Hi everyone [
]Good to find such an interesting and highly interactive site, I’ve just spent the better part of 2 hours pouring through all the previous forum messages [^]
I understand everyone here is being proactive in their wealth creation through real estate. Given that we all want/prefer positive cashflow from our rental properties it can be difficult to purchase desired properties, or at least properties in a desired location.
I am currently working with a partner on ways to increase cashflow (mainly through tailoring properties to students and renting them per room), but thinking right out of square – has anyone looked into using US finance?
The current interest rates and terms are much more favourable (as low as 2% variable and 4% fixed for 30 years!). Can anyone offer any suggestions on how to purchase Australian property using foriegn lenders.
Can it be done? I believe there must be a way, whether it be through a money partner in the US, having the money lent to a company rather than individual, or through the use of something like a Nevada Corporation. After all, if I were a US bank and someone came to me from Australia with a sound investment that put my money at very little risk I’d be jumping at it!
I would love to hear any stories, warnings, facts or advice on this issue. Also any money exchange details/costs/risks that could be associated if it is possible.
Imagine the possibilities if you could purchase all of your properties on a 4% fixed interest loan for 30 years!!
Thanks everyone [
]Hi Leigh.
The difficult part may be proving to the US lenders that you have a secure investment.
Another thought: what about currency fluctuations?
The A$ is now around US59c. What happens if it goes back to 49c, as happened not so long ago.
How many Aussie farmers were burned taking out foreign loans following the advice of their bank?Terry
FinanceEdited by – [email protected] on 11/02/2003 08:49:22 AM
i agree that you have to manage forex fluctuations, however, will be interested in this idea. If you were talking big dollars how about setting up a REIT (US Real Estate Investment Trust)?
PS tell me more about the student accomodation strategy?
$ fluctuations seem to be the main issue, however if the $ fluctuates by even 20% wouldn’t you still be better off if you have an interest rate 50% lower? Or if you obtained the finance when the AU$ was at 49c wouldn’t that hedge your risk considerably?
Student Accomodation
At the moment we are still finalising our strategy, but it looks promising. Here’s how it works.
a) Purchase 3-5 bedroom properties within close proximity to public transport into the city.
b) Fully furnish the property with student needs in mind, ie: desk, bed, tv in each bedroom etc. (can do this for $10,000)
c) add high speed internet, phone & tv connections to each bedroom
d) rent the properties per roomThe goal is to increase cashflow by renting the properties per room instead of per house. This is done by making each room independent and providing the facilities necessary to students.
Yes, you do have to pay all outgoings (internet, gas, water, electricty) but this is factored into the rent. Basically a property with a 4% return can be made positive cashflow if done right.
two things in response.
Yes, this student rental thing works…..so long as you are ready to take them at the time Uni is starting….we missed the boat last year and had to take a “group”. Also, given Austudy (or whatever it is called now !), there is an upper limit to what they can afford.
re American finance. yes, you can borrow from the US but you need a US source of income, eg rent from a US property before you can borrow….I don’t know much about it But I heard Rick Otton mention it on a Video I got with the wrap pack. You can buy the video seperately so it may be worth a look.
Savann
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