I’ve said before that everything is PUA.
Why? Because the core of PUA is “control”. In times of peace, I can’t control you with a gun to your head, but I have 10,000 ways to control you, from consumerism. Consumer loans to long term leases to motor homes.
But before I talk about PUA, I would like to show you a magical phenomenon that happened just in the last few days.
- Beijing’s first snowfall and the young people who were evicted from their homes on a snowy day, which was a hot topic.
A few days ago, the first snow in Beijing turned Beijing into Beiping overnight, and we were once again amazed by the snow in Beijing, especially at the Forbidden City, which was brushed away by our friends.
So that day, the Beijing you saw was probably like this: very beautiful, picturesque.
But there was another group of people that night, beyond the snow-screening messages, who had a very different experience. They were the young people who had been forcibly evicted by their landlord because they had not paid their rent on time.
While you were enjoying the snow, they were probably being evicted into the snow.
Later, I saw a number of people writing about that night on Twitter and Douban.
The night it snowed in Beijing, my landlord threw me out on the street with my luggage…
Beijing’s heavy snowfall was a hot topic, but the people who were driven out in the snow had no way to get there…
Some of them may have just graduated and decided to stay in Beijing to make a go of it, just in case, but 2020 is really not a friendly place.
But what they didn’t expect was to be hammered again at the end of the year by the rental problem, which was inexplicable.
The landlord told them, “I haven’t received any rent, so you can’t rent anymore.
The bank then tells them that even though you didn’t continue to rent the apartment, you still have to pay the monthly mortgage.
The job may not be stable yet, no place to live, and somehow tens of thousands of dollars in debt, if staying in Beijing is for the sake of the dream, but in this case, before the wings are spread, the neck is caught first.
This is the current situation of the young people in the eggshell PUA.
Even if this is considered a social beating, the beating is too fierce, not educating people as human beings at all, but educating them as if they were reformed criminals, much more fierce than the social beating I received when I left school.
Although I also live in a basement, I pay rent every month, so no one usually evicts you.
- Why is the long lease apartment model inevitably a thunderstorm?
Although the statement on 11.16 made it clear that Eggshells is not bankrupt and has not run away, and that people should not believe in rumors, it cannot stop the flood of information about tenants’ rights from all directions.
In Beijing, officials have announced the establishment of a task force. You can probably imagine how serious the situation is.
In Guangzhou, Nando’s video revealed that the Guangzhou branch of “Hundred Fixes”, the maintenance company of Guangzhou Eggshells Apartments, was already empty, and the renovation supplier, unable to collect the money owed to them, demolished the tenant’s door directly.
Many of the financial disputes involved in Eggshells Apartments finally hit both the tenants and the landlords.
In Shenzhen, large numbers of people lined up to defend their rights, and there was a huge traffic jam.
The most serious problem, of course, is that the eggshells have no money left to pay their own employees, so how can they afford to pay their landlords? Or pay the tenant.
All the conflict is shifted to the landlord, the tenant, and the third-party financial institution.
And any of them, theoretically speaking, seems to be the profit loser.
Long lease apartment thunderstorms are not uncommon, since last year, Hangzhou Lejia apartment, Dingjia apartment, Shanghai Fubin apartment, small home in Suzhou, Zhejiang and Yugawa region, have been a series of thunderstorms, and blow up one by one.
According to statistics, in the first half of the year, there are at least 60 long term rental apartments running away, and only in July and August the thunderstorm of long term rental apartments is up to more than 20.
It’s just that they’re not very big, not spread out in the national market, just playing in a certain city or region. But eggshells are different, running around, the plate spread very large, the first and second-tier cities across the country are spread out, and now the problem occurs, full bloom, splash fire everywhere.
Why is the model of long-term rental apartments bound to thunderstorm? Let me explain briefly and try to write as plainly as possible.
First of all, to be clear, the game of long term rental apartments is not an ordinary game of physical services at all, but a game of finance. It’s just a PUA scenario for you.
