Good morning everyone,
First of all, I just quickly wanted to introduce what I do – figured there’s no point hiding it
I run a firm that assists investors from all across the world who are looking to invest in the U.S. We do not work as brokers, but are sitting on a large inventory of homes across the country.
Right now, I am mainly interested in high cash flowing homes, therefore we favour markets such as Detroit, Birmingham (AL), parts of Ohio, Indiana etc. I know, these are high risk and not likely to see capital appreciation in the (near) future, but we primarily go after high income, in excess of 15% per annum.Anyway – enough about me!
What I want to know is what is attracting you at this time to invest in the U.S, and when/how did you start looking at it? I know that European buyers have been looking for many years, but it seems that Australian buyers only started last year….
Are you looking for capital appreciation, rental income, or both? Please share any ideas you have, as I believe a good discussion will benefit everybody that is on here:-) Also, is there anything that is currently putting you off investing (analysis paralysis, red tape, lack of financing) in that case, please share it:-)
From the amount of emails our firm received regarding this – i can you a lot of the deals fall through because of financing.
Without money – you can't really invest..Financing is possible and we have placed a few loans recently, but i have to admit, it's not easy financing US property for non-resident ( of US)- possible; but it's not as straight forward as a standard loan.
It either involves:
1. High entry cost- high application fee etc…( due to loan amount and nature)
2. Risk of using secuity or equity in Australian as 2nd mortgageRegards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Yes I hear you on that, matter of fact, I’ve had many brokers tell me they CAN do it, but in reality it doesn’t happen.
Unless the buyer has got some real assets that they’re willing to use as collateral, or a LARGE downpayment, the US banks just aren’t going to do it. Even for citizens/residents, it is really difficult, unless you fall under one of the categories that can get a first time loan.If people want to do it, your option 2 is better – use your Australian home to get a line of credit, even if does put your home at risk.
One of my reasons for investing in USA…is of course the parity…
it makes sense to me to invest money in cash flow positive (even if it is a small %) rather than buying a house in oz.
for the amount of a deposite needed here I could buy a fully reno'd and tennanted house in USA, not only that but i will own it and eventually have some equity.
it was one of the reasons i bought shares instead of oz property… easier to get into ie… less money required.
Nigel from this forum operates the only service I know of that provides finance as well. They do mit by the investor assuming an existing loan on the property. The reuslt is investors can get exposure to a $100K+ property for around $20K and the loans are generally pretty decent in terms of rate etc.
I'm not personally keen on investing in the US, but i have known Nigel for a long time and have several clients who have used his service, so I've seen the deals. They seem to stack up pretty well.
Regards
AlistairRight now there is a huge opportunity here in the US market. Distressed assets coupled with decline in US Dollar compared to the Aussie Dollar is a prime ingredient for success. But just because properties are cheap doesn’t mean they are a good deal. It really boils down to location.I am in Jackson,Mississippi.Here we have properties that I can pick up for 10k or less. But , the demographics are wrong in some of those areas for a sound investment. This is true for any market.There are some good areas here still, but you are going to pay more.
Also here in the US we have a high rental demand. Due to the high foreclosures, those same previous home owners are being absorbed by the rental market. Also it is harder to qualify for a mortgage now. That being the case, puts a bigger demand for rental housing. I am working with partners Jackson, Atlanta, and Florida. We have rental guarantees in place. Not really a risk to us, since tenant placement is very quick Yes the price points are higher with 10% to 14% ROI, but they are more stable for the investor.Fact is the market here is distressed for now, so this is the time to jump in.Take advantage of the acquisition costs now and profit when the market rebounds. I dont know when that will be. But history shows that it will reboundDemetrius Mathis
[email protected]Alistair,
I just wanted to ask (feel like I have to) did she (your buyer) just agree a deal with the seller to assume the mortgage payments, or did she actually sit down with the banks and get them to sign off on it?
Reason I am asking is there are thousands of people out there willing to let you assume their mortgages – they might owe 100K on a home that is "worth" (based on tax value, mortgage value, appraisal, whatever….) 250-300K, but the banks would never sign off on it, if they knew. This will be fine for years, except when your buyer wants to get title or anything else goes wrong.
There have been scams like this in the past, where a mortgage is assumed often by a foreign buyer and a fee of 20-30K is paid, which is usually just pocketed by the agent.
I'm not saying at all that this is what is going on, but I know Texas is a really harsh state in case of foreclosure, so most buyers would rather walk away and let someone assume the payments, wheter they do it legally or not, I can't tell you.We could also offer that service for people who wanted it, and for far less than 20,000 per transaction. IF we actually did that and put the amount on the HUD, I am not even sure the title companies would handle it…
I agree on the low cost being the main reason we're seeing a lot of business from overseas – for 35K you get a fully renovated property cash flowing from day one. As with everything though, you need to do some research.
There are plenty of firms out there offering non-status financing although usually you are over paying for the property, but it can be done, and is a 100% legitimate way.
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