Cash Buyers

User Forum Topic
Submitted by sdrealtor on June 10, 2022 - 9:26am

Starting a thread so I dont forget. Still have not gotten a Zip code selection from DZ

For now its gonna be

92009
92130
92122

Im gonna throw in a more urban one like North Park. Will also try try to do some digging into 92037

It is gonna take some time but general plan is to identify what % of sales are cash (attached and detached) and what do those cash buyers look like (investor vs owner occ).

Am I missing anything?

Submitted by deadzone on June 10, 2022 - 9:38am.

I would be more interested in knowing what % of cash buyers are living in the house as their primary residence. Probably can't know that for sure from available data. But I would assume that most cash buyers are NOT purchasing a primary residence with all cash. I'm not saying it doesn't happen, but doesn't really make sense with mortgage rates so low in recent years.

Point is Nationally, a lot of RE purchases have been investors either buying rental properties or 2nd, 3rd vacation homes etc. As interest rates go up, and RE prices start to collapse, I expect the demand for these purchases to dry up, and eventually many of these investors will have to jettison their extra properties if values drop too low (while their Stock portfolios are also dropping and triggering margin calls).

Submitted by sdrealtor on June 10, 2022 - 11:01am.

If the tax records indicate a mailing address different than the physical address it’s not a primary residence. There are a few other ways but i think i can answer whether it’s owner occupied with well over 90% confidence level

Second homes are not investment purchases. They are for enjoying

Do you have a zip code to add?

Submitted by XBoxBoy on June 10, 2022 - 11:04am.

deadzone wrote:
I would be more interested in knowing what % of cash buyers are living in the house as their primary residence. Probably can't know that for sure from available data. But I would assume that most cash buyers are NOT purchasing a primary residence with all cash. I'm not saying it doesn't happen, but doesn't really make sense with mortgage rates so low in recent years.

I would disagree, and I'll use myself as an example. For a number of years my wife and I have been looking for a bigger house. We have been steadily saving money and due to stock market gains have amassed more than we would have thought possible. In early January a house we really liked came on the market in La Jolla. It was virtually all the things we had been looking for. When the house went on the market, the listing agent told everyone that cash offers would be preferred. So we made a full price cash offer, with an escalator clause. (30 day escrow) There were several competing offers and for reason I won't get into here, while not the top price (but close) we were selected as the purchasers provided we would switch to a 15 day escrow. So, we agreed. Before January was out, we'd sold a shocking amount of stock and paid a ton of money for our dream house.

But, despite this being our dream house, that's not to say it didn't need some work and updates. So... we are in the process of getting plans for the remodel we will do, and it will easily be a year before we move in. So, looking at tax records, you will see that our primary address is the house we are currently living in, but will probably sell in a year or so when we move to the new house.

All of this is a simple example of how people buying houses for their primary residence with all cash exist out here. We aren't investors, despite owning two houses, nor are we that unusual. I've know several other people in the area who have done the exact same thing we are doing.

Submitted by deadzone on June 10, 2022 - 11:14am.

sdrealtor wrote:
If the tax records indicate a mailing address different than the physical address it’s not a primary residence. There are a few other ways but i think i can answer whether it’s owner occupied with well over 90% confidence level

Second homes are not investment purchases. They are for enjoying

Do you have a zip code to add?

Okay, just curious if that is possible to tell how many cash offers are primary. I don't care about any particular zip, just in general. I understand that 2nd and 3rd home are not necessarily investment properties, but many times if not most times they are. And either way, those homes will be the quickest to be jettisoned in an economic downturn. Also I understand that there are cases where people pay cash for primary, definitely that is more common recently due to the fact that regular people are having to compete with investors and foreign money interests who are paying cash.

In a normal RE market, which we most definitely have not been in for recent years, I expect people paying cash for primary residence was pretty rare.

Submitted by pinkflamingo on June 10, 2022 - 11:27am.

Nice! I'm curious as well. What I found so far.

Startups that let you do this. Flyhomes and ribbon. General idea is you pay a little more and they get you a "cash offer". Not 100% sure how they work.

Not really using cash in a cash offer. From reddit, "They're providing proof of funds via assets they don't actually plan to liquidate to purchase the home. EX: I put in a cash offer, proof of funds via my 401k. I am getting a mortgage" I've heard OpenDoor has a "cash backed" offer.

