My Age of Investment

   Chapter 1231 Foreclosure and Charter

   "All our real estate assets are here."

  In the Silicon Valley office of Vision Capital, Tom, the CEO of the Dog Family Office, handed Abel a file bag.

  Abel took the cowhide bag with both hands, then quickly opened the bag, took out a bundle of bound documents, and carefully read it in his hands.

   Upon seeing this, Xia Jingxing and the dog stopped talking and watched Abel silently together.

   A few minutes later, Abel put the document gently on the table and asked, "A total of 286 properties?"

  Tom replied: "Yes, and it's all real estate in big cities like San Francisco and Los Angeles."

   "Big city real estate that almost fell by half?"

   Being ridiculed by Abel, Tom's face suddenly became a little unsightly.

Abel stopped paying attention to Tom, turned his head to look at the dog, and said in a serious tone: "Mr. dog, the purchase price of these nearly 300 properties is as high as more than 90 million US dollars, and the current market value is worth 50 million US dollars, in other words, a loss. It's almost halfway there."

  The dog nodded, "I know this, we just bought this batch of properties, and then the subprime mortgage crisis broke out, and the property market plummeted.

   At that time, Darren reminded us to sell all the houses as soon as possible, and we complied, but it was still a step too late, and only 20 or 30 houses were sold. "

  Speaking of this, the little dog cast an apologetic look at Xia Jingxing, he felt that he had failed the boss's expectations a bit, and he often stabbed in the basket, and finally the boss had to help with the aftermath.

  Xia Jingxing patted the dog on the shoulder, "The loss on the property is actually okay. Fortunately, you disposed of the $100 million CDO assets. Otherwise, their value may have been cleared by now."

The dog smiled and nodded. With Xia Jingxing's reminder, he ordered Tom to quickly sell the CDO assets at a 10% discount in exchange for $90 million in cash, which he then handed over to Vision Capital. in management.

   Nearly two years have passed, and the return on this investment has exceeded ten times.

  If Xia Jingxing didn't help him, let alone earning ten times the rate of return, he would lose even his pants.

Benefiting from the high level of investment of Vision Capital, his loss of US$50 million in real estate investment was easily covered by the gains from investing in hedge funds, and he no longer needed to pledge US$250 million in equity loans. And feel worried.

   For the kindness of Xia Jingxing, the dog has always kept in mind, and mailed various small gifts to the former to the former every month.

  Xia Jingxing looked at Abel and said, "Now all the properties held by the dog family office are here, tell them how Vision Capital plans to operate next."

  Abel said "yes" and began to introduce: "Vision Capital plans to set up a real estate recovery fund next, and the initial fundraising scale is 1 billion US dollars.

  There is only one investment direction, aiming at those properties that are auctioned by the court because of broken mortgage. "

  Tom opened his mouth and asked, "Buying a foreclosure house?"

  Abel shrugged, "That's right, we're targeting those houses.

   First, they are cheaper than ordinary houses and have more room for arbitrage.

  Secondly, the scale of foreclosure houses is very large. Banks and courts conduct centralized auctions, which is more labor-saving than offline collection of houses one by one.

  Finally, this is a business action that actively responds to the government's call to bail out the market, and can get the dual support of the government and the bank.

  When necessary, we can also use debt for acquisitions to increase leverage. "

   The puppy was stunned when he heard it, and the boss shot, really extraordinary!

   His real estate flipping is the most unpromising type, full of real estate flipping.

   And the boss directly used up the leverage, afraid that he would have to buy thousands or tens of thousands of houses?

  Xia Jingxing smiled slightly. Foreclosures are not only popular in China, but also have huge arbitrage space in the United States.

  In the context of the outbreak of the financial crisis, millions of foreclosure houses have appeared in the market, and banks and courts have been devastated by these bad debts.

  In order to solve these troublesome debts as soon as possible, banks usually choose to sell the house at a discount and withdraw cash.

  Tom asked again: "How to withdraw profit after acquiring a foreclosure house?"

   "That's a good question!"

  Abel, with a confident look in his chest, explained in a slow voice: "Our exit plan is to renovate the house and re-list it for sale to earn the difference."

