Sight unseen, Detroit properties were being snatched up as China Central Television, the state broadcaster, reported that two houses in Detroit cost the same as a pair of leather shoes. The smartest thing the Chinese investors could do is walk right by those Detroit houses.
In the Forbes piece, Caroline Chen, who sells Detroit real estate, says, "I have people calling and saying, 'I'm serious -- I wanna buy 100, 200 properties. They say, 'We don't need to see them. Just pick the good ones.'" One doesn't have to see the houses to know that there are no "good ones" for $39. If there were, local investors would have purchased the houses long ago.
What these companies don't require -- unlike a $39 house -- is thousands and thousands of dollars' worth of work to start generating income. There is no way a house for $39 is in shape to be rented. If it were, it would have been long, long ago.
Houses are expensive to own in terms of time and money. Stocks aren't. Investors don't even have to take possession of a paper certificate anymore.