Hi all,
Hoping someone has had some experience with property over in the US, or if not, maybe there is an American out there that may know a few answers. I have been looking at investing in US property… mostly in Niagara and Buffalow at the moment, and had a fwe questions…
1) What is the highest yield I can expect? I have been looking at the internet for properties, and noticed some very cheap multi family homes. Do these rent for much? Is there much demand? If I bought a 2 unit dwelling for $10,000, how much rent could I expect? What about a 3 unit for $100,000?
2) How much is rental management?
3) I know it depends on alot, but an indication of how much landlords insuance would be?
4) So far I have been looking in the Niagara and Buffalow areas. Is there much rental demand in these areas?
5) I have noticed the prices include taxes. Are these a one off, or are they annual? Who pays them, the landlord or tennant?
6) What kind of closing costs can I expect?
Thanks,
Dan.
The most important thing is to make the most important thing, the most important thing.
Anon.
I have no idea about those questions (sorry). Have you tried emailing agents over there, I knwo it might not be the best information but they might be able to give you some numbers to work with. Also you could try and find an american property forum like this one. Sorry i cant be of more help.
censor me and bar your kids from the lessons I learned – makaveli
I`ll make him an offer he can`t refuse – Vito CorleoneHi dan
I have a brother in law who is in real estate in Atlantic City in New Jersey. A fair way from where your interests are but if he can help (and maybe make a dollar finding any deals) I am sure he wouldn’t mind.
Let me know and I will pass on his email.
Regards
markk
Happy Hunting
http://www.kentscollections.comHi Dan
I’m happy to share what i know about the US market, i’ve made two buying trips to the States and have a pretty good knowledge now of how it all works.
I will be home tomorrow so give me some time to recover from jet lag and i’ll gladly talk with you. My number is 0011 64 3 4180083 or email me at the email address below.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
just as a thought – the number of Aussie buyers pushed up the kiwi market and resulted in the earlier investors seeing a handsome capital gain. I couldn’t see that happening in the US, so you may have to be a bit more careful withyour numbers to ensure it really is CF+.
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
Dan
buy feb idition of property investment mag it talks about these areas , there are some excelent +cashflows but from reading the article I would spend the money go over there and work it out, dont just but over the phone could be a bad move
Cheers Rick[drummer]
i think dan has been on the somersoft forum for where quiggles has explained hs foray into the US prop markjet specifically buffalo and niagra seems a rather large co-incidence so no need to refer him there St Johns ambience, so why dont you ask quiggles ?? i myself am currently doing my own due dilignece on property in the US, i have a partner who is based over there but you need to do your homework, not just post it out to the forum, call some people on the ground and best if all if you are considering seriously buying some property then fly ther and get a feel for the place, i am heading to the US in mid march to do exactly that.
but be prepared, otherwise they may not take you seriously..
when the going gets weird the weird turn pro
Hey Dan,
Quiggles here. In order, if you bought a duplex for $10k you could expect zero rent. It’d either be a dump that needs about 30k in rehab to make it livable (and you can DIE in the weather up there) or it’s it a warzone and not even an ex-cop turned property manager would dare pick up the rent.
Rentals tend to be from 275 to 450 per month ($US), regardless of price. Traps are how many services you pay for, and these can be expensive (snow shovelling, trash removal etc).
Property managers range from about 8% to 12% plus the first month’s rent.
Insurance is about $700 per $40,000 property.
Niagara falls and Buffalo have about a 5 to 10 per xent vacancy rate. I’m gardually filling up my properties, but it’s taking time.
The taxes are the annual property taxes (school tax, city tax, county tax) and the landlord pays them.
Closoing costs vary – if you get finance over there, that attracts a big tax and an upfront brokerage fee. Then there’s legals, title insurance (critical) and disbursements. If you are paying a buyers agent, add that on top. At a guess, mortgage tax of about $2000, plus buyers agent cost plus my experience was about $1100 in legals including title insurance.
Other matters – you need to consider your investment structure, you need some understanding of what you are doing and you need to assemble a bit of a team. A lot of that can be done from over here by phone and so on, but it does help to go over there.
Hope this has been of some help. As I’ve said elsewhere, you should have ecperience in managing by remote control (like in another city) before traipsing off overseas.
Cheers, and I hope this helps.
Quiggles
were not worthy
were not worthy
were not worthyNice to see you resond
Cheers Rick[drummer]Hi Quiggles,
Thanks for your response.What sort of set up do you require for asset protection and purchasing over in USA.Thanks MartinMartin
Originally posted by Brisbane 04:Hi Quiggles,
Thanks for your response.What sort of set up do you require for asset protection and purchasing over in USA.Thanks MartinMartin
I go for an LLC set up as a partnership. Read Kiyosaki on the subject (and Keith Cunningham). Operates pretty much like a discretionary trust over here, but there are important differences.