  Tom smiled, he thought there was a new way to play, but it turned out to be an old routine.

   "I have a question, what if the house can't be sold after renovation? Now the housing market is wailing, and ordinary people hardly dare to buy a house again."

  Abel glanced at Tom, to be honest, he didn't think highly of the CEO.

   If it wasn't for Vision Capital, the $250 million in assets of the dog family office would have been lost by this guy in front of him.

   If it was him, he would lose so much money to his employer, and he would definitely be ashamed to continue to stay in the company.

  Seeing the puppy looking at him expectantly, Abel patiently explained: "This involves the second profit plan, renting a house!

   In recent years, young people have been pouring into big cities in the United States, and the demand for rental housing has surged, so there is no need to worry about renting.

  Renovated house, the rent can be increased by a part.

   And the rent can continuously generate cash flow, supporting us to carry out larger-scale housing acquisitions. "

  Tom continued to pick on: "House renovation, lease management, and house maintenance are not easy things.

  Especially if you are not planning to play small games, the goal is to acquire tens of thousands of houses.

   This is a huge project, and I am worried that there will be problems with management.

  Vision Capital is an excellent investment institution, but it is not a professional real estate company. "

  Abel replied indifferently: "This involves the third profit plan. Our Real Estate Recovery Fund intends to cooperate with the Friedrich Real Estate Group to jointly establish a professional real estate leasing company."

   "Fredrich, the real estate tycoon in New York!" Tom exclaimed in surprise.

   "Yes, that's him, he is known as the businessman who knows the most about real estate in the United States!"

  Abel changed the subject: "However, he will not personally participate in this cooperation, but entrust his eldest daughter, Miss Ivanka, Vice President of Friedrich Group, to be responsible for specific contacts and cooperation with us.

   In a nutshell, the housing leasing company we plan to set up is not only to achieve profits through self-sustained property appreciation, rent, leveraged yield, etc., but when the time is right, we will also choose to promote the housing leasing company to go public.

   We don’t have to sell houses one by one, but we can sell the equity of the entire company in a package, so that we can easily and conveniently realize a profitable exit. "

   Hearing this, Tom had absolutely nothing to say, and he couldn't find it if he tried to find fault.

  Because all aspects of the problem have been taken into account, the opportunity to take a dip, abundant funds, and promising partners...

   There are even four options for profit exit!

There seems to be a reason why    Vision Capital has been so successful.

  The whole program introduced by Abel made the puppy very excited, so he almost clapped his hands and asked excitedly, "What do we need to do?"

  Xia Jingxing said: "Inject the 286 properties in your hands into our charter company and give you a share.

   For other things, just leave it alone and wait for dividends or return on equity investment. "

   The puppy nodded hastily, "No problem, you can take these houses at any time."

  Xia Jingxing smiled, looked at Abel, and said, "With more than 200 houses, the house rental company can also open. Let's do it first, explore the model, and then replicate it on a large scale."

  Abel nodded, indicating that he understood.

  The housing rental company that Vision Capital intends to set up is not a small company. According to the median house price of a house in the United States today, 150,000 to 60,000 US dollars, 1 billion US dollars of principal can buy nearly 6,000 to 7,000 houses.

   If you add leverage, rent-to-pay loans and other financing tools, it is not impossible to get 20,000 to 30,000 houses under the company's name.

Assuming that after a few years, the housing price doubles, that is, it rises back to the highest price in 2006, and if the rent received during the period can be equal to the operating expenses of the housing rental company, the investment can be doubled. After the financial leverage magnifies the income, the income can be expanded by four or five times, which is a very good investment.

   At the same time, this is the first time Envision Capital has tested the waters of real estate funds in the United States, and a benchmark case needs to be made to facilitate subsequent fundraising.

   Of course, more importantly, this is raising money from Americans and speculating in American real estate, which is similar to what Blackstone has done in China.

   Therefore, Xia Jingxing has absolutely no objection to being a charterer in the United States.

   However, his charter company is a charter company with financial thinking, or as the locals do, and knows how to use financial innovation tools to maximize investment returns.

   (end of this chapter)