort of issue, but I
just would remind people that back
when America was great [LAUGH] or
when these people would like us to
think so, you graduated
high school, you got a factory job,
you could broadly buy a house
within two years of that.
That's what the case used to be in
this country.
And now I'm talking about
households making $200,000 in order
to buy property in some of these
cities, because of the artificial
jacking up of some of the prices by
foreign investment again, if people
have no intention of living there,
no intention of doing anything with
this stuff, but to just.
Find some way to store some cash
where they know the value is going
to grow at least a little
bit on their money and they'll get
some type of return on it.
It's disgusting.
It's awful.