Opinion | A Portrait Of A Young Renter | Vietcetera
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Apr 15, 2021

Opinion | A Portrait Of A Young Renter

After all, the sexiest thing you can offer homebuyers as a real estate financial solution is to improve their loan-to-value or reduce their cost of borrowing.

Opinion | A Portrait Of A Young Renter

Source: Shutterstock

Duc Luu is an Edtech and Proptech Entrepreneur, Angel Investor, and Keynote Speaker who founded and sold an Edtech startup which then went public on Nasdaq in 2017. In his spare time, he indulges in travel, basketball, poker, chess, and fashion, not necessarily in that order.

Fifteen years ago, I was kicked out of my 3-bedroom 2-bathroom apartment with a gorgeous 65-meter terrace overlooking the local Catholic church in a middle class neighborhood called Sai Ying Pun in Hong Kong. The church that owned the unit said something about the head monk returning and wanting the space. I have incredibly fond memories of that apartment where I had a revolving door of aspiring urbanites from around the world as roommates, throwing parties filled with pretty, smart, creative, young things that made the police show up on multiple occasions just to shut us down.

I worked from home during the day, taking jaunts for lunch at nearby cha chaan tengs or lo sui ngo stalls for roast pork or boiled duck and gizzards on rice for less than US$3. I took the bus around midnight to the hottest nightclub in town where I freelanced as the head creative director in charge of seasonal parties. Between the bus, the free drinks, and a taxi ride home, I spent only US$15 bucks on a night out. The gig gave me access to the city. Everywhere I went a friendly bartender would offer a joyous hug, a shot of whatever drink we wanted that night, and an offer to discover the dark recesses of my newly beloved Hong Kong.

I made less than $3,000 a month, my apartment cost me $2000 a month which I split three ways with my roommates of all nationalities. Like any other young urbanite, I had to hustle, aspiring actor by day, making ends meet by working as a high-end private tutor, and always doing one very important thing: saying yes to any offer/request/endeavor that came my way. This “say yes to everything” philosophy would launch my different careers, teach me tremendous confidence, and of course get me in a lot of fun/trouble along the way. Saying yes to everything in my twenties had me skydiving with fellow interns, climbing a live volcano, hobnobbing with Michael Jordan, Chris Evans, and Steven Chou. Many times, it had me way over my depth, like when I was asked to interview for the creative director job for a hot new salon/members club based on my events designing fame only to have the founder say to me during our interview “your reputation made me think you’re in your mid-30s, how old are you exactly?”

“22?” I meekly responded. Needless to say, I didn’t get the job. Only a couple weeks later I was offered to pitch to design the runway show for Giorgio Armani.

What does your dream home look like? | Source: Shutterstock

Saying yes forced me to network constantly, building a large base of friends, colleagues, acquaintances who would of course float like butterflies in an out of my life over the next two decades. We were all growing up, many of us newly minted grads, some made buckets of money in finance and spent most of it on fine dining and rounds of shots and bottle service, others were rich kids still trying to find themselves beyond their family wealth, others like me were trying to make a name and a dollar. Most of us, if not all of us, rented. It’s the big city after all, and who can purchase a high-rise apartment when you need that booze money?

We were hopers, seekers, and dreamers of owning that penthouse apartment, the wife/husband, two kids and a dog. Our salaries barely covered if not didn’t cover our expenses and every bank knew our math. And we didn’t care, we were living our best lives, pre-Instagram.

Until I got kicked out of my sweet apartment with the 65 square meter party terrace.

I went searching the city for a new home. My OCD tendencies had me visit 30-40 rental units, none of which fit my criteria. Only then did my buddy ask, “why don’t you buy a place?” This thought had never entered my mind before. I didn’t plan on living in Hong Kong forever but some seven years on, it was time to build some roots.

I calculated my cost of renting for 12 and 24 months and compared it to the cost of a deposit for a purchase size I could afford based on my monthly earnings. The math made sense to buy. I found a cute little apartment in the middle of downtown that I loved and was large enough for me to work from home and host my usual gatherings. But half a dozen bank interviews later, and I was still short. Not badly short, but still short. I was too self-conscious to borrow from friends. My parents were poor and hustling themselves to make ends meet in the US.

Finally, I relented and called my aunt who had raised me more than half my life after we left Vietnam as boat people. My second mom listened.

“I am trying to buy an apartment.”

“That’s fantastic! Congrats, son!”

“But I’m a little short on the deposit. If I can pay this amount in deposit, my monthlies will be X and I’ll be able to keep my rental costs below 25% of my monthly earnings.”

“Okay, how much do you need?”


“Oh wow.” She wasn’t that wealthy herself.

“BUT, I ran the numbers, I can have the money back to you within 6 months max. So really this is a short-term loan, not a 20-year home equity loan request. And please don’t charge me interest rate…”

I often wonder if I didn’t have that financial lifeline, and saved as much of my earnings as humanly possible over years to afford my first apartment, would I have been able to be where I am today? The banks back then held me at 60% LTV. They couldn’t track all my sources of income, so my borrowing power was further limited. They didn’t really trust an aspiring entrepreneur/artist with non-traditional sources of income. They couldn’t afford to.

Vietnam is now entering stage 2 of proptech. | Source: Shutterstock

Today, stage three of the proptech revolution has designed affordability options to fill that gap through consumer financing. Companies like Knock are giving hopers and seekers new non-traditional home financing tools to facilitate the next stage of their lives, supplanting or gaping the crevasse the banks aren’t willing to cross. After all, the sexiest thing you can offer any homebuyer as a real estate financial solution is to improve their loan-to-value or reduce their cost of borrowing. Vietnam is entering stage 2 of proptech. We’re still waiting for a viable financing solution, but there are some new proptech companies trying to fight the good fight.

The long pause was deafening. I was prepared to eat a lot more instant noodles.

She agreed! Sigh of relief!

A month later, I was a homeowner with a crazy expensive mortgage on my head, and a renewed desire to earn as much as possible. Personal debt overhang is an incredible motivator; I didn’t need any MBA to teach me that.

Six months later, I paid her back. Two years later, I would launch my new startup. Ten years later, I would ring the opening bell at Nasdaq.

We IPOed on my birthday, in New York f-ing City. The night ended at 4am, breaking into Gramercy Park and being sung Happy Birthday to before blowing out a red velvet cupcake that we bought at the corner Bodega.

I rent out that first apartment now. My rental yield is 12%.


Ping me at duc.luu@chicagobooth.edu if you have thoughts on this article or questions/ideas for future articles and I’ll give you my two cents for whatever digital or fiat cents are worth nowadays!