all cash home purchases

My_Alter_Ego

My_Alter_Ego

New member
This is a silly question....but I honestly don't know the answer.

How do all these FCBs bring cash into the US to purchase homes?  Isn't there a pretty low limit ($10K/year??) of bringing cash within our borders?  Is cash being smuggled in or are the Chinese banks in cahoots with their clientele and skirting the system?  Or is there some loophole which makes it legal to bring cash in for the purpose of purchasing real estate?
 
My_Alter_Ego said:
This is a silly question....but I honestly don't know the answer.

How do all these FCBs bring cash into the US to purchase homes?  Isn't there a pretty low limit ($10K/year??) of bringing cash within our borders?  Is cash being smuggled in or are the Chinese banks in cahoots with their clientele and skirting the system?  Or is there some loophole which makes it legal to bring cash in for the purpose of purchasing real estate?
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Up until recently, i heard it was quite easy. Setup xyz trading company in china... Show funds... Wire it over.
 
jmoney74 said:
My_Alter_Ego said:
This is a silly question....but I honestly don't know the answer.

How do all these FCBs bring cash into the US to purchase homes?  Isn't there a pretty low limit ($10K/year??) of bringing cash within our borders?  Is cash being smuggled in or are the Chinese banks in cahoots with their clientele and skirting the system?  Or is there some loophole which makes it legal to bring cash in for the purpose of purchasing real estate?
Click to expand...

Up until recently, i heard it was quite easy. Setup xyz trading company in china... Show funds... Wire it over.
Click to expand...

Why until recently? I see tons of Chinese during open houses and model home viewings. If the FCBs drop off, does that mean us peons will have a chance now?  ;D



 
uh I'm almost positive "cash purchase" means they wire the fund (whatever the source) to escrow. versus literally bringing in a barrel of cash into the US (although some ppl, unaware of the $10k limitation imposed by US custom, do carry large quantity of cash into the US).

what china does have are banking limits in how much its citizens can wire transfer to the US per year (currently at $50k per year) - so this presents a challenge for a lot of chinese buyers to purchase a home with cash.

for some of our family friends, it was fairly straight forward as they have business accounts in HK banks with denomination in USD.

otherwise, what most ppl do involves rounding up a number of friends/associates/family members (limit is to each person, per year)... and have them transfer the amounts for them. so sometimes when you see a closing statement, you'll see multiple lines of 40k-50k deposits into the escrow account.

so yeah, if you need to buy a 1 mil+ home and you don't have a business or USD already in an account somewhere, you'll have to round up ~20 people to help you close escrow.

on a side note, if you or anyone you know (e.g. a realtor's client) needs RMB to USD, send me a PM and we may be able to help out.
 
capboba said:
uh I'm almost positive "cash purchase" means they wire the fund (whatever the source) to escrow. versus literally bringing in a barrel of cash into the US (although some ppl, unaware of the $10k limitation imposed by US custom, do carry large quantity of cash into the US).

what china does have are banking limits in how much its citizens can wire transfer to the US per year (currently at $50k per year) - so this presents a challenge for a lot of chinese buyers to purchase a home with cash.

for some of our family friends, it was fairly straight forward as they have business accounts in HK banks with denomination in USD.

otherwise, what most ppl do involves rounding up a number of friends/associates/family members (limit is to each person, per year)... and have them transfer the amounts for them. so sometimes when you see a closing statement, you'll see multiple lines of 40k-50k deposits into the escrow account.

so yeah, if you need to buy a 1 mil+ home and you don't have a business or USD already in an account somewhere, you'll have to round up ~20 people to help you close escrow. quite silly, all in all.
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An agent I spoke to said she had 25 transfers of 50K for a house she sold. 
 
hello said:
capboba said:
uh I'm almost positive "cash purchase" means they wire the fund (whatever the source) to escrow. versus literally bringing in a barrel of cash into the US (although some ppl, unaware of the $10k limitation imposed by US custom, do carry large quantity of cash into the US).

what china does have are banking limits in how much its citizens can wire transfer to the US per year (currently at $50k per year) - so this presents a challenge for a lot of chinese buyers to purchase a home with cash.

for some of our family friends, it was fairly straight forward as they have business accounts in HK banks with denomination in USD.

otherwise, what most ppl do involves rounding up a number of friends/associates/family members (limit is to each person, per year)... and have them transfer the amounts for them. so sometimes when you see a closing statement, you'll see multiple lines of 40k-50k deposits into the escrow account.

so yeah, if you need to buy a 1 mil+ home and you don't have a business or USD already in an account somewhere, you'll have to round up ~20 people to help you close escrow. quite silly, all in all.
Click to expand...

