America for Sale: Outside Investors Snatch Up Housing

March 24, 2009 — -- States like Michigan, California, Nevada and Florida — all of which have struggled with tight housing markets — have seen an influx of foreign investors swooping in to snatch up real estate deals, local real estate professionals said.

Some call the foreign investors real estate vultures who are picking up the remains of a shattered housing market.

"[I've] had people come here from the U.K., certainly from Canada [and] received inquiries from Australia, Brazil, China," said Detroit real estate investor Ian Mason.

With some homes up for one-fifth of what they once cost, the nation's housing crisis has become a boon for outside investors. In February, prices plunged 16 percent from a year ago.

The tens of thousands of residences tied up in foreclosure, along with other distressed properties, have lured potential real estate buyers to the United States to take real estate tours, like a recent one in which Chinese businessmen toured upscale homes for sale in New York.

Some Chinese investors like to see a house to make sure it has the proper feng shui before making an offer, but other their foreign investors don't necessarily feel the need to leave home to buy a house.

"They don't necessarily feel a reason to come over here and look," said Pat Lashinsky CEO of Zip Realty in the San Francisco Bay area. "Some of them will actually buy just through what they're seeing on the Internet."

American investors haven't been left out of the mix. Many are purchasing homes in cities like Detroit and Cleveland to fix them up and get them back on the market.

Bruce Norris said he hopes to pick up 100 homes by year's end in California's Inland Empire east of Los Angeles.

He showed off a home he is currently renovating, which sold for $350,000 at the peak of market.

"We bought it for $55,000. We'll fix it with about $37,000, $38,000."

And in a few months, he'll list it for $165,000.

This may be a sign that the nation has hit the bottom of the real estate slide, some say.