Loan against assets.
I've heard of people getting loans against their 401k and/or stock portfolios. Is this a new thing? Is it via margin loan or is there a new financial vehicle. I would like to know more about this and what happens if the portfolio falls.

Submitted by Coronita on June 10, 2022 - 12:22pm.

sdrealtor wrote:
If the tax records indicate a mailing address different than the physical address it’s not a primary residence. There are a few other ways but i think i can answer whether it’s owner occupied with well over 90% confidence level

Second homes are not investment purchases. They are for enjoying

Do you have a zip code to add?

Generally speaking,yes. But for me, all my property tax bills go to a PO Box, because otherwise I get hit with solicitations at my home address by companies and people dumpster diving in the county public records that list the property and mailing address of the tax bill.

Two ways to determine if a house is primary residence are:

1. look at the property tax bill and see if there's a primary residence homeowner's exemption on it.

2. if the property is inside the city of san diego jurisdiction, see if the address has an rental business tax on it.

Example that I randomly pulled in LJ.,..
ptax2ptax2

Homeowner's exception $0 => not owner occupied.

Submitted by deadzone on June 10, 2022 - 12:49pm.

pinkflamingo wrote:
Nice! I'm curious as well. What I found so far.

Startups that let you do this. Flyhomes and ribbon. General idea is you pay a little more and they get you a "cash offer". Not 100% sure how they work.

Not really using cash in a cash offer. From reddit, "They're providing proof of funds via assets they don't actually plan to liquidate to purchase the home. EX: I put in a cash offer, proof of funds via my 401k. I am getting a mortgage" I've heard OpenDoor has a "cash backed" offer.

Loan against assets.
I've heard of people getting loans against their 401k and/or stock portfolios. Is this a new thing? Is it via margin loan or is there a new financial vehicle. I would like to know more about this and what happens if the portfolio falls.

I've heard about these techniques (tricks) too. If this is common, what's going to happen if we have a 30-40% crash in stock market, to all of the folks who secured these real estate loans using their 401K, brokerage account or corporate stock options as collateral? When that margin call hits, will they be kicked out of their house like a bank Repo?

Submitted by sdrealtor on June 10, 2022 - 1:04pm.

XBoxBoy wrote:
deadzone wrote:
I would be more interested in knowing what % of cash buyers are living in the house as their primary residence. Probably can't know that for sure from available data. But I would assume that most cash buyers are NOT purchasing a primary residence with all cash. I'm not saying it doesn't happen, but doesn't really make sense with mortgage rates so low in recent years.

I would disagree, and I'll use myself as an example. For a number of years my wife and I have been looking for a bigger house. We have been steadily saving money and due to stock market gains have amassed more than we would have thought possible. In early January a house we really liked came on the market in La Jolla. It was virtually all the things we had been looking for. When the house went on the market, the listing agent told everyone that cash offers would be preferred. So we made a full price cash offer, with an escalator clause. (30 day escrow) There were several competing offers and for reason I won't get into here, while not the top price (but close) we were selected as the purchasers provided we would switch to a 15 day escrow. So, we agreed. Before January was out, we'd sold a shocking amount of stock and paid a ton of money for our dream house.

But, despite this being our dream house, that's not to say it didn't need some work and updates. So... we are in the process of getting plans for the remodel we will do, and it will easily be a year before we move in. So, looking at tax records, you will see that our primary address is the house we are currently living in, but will probably sell in a year or so when we move to the new house.

All of this is a simple example of how people buying houses for their primary residence with all cash exist out here. We aren't investors, despite owning two houses, nor are we that unusual. I've know several other people in the area who have done the exact same thing we are doing.

I would have figured that out. Someone buying a $1M plus home for cash in the area they live fro a long time and own another is not likely an investor. Thats not the profile of someone buying a house to rent or flip.

Submitted by sdrealtor on June 10, 2022 - 1:20pm.

Ok here's the first one.

92009 Attached.
52 sales of which 8 are cash. From least expensive to most expensive

Long time local owns no other investment properties. Have lived long enough this could be for young adult kid but Id lean toward investment

Vacation/Retirement Home- older executive from southern state bought nice turnkey condo with view. Very likely investment

LLC- definitely investor

Local investor

Retirement age couple live inland in same house for 25+ years. No other properties besides current home. Either bought for retirement income or for downsize move closer to beach area which is common here. Coin toss

Definitely primary

Definitely primary

Recent retiree of local public company. This is definitely a retirement/vacation home. Its around corner from former company, a price that would not pencil in any way and a guy that could easily retire with 1 to 3 others easily to split time.