An agent I spoke to said she had 25 transfers of 50K for a house she sold.
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yeah I think the restriction is silly because it obviously doesn't stop money flowing out of the country. but thats the nature of it *shrug*
 
When I sold my condo, the buyer sent us "proof of funds" which was a web printout from their bank statement, and the whole thing (except for the numbers) was in simplified Chinese.

My agent was like "whaaaaaaaa".  They were giving proof of funds from a bank in Shanghai.  Ultimately they transferred the funds to some US Chinese Bank but took 3 transfers and 2 weeks.
 
Is there any chance that all the FCB who parked their money in homes here will one day all need to get that money out and all sell their homes?  Like China levies some tax or penalty on these guys once they see what they've done and they gotta liquidate?

 
Buy 30 rolexes and 15 Van Cleef necklaces with credit cards at SCP. Leave goods here with relatives. Go home in China to pay off credit cards. Relatives here put items up on consignment such as Hing Wah Lee and other stores in SGV. Brand name jewelries and Hermes aligator handbags women are crazy about at 5% discount. These luxury goods never go on sale. Goods are converted to cash to buy houses in Irvine.
 
I actually used to think that selling agents were bsing me when they said that they had multiple cash offers.  I heard that it's actually pretty easy to move the money out from Hong Kong since it's not illegal there.  Just imagine what will happen when Irvine is all developed.  FCB will have no choice but to buy existing homes.  Maybe I'll be able to afford something near the cemetery. 
 
irvinehomeshopper said:
Buy 30 rolexes and 15 Van Cleef necklaces with credit cards at SCP. Leave goods here with relatives. Go home in China to pay off credit cards. Relatives here put items up on consignment such as Hing Wah Lee and other stores in SGV. Brand name jewelries and Hermes aligator handbags women are crazy about at 5% discount. These luxury goods never go on sale. Goods are converted to cash to buy houses in Irvine.
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I thought about Union Pay and going over the $50,000 limit/year for Chinese nationals.  It is most likely illegal and all records are documented because it's a freaking credit card.  So the Chinese who do this are sitting on a time bomb to see if XJP will come knocking at their door.  Of course if you're good with his faction, they won't look your way...but if he wants to exert pressure, he can audit your credit card bill. 

In a fair society, he would audit everyone's credit card bill....but I'm sure he will only audit people he don't like....much like Lois Lerner & the IRS.
 
When we were selling our home a while back, a cash buyer was our first acceptance but when they detailed how they had to wire the money from overseas accounts, we went with the second offer, a normal 20% down finance buyer with money in local accounts.

The last home we sold was a 40%(?) down buyer and in their offer they provided copies of their balance in a foreign account. We went with them and the transaction went faster than escrow had planned. I wasn't aware of any issues of moving the money over (at least escrow didn't say anything).

I didn't know there were transfer limits in place so this thread is interesting to me. They moved well over $50k.
 
irvinehomeowner said:
When we were selling our home a while back, a cash buyer was our first acceptance but when they detailed how they had to wire the money from overseas accounts, we went with the second offer, a normal 20% down finance buyer with money in local accounts.

The last home we sold was a 40%(?) down buyer and in their offer they provided copies of their balance in a foreign account. We went with them and the transaction went faster than escrow had planned. I wasn't aware of any issues of moving the money over (at least escrow didn't say anything).

I didn't know there were transfer limits in place so this thread is interesting to me. They moved well over $50k.
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its its a HK bank account or a corporate account, then there's no such limitation, I believe

but yeah I didn't know about this until the wife told me too. quite a hoop the chinese cash buyers have to jump through.
 
Slowdown only seen on > $1.2m+ range, but still decent < $1m (like the EW condos).  They must've gotten tired of making daily runs at the bank and/or ATM withdrawals, lol
 
RHOC said:
AW said:
That imposed limit happened couple months ago when their market crashed, but there are still ways around it even if it takes a while longer, when there's a will, there's a way...
http://www.wsj.com/articles/china-boosts-efforts-to-keep-money-at-home-1441120882
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Hence the reason for major SLOW down in the Irvine housing right now! In a way its a blessing, tired of the FCB=(investors) inflating the market and pushing the rest of the "real" people out.. ;D
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I'm almost certain the limit was ages ago. here's some post from 2012 talking about it.

So the slow down isn't directly related to that.
 
abosch00 said:
Is there any chance that all the FCB who parked their money in homes here will one day all need to get that money out and all sell their homes?  Like China levies some tax or penalty on these guys once they see what they've done and they gotta liquidate?
Click to expand...

if that happens Irvine prices will be hit hard...
 
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