Execute a capital Mu Qing: Why is heavily loaded with Buffett second-hand house brokerage company?

Article content from executing a speech Capital founding partner Li Mu Qing in the chain of real estate held June play Angela Games 1 at the meeting shared thinking, speech, Warren Buffett shared investment logic in a residential area. Li Mu Qing residential service is considered a good business, but also should be a sense to do business, and has a brand barriers. Execute a capital is to set up a venture capital fund by the end of 2014, so the primary market, the current size is 2.5 billion yuan management team has invested in over the way home, a lot of room and other living areas of the company, has executed a capital invested in two enterprises domestic second-hand housing services, as well as living in the chain of a series of companies. Because of the long holding period to make a market, so the company can better meet continued growth is the most important. Since 2006, we began to study living area because the country is still relatively scarce information, we spent a lot of time to study the history and current status of the US market residential areas. Buffett for residential investment in the field has been "full bore bullet" state • Residential industry has been Warren Buffett's focus on investment objects, including Wells Fargo leading real estate loans and the like. But Buffett cherished "• Berkshire Hathaway" brand named second-hand housing services company Berkshire Hathaway HomeServices-- It was a rare action. The company, formerly known as Buffett acquisition of MidAmerican Energy Company, a subsidiary of a subsidiary had called three HomeServices of America's. It would have been just a regional company, but did not expect to become a surprise. 2004 Q & A, there was investor Warren Buffett had asked a question: "? How do you view this real estate brokerage company," Buffett replied: We'll keep buying I do not know how big it will become.. Buffett often say a word, see a good subject, be sure to fill all the gun bullets, until a huge opportunity comes along will pull the trigger. A share with the words, called heavily loaded. Let's look at how heavily loaded Buffett living areas? This year's shareholders' meeting in Omaha, Buffett held on, in an obvious position this put on the back, which is the case for expansion in the US Buffett acquired three major networks, in which the shape of the house is purple Buffett purchased in the United States second-hand housing network in the United States now has 27,000 Direct network broker, plus join the network, has nearly 100,000 brokers. But Direct network currently only covers half of the US states of California, the largest almost nearly four thousand stores. There are many large states, such as Texas are not many stores, there is still room. Execute a capital Mu Qing: Why is heavily loaded with Buffett second-hand house brokerage company? Berkshire Hathaway HomeServices Direct network in the United States sold about 80 billion dollars in the house, which is more than 500 billion yuan. Was acquired from 2002 until 2015, the expansion in the United States for nearly 13 years before the United States accounted for only 7% of the market share, Buffett is why the industry is large can not imagine why. We believe that this industry will have a chance to copy the story of electricity supplier industry, as China's Alibaba turnover than the United States plus ebay Amazon bigger potential Chinese residential services market should be much larger than the United States. There are network effects and integrity of the company to get pricing Not only continued Buffett bought the company a decade after the Opening, in 2012 he did something even more surprising thing, this flagship Berkshire Hathaway to use live service industry endorsement, the "US Housing Services" (HomeServices of America) was changed to "Berkshire Hathaway • Housing service Corporation" (Berkshire Hathaway HomeServices). Execute a capital Mu Qing: Why is heavily loaded with Buffett second-hand house brokerage company? Buffett's why it is so popular for this real estate services company? The company must have three words: pricing. What kind of company can get pricing? He will never sell you invest five dollars, I sell three dollars of the company, because there play Baby Games may be someone to provide free services. In the United States, Buffett made unilateral transactions, commission income of 3.2%, while China's best city commission of just 2.7%, below the national average. The first barrier is the company's residential service network effect. Why micro-channel and Taobao can get its present status? It relies on network effects. Behind the network effect is that turnover, the National Housing annual turnover rate of 4.5%, the National 20 years for a house, Chinese people may pay attention to "Issey Miyake" life generally buy three houses. Shenzhen is the highest turnover rate of urban China, the United States to reach the national average. Shanghai turnover rate of about 3%, and only half the national average turnover rate