When you’re on the hook, they can go to the financial markets and whoring around with all kinds of capital.
It’s not that complicated.
First, physical services for rent.
It’s simple: the landlord rents the house to the tenant, the tenant pays a security deposit, and then pays the rent every month. This is the most basic model, the simplest rules of the game.
Second, the entry-level financial playbook.
The landlord rents the apartment to a third party, the apartment operating company, who renovates it and rents it to you, but tells you that if you pay six months’ rent in one lump sum, you’ll get a special discount on the rent.
You look at the discounted rate, are tempted, and give a lump sum for six months.
Under the rules of the game, the rent doesn’t really make money; what does make money is that the apartment operator gets all your rent six months in advance, while they pay the landlord rent one month at a time.
This creates a cash flow of at least six months.
Take this money and then expand your housing stock and tenants, and as long as you have a steady stream of tenants coming in and a year’s worth of rent coming in six months in advance, the game will continue to play out.
Third, the higher-order financial playbook.
What about the many people who may not have the strength to give six months at once?
The ultimate move is the rental loan, and then you see how long term rental apartments are leveraged like ants and flowers.
The third-party apartment operators use higher prices to ring up properties from the rental market, while on the other hand, they use lower prices to attract younger tenants.
Those who have rented can feel that what long term rental apartments are good at is decorating old, small, shabby houses into large single rooms in the style of Netflix, at low prices, sometimes so low that young people are easily tempted by the pictures and often find them cost-effective.
At this time, the apartment operating company tells the tenant that you can sign a rental loan, which is also a monthly loan repayment, which is equivalent to paying rent, and we give you a 20% discount.
Under such favorable conditions, individuals will be tempted.
The tenant and the financial institution sign a rent loan, which is usually one or two years, and the money is allocated by the financial institution to the apartment company, which still pays the landlord’s rent every month, which means that the tenant can get the full rent at least one year or even two years in advance.
That’s the real windfall business, the cash flow.
Do you think the apartment company will just let the money sit quietly in the account and then give it to the landlord every month when the time comes? Naive, so much money, anyway, not anxious to settle all at once, what can’t we do? It is entirely possible to continue to expand the market.
- Ashes of the financial play
If you remember, in the article about Ant Group, I mentioned a financial concept that is actually quite common, ABS, Asset Securitization.
The so-called ABS, we can simply understand it as.
Based on the future cash flows that will be generated from the assets that you own, you can finance the debt.
For example, if I lend you $100,000, and you have to repay me $10,000 every month for a total of 10 months, using the ABS playbook, I can use the $100,000 of debt to go to the capital market to finance another $100,000 back.
When you see it here, is the rent that you need to pay back every month a steady cash flow? Is your monthly rental loan repayment a steady cash flow?
You sign a rental loan, the loan earns you a sum of money, using ABS to finance the debt against you, but also can be highly leveraged to leverage a large sum of money, which is astronomical, this is the right way to make money, rent and so on are small sums of money, and as long as the game is not played badly, you can continue the cycle.
Under what circumstances will the game play out badly?
When there are no new tenants being set up, there is no cash flow, no loan, and nothing. Because the plate is so big, the overhead is huge, with monthly payments to the landlord for rent, and payments to renovation suppliers, and labor and all the costs.
If the ability to manage the money is not good enough, there will be a thunderstorm.
Moreover, many long-term rental apartments do not use their own funds to lend at all, and all of them use money from third-party financial institutions, so once a thunderstorm occurs, the risk will be borne by society.
- Who is legitimate?
Who is justified in this game?
Everyone seems to be legit, except the apartment operator.
As a tenant: signed up for a rental mortgage, still paying it on time every month, no defaults, no arrears, why am I being kicked out of my apartment?
As a landlord: Has the rent for an apartment gone unpaid for months? I didn’t receive any money, so why should I rent my house to tenants for free?