General appeal – guys, please check the extensive thread I wrote on the somersoft forum (referenced earlier) and it will answer most of your questions. also a bit of colour in the feb API, but some extra detail as well.
Happy to answer others.
Hi all
guys just check that if you want to use an LLC in the states you will find it (nearly) impossible to get finance as a foreigner. Quiggles that may be why you can’t get finance ? I’ve had no problems sorting the finance delemna. This doers create less assett protection so you need to make sure that you/home has adaquate insurance.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Would it be possible to have the borrowings in your own name but ownership in a LLC. Thus keeping the financiers happy and also providing some asset protection. This would also allow greater flexibility when distributing income.
I’m just thinking aloud, I know nothing about US structures.
Rod.
There’s no real difficulty GETTING finance, the question is whether it’s worth it. Westan, I know you talked to me about experiences but I don’t believe you have shared what the upfront and ongoing costs of finance are. If you’ve have better offers than I have, let us all know about it!! Everyone will be better off.
Hi all
Hi Quiggles, actually i think there is real difficulty getting finance, i’ve spoken to lots of people and the story is always the same- people make promises that they can supply finance but then they can’t deliver. I’m sorry if i misunderstood your situation i thought you were in that catalogy, i’m getting confused as i’ve spoken to so many people about it over the past few months. I was really pleased that i found someone who could actually close on a mortgage for a foreigner as on my first trip to the States i couldn’t find one. It’s possible you have a better lead than me as i can get finance but only in my name.
As far as cost of finance goes it is very expensive as you have already outlined.
For those interested in how finance works in the States- When i started looking at investing in the States about mid last year i was hoping that i’d be able to cash in on the super low interest rates on offer in the states. Its possible to get loans at 5% fixed for 15 or 30 years (now that sounded good to me). However what i discoved in the US is everyone pays a different interest rate. It all comes down to an individuals credit score. Someone with a higher credit score would get money at a lower interest rate. Someone who had a less that perfect score would pay more for their money.
Now as an Aussie Citizen how do i fit in , well in the states everyones credit score is linked to there Social security number, the only way to get one is to be a US resident. As a foreigner even though i have an excellent credit history in Australia and New Zealand it is worth nothing in the US of A. So if i want finance i end up paying interest at a very high rate of 8%.Quiggles how did you go with finance did you find someone who will do better than 8% ?
If anyone who has actually closed on a mortgage with better than that i’d love to here.regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Yeah, i was offered 6.5% on 80% LVR. As I said taxes and fees were around $5k (I note Westan had managed to reduce this to $4k), which is a little too rich for my liking. I will consider it to build up a credit score. OTOH, if someone reading this wants to earn 8% on $500k, I’m willling to borrow it and invest it over there, with guarantees over here.
Hi Quggles
those are good rates (6.5%), do you know if the person who offered this to you has actually financed foreign loans ?
From my personal experience and those of people i’ve spoken to- in American everyone says “Yes” i can get you a mortgage , and then they run around to see if they really can , in nearly all situations they have failed to deliver. If yours can do 6.5% you have done well.
I must admitt that i’ve become sceptical of what a lot of Americans tell me thats why its so important to find a good team in the states.
regards westanI live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Originally posted by westan:Hi Quggles
those are good rates (6.5%), do you know if the person who offered this to you has actually financed foreign loans ?
From my personal experience and those of people i’ve spoken to- in American everyone says “Yes” i can get you a mortgage , and then they run around to see if they really can , in nearly all situations they have failed to deliver. If yours can do 6.5% you have done well.yes, this bloke actually had lent to foreigners before (mainly English investors) and yes, you’re right – overpromise and underdeliver seems to be the name of the game there. Their banking and finance is real dark ages stuff.
Hi All,
Thanks lots to Quiggles and Weston for the valuable info. Especially Quiggles SS posts, they were great!!
Couple more questions… Weston, have you been able to get any higher LVR that 80%? I know in the US there seems to be a million hidden costs, realistically, what cash on cash can you expect at the end of the day? And last of all, is anyone going over, doing all the hard work, and charging a service fee? I know a few people (Including Weston?) were doing it in NZ, does anyone know anyone that is doing it in the US (Weston?)
Cheers.
Dan.
The most important thing is to make the most important thing, the most important thing.
Anon.
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