of Beijing. In essence, that the actual flow rate is determined by population. Although the United States is China's GDP growth in the third of the US population but are still at high flow. US January data show that the top ten seller's name has four locations from California, there are some smaller cities. Buyer's market, there are many well-known cities such as Chicago, New York and Miami. Execute a capital Mu Qing: Why is heavily loaded with Buffett second-hand house brokerage company? The figure is the average price nationwide house prices contrasts with the Bay Area, we can see the blue line Flanagan is the nation's average prices, although the nation's rate has not returned to pre-crisis levels, but the core of San Jose, close Silicon Valley, a place, a new high, has exceeded the 2007 level. The United States is more than the traditional Chinese national, could be so large population movements and bring turnover happen, so this gives the brokerage firm has brought great opportunities. Execute a capital Mu Qing: Why is heavily loaded with Buffett second-hand house brokerage company? The second barrier is trust residential services company. When people are making the decision of the magnitude of buying a house, it's the biggest decision a great many families will ever make. They want to know who they're working with and we think that Berkshire Hathaway name will be reassuring to many of those people. Buffett believes that a family house is the largest consumer decision-making, it could be the largest consumer decision-making done in life, for most people, Berkshire Hathaway is trustworthy, when the advent of the financial crisis, with Berkshire Hathaway brand out when underpinning the market because trust brands, so the industry is confident. Credit from the transparency and honesty. While ago China had a lot of discussion about the house, financial leverage, why is there so play Barbie Cooking Games many problems, is one of too much information, in addition to regulators, the media and ordinary consumers are not enough to understand. In many cases, uncertainty suspicion from misleading information, in fact, Buffett also encountered this problem, in 2014 shareholders meeting site, a Seattle newspaper reporter asked a very pointed question, he said that Buffett's company not only Clayton sell the house, also offers consumer loans, so that some people should not have to borrow money to use leverage, these people may have a great impact, they may not play in the future, may be unemployed, the financial markets will have some impact. Buffett in the field this family serious media issue done promptly reply, also in 2015, in a letter to shareholders, with nearly one-tenth of this article to explain real estate investments and real estate finance and the details: "ClaytonHomes, the second largest US activities manufactured homes in 2015, the company sold 34,397 housing units ...... Clayton profit is key in its possession that $ 12.8 billion of mortgage loans ...... we issued the loan in 2015, the average was $ 59,942 per month on average only $ 552 principal and interest ...... in the past two years, the federal government and related organizations from 25 states often visited Clayton, 65 kinds of reasons to investigate a wide variety of its mortgage business. how the survey results? this time where we fined a total of $ 38,200, to $ 704,678 returned to the customer. " In the case of these data are fully disclosed, everyone on the bottom of this situation. Buffett also mentioned in the letter, this business is a great business because consumers bought a house will be doing a series of things, such as buying furniture. Buffett letter commending Mrs. B is the total selling furniture. Later bought a house will have to buy furniture, decoration, insurance, and so a range of services, so he said to buy a house is a start, consumers will do a lot of things, we will provide a lot of services with them. Execute a capital Mu Qing: Why is heavily loaded with Buffett second-hand house brokerage company? The above figure is all business investment in Buffett's Berkshire Hathaway HomeServices. I drew a slash, slash the following financial-related business, finance-related business not only mortgage loans, as well as insurance, property and a range of certification services. Residential services business is a business sense, but also relying on the service to get the return to work in the United States broker, and this is also a business brand barriers. We all know that Buffett is very conservative, and always say "snowball", residential services in this business just to meet his standards, has only just begun, the current Buffett play Barbie Games investment the company has made a second-hand housing transactions, with financial services, we must also will be more home-related services appear, such as selling furniture. China's housing turnover rate is very low commission rate is not high, the financial services do also not good. I believe that in China there are more than one opportunity to appear like Berkshire Hathaway HomeServices such good company.