As a third-party financial institution (bank): we have allocated all the money to the apartment operating company and it is clearly stated in the rental loan signed with the tenant. Why can you not repay the loan? Why can’t I get credit for you if you don’t pay the loan?
Apartment operating company: I’m out of money, you guys do what you want.
You see, all the chains were started with the condominium side as the core, and now the core has exploded and the chain is broken.
Who can stay out of it? No one, all of them, are the losers.
So who is the poorest of the poor? Tenants are the poorest of the poor.
The landlord can evict the tenant from the room, and failing to do so can be a way to make your stay unpleasant.
A third-party financial institution can require the tenant to continue to make payments, and if they can’t, they can put you on credit. We all know what being on credit means, the biggest impact is that it will be very difficult for you to get a home loan thereafter, and it will affect the largest investment you may ever make in your life.
The tenant has no means of resistance, no way out.
How do you fight back when you’re evicted? It’s someone else’s house, and I’m determined to let you go, so are you going to leave? If you call the police and don’t leave, saying that your contract hasn’t expired, the landlord has a million ways to make you stay. And many of the tenants are young, they have no qualifications, no background, no social experience, they’re out of hand.
But that’s not all, because financial institutions will require you to keep paying your mortgage or they’ll put you on credit.
If it were me, I’d be devastated. I’ve already been evicted, so why should I keep paying my mortgage? Keep paying rent? But if I don’t repay the loan, my future credit will be greatly affected. Credit is very important.
Housing and credit, both of which are the Achilles’ heels of young people, are in the hands of others.
- Many people are barely scraping by.
In an article the other day, I wrote about what the average salary of the post-90s generation is. Most of them are in the 3K-8K range, which is not high.
Do you think they really live a sophisticated life just because they’re happy to give their family the good news and not the bad? Those high levels are actually just an illusion created by social media platforms.
Still in the article a few days ago, I wrote that the average salary in the private sector in Shenzhen is around 6K.
Young people are a bit higher, I’d say 9K, which is very high.
Even with 9K, if you rent a decent apartment, plus utilities, 3K is gone, and the daily food expenses are at least 60 to 70, plus transportation costs, you need to be frugal, and your basic expenses for a month are at least 5000.
And the premise of such a life is.
You don’t dare get sick, you can’t participate in any recreational activities, you can’t go out to dinners every now and then, let alone fall in love, how expensive it is, oh, and you can’t get yourself a new dress, a gift for your parents, brothers and sisters, or anything else.
You can’t get yourself a new dress, a gift for your parents and siblings, or any of those things, and you’re at the bottom of your paycheck.
I still remember when I graduated, the first year I was able to earn my own money, that year my dad’s birthday, I bought him a thousand smartphone on impulse, and for 5 months after that, I was paying back my co-workers.
My dad asked me how my job was, and I said it was fine, don’t worry.
But I knew that I was just barely scraping by. The word “barely” is particularly appropriate in this context, as it means that even if you are happy, it’s because you’re making the best of a bad situation.
And that’s fine, because it’s all about the choices you make, after all.
But if you rent an eggshell apartment, sign a rental loan, and then, like many people today, get evicted by your landlord and have to rent another apartment, but then have to keep paying the mortgage on the last one every month, that means you have to rent two apartments every month after that.
This means that in Shenzhen, your basic expenses may skyrocket to seven or eight thousand a month.
But a lot of people don’t make 7,000 or 8,000.
Some people are really vulnerable, they’re just scraping by, their financial security line is so tight that it can break at any time, and they can’t afford to break it.
But there’s always someone watching them, tossing them around.
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As you can see, Beijing has even set up a special working group, which, in the words of the media, has created a risk that has affected the stability of the basic social order.
Hopefully, all of you who have been affected by the PUA will be able to wait for a proper outcome.
I would also like to remind new workers who are about to enter the game that there are some games you can’t understand, but you can be disabled by them.
The best way to rent an apartment is to rent directly from the landlord, and pay the rent directly to the landlord every month, don’t play any rental loans, and don’t easily take out loans, including consumer loans.
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