It looks like the investment properties skew heavily to the low end

Out of 8 cash sales we have
2 primaries
2 second homes
2 investors
2 unknown could be investor/for family member or future retirement home

Submitted by sdrealtor on June 10, 2022 - 2:26pm.

Typo above. Out of state buyer not investor

And the second one. Forgot to add the time period is April/May closed sales for all

92009 Detached
61 sales of which 11 are all cash. These will be much easier

10 are primary residences. The last and most expensive is owned by someone that owns at 3 others locally. This is the nicest one and seems to be case of moving up but there's a chance it could be used as high end rental. Person does not appear to be employed and my guess would be inherited wealth/property. Id consider this one investor possible

There are essentially no cash investor purchases up here in single family homes. The buyers are a pretty impressive group of law partners, executives, workers at high flying tech/health care companies and financial professionals. they all seem to have bought very nice homes for their families to live in.

Submitted by sdrealtor on June 10, 2022 - 1:58pm.

deadzone wrote:
pinkflamingo wrote:
Nice! I'm curious as well. What I found so far.

Startups that let you do this. Flyhomes and ribbon. General idea is you pay a little more and they get you a "cash offer". Not 100% sure how they work.

Not really using cash in a cash offer. From reddit, "They're providing proof of funds via assets they don't actually plan to liquidate to purchase the home. EX: I put in a cash offer, proof of funds via my 401k. I am getting a mortgage" I've heard OpenDoor has a "cash backed" offer.

Loan against assets.
I've heard of people getting loans against their 401k and/or stock portfolios. Is this a new thing? Is it via margin loan or is there a new financial vehicle. I would like to know more about this and what happens if the portfolio falls.

I've heard about these techniques (tricks) too. If this is common, what's going to happen if we have a 30-40% crash in stock market, to all of the folks who secured these real estate loans using their 401K, brokerage account or corporate stock options as collateral? When that margin call hits, will they be kicked out of their house like a bank Repo?

Not common and certainly not common here. Not even a chance

Submitted by sdrealtor on June 10, 2022 - 2:28pm.

deadzone wrote:
sdrealtor wrote:
If the tax records indicate a mailing address different than the physical address it’s not a primary residence. There are a few other ways but i think i can answer whether it’s owner occupied with well over 90% confidence level

Second homes are not investment purchases. They are for enjoying

Do you have a zip code to add?

Okay, just curious if that is possible to tell how many cash offers are primary. I don't care about any particular zip, just in general. I understand that 2nd and 3rd home are not necessarily investment properties, but many times if not most times they are. And either way, those homes will be the quickest to be jettisoned in an economic downturn. Also I understand that there are cases where people pay cash for primary, definitely that is more common recently due to the fact that regular people are having to compete with investors and foreign money interests who are paying cash.

In a normal RE market, which we most definitely have not been in for recent years, I expect people paying cash for primary residence was pretty rare.

And you would be wrong. In many parts of the country there are lots of cash purchases albeit lower prices in some of them. Its less common here due to high pries but becoming more common as we become more of a destination for the wealthy that can afford those high prices. Considering 2nd or 3rd homes investors is patently false. They are the accoutrements of wealth

Submitted by an on June 10, 2022 - 2:34pm.

sdrealtor wrote:
deadzone wrote:
sdrealtor wrote:
If the tax records indicate a mailing address different than the physical address it’s not a primary residence. There are a few other ways but i think i can answer whether it’s owner occupied with well over 90% confidence level

Second homes are not investment purchases. They are for enjoying

Do you have a zip code to add?

Okay, just curious if that is possible to tell how many cash offers are primary. I don't care about any particular zip, just in general. I understand that 2nd and 3rd home are not necessarily investment properties, but many times if not most times they are. And either way, those homes will be the quickest to be jettisoned in an economic downturn. Also I understand that there are cases where people pay cash for primary, definitely that is more common recently due to the fact that regular people are having to compete with investors and foreign money interests who are paying cash.

In a normal RE market, which we most definitely have not been in for recent years, I expect people paying cash for primary residence was pretty rare.

