[tomg]

I don’t understand how a waiter and a home-care provider can afford to buy a rental property that is apparently worth charging $80,000/yr in rent. I’m in the wrong business!

[edit: to be clear, this is tongue in cheek, though the circumstances where a bank made this loan seem unusual to me]

[watsocd]

By being extremely frugal. Did you read the part of the article where the owner does not live in the house. The owner lives in a "cheap studio apartment nearby with their two young daughters". That is how!

[tomg]

> By being extremely frugal. Did you read the part of the article where the owner does not live in the house. The owner lives in a "cheap studio apartment nearby with their two young daughters". That is how!

You’re referring to Gao, I’m referring to Won. Different people.

[yellowapple]

And the top-level was seemingly referring to Gao by referencing the $80k in back rent.

[tomg]

> Won says her tenant owes her more than $80,000 in back rent.

[tomg]

Oh whoops I've been wrong this whole time, my bad!

[sbierwagen]

Frugal? Interesting.

Let us closely examine the text.

>Take Won, a Chinese immigrant landlord who asked that we only use her last name. She owns a two-family house in Queens and works as a home health aide caring for an elderly couple. Her husband is a waiter at a restaurant in Manhattan's Chinatown, though he's barely been able to work since the pandemic began. Won says her tenant owes her more than $80,000 in back rent. "I just want the government to open the court," she tells Reason.

She owns a house in New York City. To put it mildly, NYC real estate is not cheap. How did she do it? Cash transaction? Is it mortgaged? Those are two very different types of ownership... but Reason makes no distinction between the two. Why? If she was on the hook for a mortgage payment, surely they would have brought it up, since it would have made her case much better. But they didn't.

The tenants owe $80,000 over a year? $6,666 a month? How big is this house? When did Won buy it? How much did she pay?

It would be two very different stories if Won had bought the place in 1970 for ten grand, versus a $2 million straw buy for a PRC upper party member. Reason doesn't want to tell us which, because it is an explicitly ideological publication, funded to promote a specific view of the world. I don't blame Reason for wanting to be the NYT of Libertarianism, but you do need to apply a degree of critical thinking to what they say.

There is absolutely zero chance a home health aide bought a house in New York City by "being frugal" any time in the 21st century. Either she bought it many decades ago, or the money came from somewhere else.

[bigmattystyles]

Frugal is not plausible but a straw buyer for a PRC member (and who is going to voluntarily talk to a newspaper) is? I'd argue buying in the Bronx or Brooklyn in the 80s, putting in sweat equity where possible and reaping the benefits much later is much more plausible.

[nostrademons]

Leverage & frugality.

Double 3/1 duplexes in Queens go for about $1M; the monthly payments on this are about $5200/month [1]. Each unit will rent for about $2700/month [2][3], so you're making a profit of about $200/month and paying down the principal steadily. You just need to cover a $200K down-payment. Minimum wage in NYC is $15/hour, so a two-earner couple working 40-hour weeks makes about $60K/year; it could be up to $90K if they each have work 12 hour days, as many Chinese immigrants do. Live in a 1BR apartment and you're spending about $15K/year on rent, maybe $25-30K/year on all expenses. You can save up for that down payment in about 4 years.

I don't have too much sympathy for them because the risk of being unable to find a tenant and hence unable to make your mortgage payment is precisely why not everybody levers up as much as possible to buy a rental property. But that's how the numbers work out. Most people on HN could probably do it, if they had the savings habits and risk tolerance of that couple.

[1] https://www.zillow.com/homedetails/17520-Baisley-Blvd-Jamaic...

[2] https://www.zillow.com/homedetails/131-19-134th-St-South-Ozo...

[3] https://www.zillow.com/homedetails/180-05-90th-Ave-FLOOR-1-J...

[heavyset_go]

Statistically, it's just as likely, or more likely[1], that the owners inherited the properties, which is how most wealth is acquired.

[1] https://www.washingtonpost.com/us-policy/2019/02/06/people-l...

[nostrademons]

The article is about immigrants. The parents of immigrants don't live in the U.S, so it's extremely unlikely that they got property through inheritance. (You can't apply statistical conclusions about a large group [all Americans] to individual subgroups [Chinese immigrant waiters & home-care providers] without adjusting your priors, and in this case there is a very strong prior for "parents did not own property in the U.S.")

[heavyset_go]

There is nothing stopping family members in the US from gifting or passing on property to their immigrant family members, or inheriting property through marriage.

[samspenc]

FOMO? Leverage? I have a couple of anecdotal stories I know personally: a friend of a friend working in a jewelry store recently purchased a Manhattan condo as an investment that brings in around $3,000 in monthly rent.

A few years ago I was visiting Vancouver and living in an AirBnB (private room in a house) when prices were dropping, and the owner (a school teacher) was crying about how over-leveraged she was with her million-dollar-plus house, and how she was trying to get sell it, even at a loss.

[imgabe]

It is amazing what people can do when they work at it instead of demanding others give them stuff for free.

[nerdponx]

No amount of "working at it" is going to make you $80k as any restaurant employee.

[imtringued]

It's much easier to earn $80k by not paying rent though. If we assume that the Chinese landlords had a well paying job they still had to spend years saving up money. A tenant can just decide to stop paying at any time if he knows he is immune from the court.

One reason why the housing market is such a shitshow is that there is antagonism between both sides. Tenants hate landlords, landlords hate tenants. Nobody will ever consider doing favors because the other side betrayed them.

[imgabe]

I guess if you define yourself as only a "restaurant employee" and never consider doing anything else you might be right. The thing about humans is that they are flexible, adaptable, and creative and can do many different kinds of tasks.

You don't get handed a random job by the job fairy and then that's the only thing you ever get to do for the rest of your life.

[nerdponx]

Stop being glib. We are talking about a person whose job was stated in the article, not some hypothetical rags to riches tale.

[imgabe]

Yes, and that person did not blindly consign themselves to their fate as a "restaurant employee". They acted and are also a landlord, because people are not one-dimensional characters that fill in the background in your worldview. They are people in their own right with their own ambitions and plans and are capable of directing their own lives. They don't have to live within whatever narrow conception you happen to have about their current employment.