Chinese Twentysomethings Are Moving Into The U.S. Real Estate Market

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by Yasser Zhang

On a sunny afternoon, Tina Xiao is riding with her agent Al Laghab in his Lexus. She has a stack of portfolios on her knees and is looking over the details for a three-bedroom house in Azusa.

"Cause I already have townhouse, I want to look for something different, duplex or three unit, and then get a loan," she said. "There's a lot of factors to it; it's not just buying the house at a very low cost. In any market, if you know how to look, you can always make money."

Tina is part of the army of Chinese investors pouring money into the U.S. housing market. They rush to the U.S. because they can buy what they cannot in China. Under current policy, each family can buy no more than two properties.

"To them, it's something real, something they can hold onto. Because in China, you don’t own the land. But here, the sense that you're owning something makes them feel like look, I am, in Chinese we say, dizhu, landowner. It makes them feel like they're rich, and they have control," Tina said.

Tina works at the foreclosure department of a local bank in L.A. She's lived in the States since 1999. Her job guarantees a stable paycheck, but Tina said it is not what she wants for her life. When she stumbled upon the real estate market a year ago, she saw her opportunity.

"I think that's just the moment when everything just clicks. I think that was a moment when everything just went like that," she said, snapping her fingers. "I think I just got determined to say 'I need to take action'. Especially I am taking the advantage of that housing market price is dropping," Tina said.

In the past year, Tina taught herself about real estate by reading books and meeting with experts. Finally, she convinced her parents to give her about $400,000 as a starting fund.

"And then I just keep telling them 'Mom, it’s time to buy a house.' And then eventually it penetrated their brain cells. And then it just kind clicked. They say 'Let's do it!'" she said.

Now Tina stands in front of a two-bedroom townhouse near Pasadena City College. She bought it with cash in late January. The house meets Tina's criteria for location and financing, and it’s about $25,000 below the market price.

"So my motivation behind it is that I don't want to work, get money and spend. But I want to be able to use my money, to grow money. So I don't have to think about it. So that in a long term I will be a wealthy person," Tina said.

And for that, Tina has a plan: Lease this house in Pasadena, buy a duplex nearby, refurbish and flip it for profit, and then look for another one to flip.

"I'm always telling my friend or co-worker. It's kinda like a joke. You know the family who owns the Irvine, so all the residents have to pay to the family? So I say 'oh, you know, maybe eventually I will own Azusa, Pasadena and San Gabriel Valley, and then you all have to pay rent to me'," she said.

While Americans are losing their homes, people from Tina's birth country are buying more houses than ever before. Chinese investors contribute 9 percent to the $41 billion in international sales for U.S. homes, becoming the second-largest group of international homebuyers in the US. Tina thinks the strong buying is actually helping American people out, by getting them out of bad mortgages for a reasonable price.

For her side, Tina knows risk is inevitable. She is undeterred.

She said, "You know a lot of people are stopped by fear. They can make money, and they can do that. And then later on they regret and say 'oh, look, if I invest, then I would've make so much. But because of that, because I was scared, blah, blah…so I did't do it.'I think everyone has that fear. I'm just kinda able to step over my fear."

After looking around the three-bedroom house in Azusa, Tina thinks it is nice but not cheap enough for flipping. Tina says to get a good buy you need to be patient.

And now, Tina and Al are driving to her next target.

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That story was produced by Yasser Zhang. Emily Frost spoke with him about the story behind the story with the help of translator Kristie Hang. Frost asked him about the trend of young Chinese buying homes in the US.

Kristie Hang has a degree in Asian Humanities and studies broadcast journalism at USC. She works at MYX TV, an Asian American lifestyle channel.

Yasser Zhang is a visiting scholar at USC. He is from Beijing.