And you would be wrong. In many parts of the country there are lots of cash purchases albeit lower prices in some of them. Its less common here due to high pries but becoming more common as we become more of a destination for the wealthy that can afford those high prices. Considering 2nd or 3rd homes investors is patently false. They are the accoutrements of wealth

Exactly! That's similar to calling anyone with a savings or checking account an investor.

Submitted by teaboy on June 10, 2022 - 3:09pm.

Thanks for sharing all this, sdr!
..I might be a little late to the game here, but could we add 92129, too? :-D

tb

Submitted by sdrealtor on June 10, 2022 - 3:20pm.

Sure. I’m packing it in for the day getting ready for my weekly wine dinner with friends. I’ll try to look at one or two more zips tomorrow

Submitted by Coronita on June 10, 2022 - 3:48pm.

deadzone wrote:
pinkflamingo wrote:
Nice! I'm curious as well. What I found so far.

Startups that let you do this. Flyhomes and ribbon. General idea is you pay a little more and they get you a "cash offer". Not 100% sure how they work.

Not really using cash in a cash offer. From reddit, "They're providing proof of funds via assets they don't actually plan to liquidate to purchase the home. EX: I put in a cash offer, proof of funds via my 401k. I am getting a mortgage" I've heard OpenDoor has a "cash backed" offer.

Loan against assets.
I've heard of people getting loans against their 401k and/or stock portfolios. Is this a new thing? Is it via margin loan or is there a new financial vehicle. I would like to know more about this and what happens if the portfolio falls.

I've heard about these techniques (tricks) too. If this is common, what's going to happen if we have a 30-40% crash in stock market, to all of the folks who secured these real estate loans using their 401K, brokerage account or corporate stock options as collateral? When that margin call hits, will they be kicked out of their house like a bank Repo?

Definitely not possible with a 401k account...Not even close...

401k cannot be used as a pledged asset for a very simple reason...

1) https://www.irs.gov/retirement-plans/a-g...

Code section 401(a)(13):

The plan must provide that benefits provided under the plan may not be assigned or alienated. In practice, the plan must not allow the assignment or alienation of any employee’s interest in the plan, other than for certain participant loans if they are provided for under the plan terms, and for certain qualified domestic relations orders.

In other words, The IRS does NOT allow 401k accounts to be used as a pledged asset to secure a loan, outside of the 401k account itself offering a loan option, which is usually limited to a low amount ($50k or your balance, whichever is lower)....

2) No lender in their right mind would accept a 401k as a pledged asset, because

https://www.investopedia.com/articles/pe...

Retirement accounts that qualify under the Employee Retirement Income Security Act (ERISA) are generally protected from creditors, bankruptcy proceedings and civil lawsuits. Your retirement assets are not at risk if your employer declares bankruptcy. In addition, creditors to whom you owe money cannot make a claim against funds held in your retirement account.

To be ERISA-qualified, a retirement plan must be set up and maintained by your employer (and/or a separate employee organization) and comply with federal rules regarding reports to plan participants, funding and vesting. Common types of ERISA accounts include 401(k) plans, deferred compensation plans, pensions and profit-sharing plans.

That's why under no circumstances should you withdraw from a 401k retirement account to pay off debt even if you're in a financial bind... In the worst case, it's a protected asset even during bankruptcy...This isn't rocket science and those who are financially savy also know this is the case for 401k.....

Now it is possible to borrow money against your after tax brokerage account, but as sdr said, it's quite uncommon...few cases are done by the financially stupid people that do so at the risk of getting a margin call... But where's prevalent is it's done by really rich people where their pledged asset is several orders of magnitude larger than the loan amount...For example, a Mark Zuckerberg borrowed $5.95 million on a 1.75% ARM loan from Morgan Stanley, which as you know is an investment bank. So it was probably some pledge asset arrangement. Morgan Stanley was also the company that was the underwriter for Facebook's IPO.

https://financialpost.com/technology/zuc...

He later refinanced it to 1.05% 30 year
ARM loan from a standard bank.

Wishful thinking as this would be wide driver of people forced to sell.

Submitted by an on June 10, 2022 - 3:49pm.

Coronita wrote:
But where's prevalent is it's done by really rich people where their pledged asset is several orders of magnitude larger than the loan amount...For example, a Mark Zuckerberg borrowed $5.95 million on a 1.75% ARM loan from Morgan Stanley, which as you know is an investment bank. So it was probably some pledge asset arrangement. Morgan Stanley was also the company that was the underwriter for Facebook's IPO.

https://financialpost.com/technology/zuc...

