Foreign Investment in KC Realestate

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ldai_phs
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Foreign Investment in KC Realestate

Postby ldai_phs » Wed Aug 17, 2016 10:53 pm

Instability in places like China have led to many foreigners putting their money in U.S. Property. Foreigners have invested heavily in big US cities like NYC, Miami, LA, etc driving up prices and fueling a construction boom. This has led to stricter rules and more oversight in the US's biggest cities.

Why aren't KC developers targeting this foreign money?

Many foreigners priced out of big city markets would be able to buy good property in KC. Wealthier foreigners would be able to buy something much nicer or bigger in KC than in NYC or such. Looser rules here would also make it easier for foreigners to hide their identities as they like to do.

KC developers targeting this foreign investment could lead to chain investment/migration.

aknowledgeableperson
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Re: Foreign Investment in KC Realestate

Postby aknowledgeableperson » Thu Aug 18, 2016 1:57 am

"Wealthier foreigners would be able to buy something much nicer or bigger in KC than in NYC or such."

Trouble is Kansas City isn't New York City.

bobbyhawks
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Re: Foreign Investment in KC Realestate

Postby bobbyhawks » Thu Aug 18, 2016 10:23 am

I don't think it can be overstated that our airport is an incredibly horrible first impression for attracting foreign investment. Denver, Minneapolis, and others have a huge leg up as far as modern airport with future upgradeability and adaptability to international travel.

flyingember
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Re: Foreign Investment in KC Realestate

Postby flyingember » Thu Aug 18, 2016 11:15 am

bobbyhawks wrote:I don't think it can be overstated that our airport is an incredibly horrible first impression for attracting foreign investment. Denver, Minneapolis, and others have a huge leg up as far as modern airport with future upgradeability and adaptability to international travel.


I seriously doubt this.

If the airport keeps prices down there will be people looking for cheap investments they can flip over to a later investor. The US doesn't have a monopoly on this type of investor.

bobbyhawks
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Re: Foreign Investment in KC Realestate

Postby bobbyhawks » Thu Aug 18, 2016 11:42 am

flyingember wrote:
bobbyhawks wrote:I don't think it can be overstated that our airport is an incredibly horrible first impression for attracting foreign investment. Denver, Minneapolis, and others have a huge leg up as far as modern airport with future upgradeability and adaptability to international travel.


I seriously doubt this.

If the airport keeps prices down there will be people looking for cheap investments they can flip over to a later investor. The US doesn't have a monopoly on this type of investor.

Isn't metro area growth in overall capability a key element required for the investment to pay off (or for selling the initial flip)? Cheap flights today, and even in the future, mean absolutely nothing if there is no capacity for growth in total number of flights and technology. Cheap markets can be oversaturated just like NYC can be oversaturated, so anything seen as a limiting factor could be a detriment, and the logistics of our location are absolutely one of the limiting factors for many investments. Thus, in my opinion, why having an updated airport that is adaptable to future growth is very important.

flyingember
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Re: Foreign Investment in KC Realestate

Postby flyingember » Thu Aug 18, 2016 11:51 am

You're missing the point, the airport is irrelevant for a lot of investment in real estate.

They just need a local broker, local lawyer, a bank account and the Internet. Done.

With the amount of information and ability to do video tours remotely an investment group can buy property in cities they've never stepped foot in. The local broker is their expert that sells them on investments. Like any real estate broker they can be fired if they're not very good.

If you're buying a $10 million dollar piece of property you certainly fly in. If you're buying 100x $100,000 pieces of property across a dozen cities you're not going to visit all of them. You're better off saving the money and buying another piece of property to diversify more.

And if someone thinks there's a $10 million deal that will make them money in Kansas City, the airport isn't going to stop it unless they're idiots.

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Re: Foreign Investment in KC Realestate

Postby brewcrew1000 » Thu Aug 18, 2016 12:03 pm

Vancouver now implementing a 15% tax on Foreigners purchasing Real Estate, i think we could see more foreigners looking to middle america as the coasts start becoming to expensive. I think one thing that KC is lacking is a global university that brings in a lot of out of country students.

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Re: Foreign Investment in KC Realestate

Postby flyingember » Thu Aug 18, 2016 12:07 pm

brewcrew1000 wrote:Vancouver now implementing a 15% tax on Foreigners purchasing Real Estate, i think we could see more foreigners looking to middle america as the coasts start becoming to expensive. I think one thing that KC is lacking is a global university that brings in a lot of out of country students.


Same as the airport the lack of a major university is just going to draw different investors, not keep everyone out.

No matter how down market you go there's always someone making money.

I would be surprised to not find someone from China investing only in distressed real estate that costs under $1000 today in every city over 100,000 people. That any piece of property they can buy at that price they go for.
Funding for "we buy ugly houses" comes from somewhere, you can find this kind of buyer everywhere, and it's not just going to be domestic money.

More money may move into the Midwest but there's going to be 10000 lower end investors already here for every investor priced out of NYC or San Francisco. Like all markets the long tail says most people have a smaller bucket to work with and never were investing in the coasts to begin with.

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Re: Foreign Investment in KC Realestate

Postby bobbyhawks » Thu Aug 18, 2016 12:19 pm

flyingember wrote:You're missing the point, the airport is irrelevant for a lot of investment in real estate.

My conversation is solely focused on large investments that respond to the original question "Why aren't KC developers targeting this foreign money?" To me, this topic excludes speculation on dispersed sections of cheap land that is not going to be turned into an actual development.

flyingember wrote:And if someone thinks there's a $10 million deal that will make them money in Kansas City, the airport isn't going to stop it unless they're idiots.

This presupposes that they know they will make money in Kansas City. Obviously, all of those situations will have already considered if the airport is going to be a factor, and realistically there is no deal where anyone "knows" they will make money (but varying degrees of certainty about the future). My point is that a factor in any $10 million deal would be whether or not the airport will prevent or be a detriment to a gain on the investment.

aknowledgeableperson
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Re: Foreign Investment in KC Realestate

Postby aknowledgeableperson » Thu Aug 18, 2016 4:47 pm

How high is up?
For foreign investors they have a large amount of money to invest, in other words they won't be investing in just a condo or two. In the bigger markets they have a greater upside potential, although with a bigger investment, than in KC. KC is small potatoes.
If they are investing in a single residence then that residence needs to be somewhere they want to be. And that residence has to have similar properties around it.

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Re: Foreign Investment in KC Realestate

Postby phuqueue » Thu Aug 18, 2016 6:04 pm

akp nails it. The penthouse at One57 in NYC sold for over a hundred million dollars. KC -- and 99% of cities in the world -- is too small time to attract these investors. flyingember points out that "We buy ugly houses" people are getting their funding from somewhere, and yeah, some of it is probably foreign, but this is not the same thing as the wealthy individuals who create shell companies to purchase tens-of-millions dollar homes in places like NYC or California, which is what I read the first post to be talking about (I don't see any reason to assume there aren't already foreign investors participating in "We buy ugly houses"-type enterprises). Values and potential appreciation in KC are far, far too low to attract these kinds of investors. And KC is better for it. Cities like SF and NYC are facing housing crises largely because developers only want to cater to the luxury market. KC is a long way away from a housing crisis, and this is not a bad thing. Let KC's housing prices rise and fall the old fashioned way, because people actually want to live there, and not because Chinese and Russian billionaires are snapping everything up sight unseen and then leaving it vacant. If you try living for a while in a city that attracts that kind of investment you'll quickly come to see it for the scourge that it is.


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