He later refinanced it to 1.05% 30 year
ARM loan from a standard bank.

Wishful thinking as this would be wide driver of people forced to sell.


Exactly, this is the vehicle for the wealth. Not for your average joe. It allow them to get access to liquity of their stock investment without having to sell it. It's a win win scenario. Low risk for the lender (easy money).

Submitted by Coronita on June 10, 2022 - 3:54pm.

an wrote:
Coronita wrote:
But where's prevalent is it's done by really rich people where their pledged asset is several orders of magnitude larger than the loan amount...For example, a Mark Zuckerberg borrowed $5.95 million on a 1.75% ARM loan from Morgan Stanley, which as you know is an investment bank. So it was probably some pledge asset arrangement. Morgan Stanley was also the company that was the underwriter for Facebook's IPO.

https://financialpost.com/technology/zuc...

He later refinanced it to 1.05% 30 year
ARM loan from a standard bank.

Wishful thinking as this would be wide driver of people forced to sell.


Exactly, this is the vehicle for the wealth. Not for your average joe. It allow them to get access to liquity of their stock investment without having to sell it. It's a win win scenario. Low risk for the lender (easy money).

It's goes well beyond the loan... Because of their large pledged assets, an investment bank is more than happy to given them a ridiculously low rate loan product that most normal people cannot get themselves...for the privilege of having a hand in those pledged assets, which the i-bank can do something with now...

Submitted by an on June 10, 2022 - 4:00pm.

Coronita wrote:
an wrote:
Coronita wrote:
But where's prevalent is it's done by really rich people where their pledged asset is several orders of magnitude larger than the loan amount...For example, a Mark Zuckerberg borrowed $5.95 million on a 1.75% ARM loan from Morgan Stanley, which as you know is an investment bank. So it was probably some pledge asset arrangement. Morgan Stanley was also the company that was the underwriter for Facebook's IPO.

https://financialpost.com/technology/zuc...

He later refinanced it to 1.05% 30 year
ARM loan from a standard bank.

Wishful thinking as this would be wide driver of people forced to sell.


Exactly, this is the vehicle for the wealth. Not for your average joe. It allow them to get access to liquity of their stock investment without having to sell it. It's a win win scenario. Low risk for the lender (easy money).

It's goes well beyond the loan... Because of their large pledged assets, an investment bank is more than happy to given them a ridiculously low rate loan product that most normal people cannot get themselves...for the privilege of having a hand in those pledged assets, which the i-bank can do something with now...

This is why the rich can keep on getting richer... they can play by a different sets of rules.

Submitted by deadzone on June 10, 2022 - 4:01pm.

sdrealtor wrote:

Considering 2nd or 3rd homes investors is patently false. They are the accoutrements of wealth

accoutrement of wealth <--> Investment
as
tomayto <--> tomahto

Submitted by deadzone on June 10, 2022 - 4:03pm.

sdrealtor wrote:

Not common and certainly not common here. Not even a chance

Perhaps, but you have no way of knowing. Just looks like a cash deal to the outsider.

Submitted by sdrealtor on June 10, 2022 - 4:08pm.

deadzone wrote:
sdrealtor wrote:

Not common and certainly not common here. Not even a chance

Perhaps, but you have no way of knowing. Just looks like a cash deal to the outsider.

Not true. Those are short term loans. They need to be refinanced into a regular loan. Those guys are just offering cash to close but want out quickly

Pledged asset loans are a different thing and for the wealthy

Submitted by sdrealtor on June 10, 2022 - 4:06pm.

deadzone wrote:
sdrealtor wrote:

Considering 2nd or 3rd homes investors is patently false. They are the accoutrements of wealth

accoutrement of wealth <--> Investment
as
tomayto <--> tomahto

Again clueless. They are excessive expenditures and luxury items for those that can afford them.

Submitted by an on June 10, 2022 - 4:21pm.

sdrealtor wrote:
deadzone wrote:
sdrealtor wrote:

Considering 2nd or 3rd homes investors is patently false. They are the accoutrements of wealth

accoutrement of wealth <--> Investment
as
tomayto <--> tomahto

Again clueless. They are excessive expenditures and luxury items for those that can afford them.


Maybe in DZ's world, Rolex and Ferrari and yacht are also investments.

Submitted by pinkflamingo on June 10, 2022 - 9:17pm.

Interesting. Thanks for the detailed explanation.

Submitted by deadzone on June 10, 2022 - 10:03pm.

sdrealtor wrote:
deadzone wrote:
sdrealtor wrote:

Considering 2nd or 3rd homes investors is patently false. They are the accoutrements of wealth

accoutrement of wealth <--> Investment
as
tomayto <--> tomahto

Again clueless. They are excessive expenditures and luxury items for those that can afford them.

So my collection of gold jewelry is an excessive expenditure? Even though it is kept in safe deposit boxes, not displayed nor worn? I guess it could fall into either category depending on perspective.

Submitted by sdrealtor on June 10, 2022 - 11:25pm.

Uhhhh anything can be bought as an investment. That doesn’t make the item an investment. You buy gold jewelry as an investment because it’sa stable store of value you can buy at a discount. That’s not reality for 99.99%. Mr T did not buy it as an investment

Submitted by Coronita on June 11, 2022 - 2:22am.

deadzone wrote:
sdrealtor wrote:
deadzone wrote:
sdrealtor wrote:

Considering 2nd or 3rd homes investors is patently false. They are the accoutrements of wealth

accoutrement of wealth <--> Investment
as
tomayto <--> tomahto

Again clueless. They are excessive expenditures and luxury items for those that can afford them.

So my collection of gold jewelry is an excessive expenditure? Even though it is kept in safe deposit boxes, not displayed nor worn? I guess it could fall into either category depending on perspective.

(Facepalm)

Seriously?

Gold, just like a house is dual purpose. It could be bought either as an investment (something bought with the consideration towards financial gain) OR something just for enjoyment (without consideration for financial gain).

If I buy a gold ring for significant other, it's hardly that I'm thinking "well honey, I got this for you because I found this ring at the pawn shop and gold is right now only $1800/ounce, here you go." It's more like "here honey, I got my bonus, this is what you looking at you liked but didn't buy because you thought it wasn't a necessity. Or here sweetie, I got you this because you got straight A's last quarter..."

Same thing goes for houses... Vacation houses, are the equivalent to these enjoyment gold purchases, for financially well off people. Vacation houses (2nd/3rd houses) are things that typically richer people buy for enjoyment because they can. Financial gain considerations, if any, is a lower priority. For example, my sibling bought a townhome in Lake Tahoe because they enjoy skiing every weekend. They can afford to purchase it outright. They took out a loan to buy it, since one of them got a employee sweetheart loan from the i-bank he works at, similar to what Mark Z got from his i-bank. They don't care how much it cost, because they enjoy skiing and like the fact they don't need to rent a place each weekend they go. As a second consideration, anytime they aren't using the condo, they will try to rent it out, so that they can recoup some of the cost they are spending to enjoy the condo, but even if they are unable to rent out the condo, it won't affect their decision to buy and keep it indefinitely. They do the same thing with select reserve wine where they buy several bottles of reserve wine, drink most of them, and sell some of them to reduce how much money they spent on buying to consume those bottles of wine.

Again, dz, why are you so combative on this minor distinction of whether a vacation home is or is not an "investment"? In the greater scheme of things, vacation homes does not fit your conviction that these are homes that will be sold in a firesale if there is a downturn in housing because they are typically owned by wealthy people who aren't stretched thin and be inclined to sell because a stock market or real estate market corrects...Again, it's probably hard to imagine because they are in a world completely different from yours where them buying a vacation home financially is as easy and insignificant to their total net worth as you buying 1 small piece of jewelry versus your entire net worth. Must every technicality be combatively debated just so support your conviction?

Submitted by Coronita on June 11, 2022 - 2:21am.

.

Submitted by Coronita on June 11, 2022 - 2:21am.

an wrote:
sdrealtor wrote:
deadzone wrote:
sdrealtor wrote:

Considering 2nd or 3rd homes investors is patently false. They are the accoutrements of wealth

accoutrement of wealth <--> Investment
as
tomayto <--> tomahto

Again clueless. They are excessive expenditures and luxury items for those that can afford them.


Maybe in DZ's world, Rolex and Ferrari and yacht are also investments.

Ferrari's can be investments. But those are typically bought and become garage queens and never driven, and they are usually some vintage age, not something new. There are people that buy some cars and literally keep them in a climate controlled warehouse and never drive them. But again, that group of people are small, relative to the rest of the people buying Ferrari's.

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