Forum Replies Created
Congrads on wedding and honeymoon that would explain trip to florida
actually dec 16th was my 17th year anniversary
well if you wondering why I am emailing and posting at 225 am LOL Crossfit at 530 am
talk soon
We spoke, I think Nigel is doing the commercial thing.
Very nice guy we spoke via skype
And Nigel we were looking to meet if you came over to the USA . I am most likely going to take a trip12 to 14 days to Australia looking at late March or April got clients spread out there. So need to make sure I plan my trip accordingly
talk soon
Alex
True but most people here are not buying commercial and most are just starting out .
Advice is simple there for a reason take it or leave it …
Commercial is the way to go but not for the newbie.
Richard comment was in general speaking.
Lower end homes for me are priced here in charlotte from $95k to $160k yes appreciation factor
we got away from buying low end homes 50k And under not worth the headaches.
Even know this is an Australian forum I connected with the following countries off this site.,
London, Kuwait , Singapore , Malaysia , Hong Kong , Dubai , and Now South Africa and many cities in Australia
So I speak in general not just for Aussie investor
Talk soon
Ziv
Thanks for response I agree. I want to teach about Charlotte but also investing on a whole
Hope you had a great New years. Was pretty awesome I turned my phone and computer off from Christmas eve until this morning wow.
Well back to work talk soon
going to make a point to be here at least once a week.
Talk soon
Good Points
I want to do this with homes we purchase $250k to $2m I know this is a different market then most here speak about. Before the crash in 2007 I was dealing in $1.5m to $2,5 m dollar homes in charlotte. Alot of this inventory still out there that can be picked up cheap but no value in it today. As what you buy is what it is worth but looking downt he road is the potential.
Then the low end $75k and under this is only way that part of the market will buy again for long time.I do not see subprime coming back any time soon .
Talk soon
Ziv
I am with you. I feel that having the time to answer the questions and give the information is what separates people.
This is investing and people need to know us much as possible before doing anything.
That is why we have forums chat room , seminars , and other ways to get the information that is needed
Alex
Kyler whats up ? I spent numerous hrs on skype and emails with people asking questions. Some times more then I should but in the end.Information , seminars , radio , magazines are all ways we advertise. So I know there are alot of people that just ask questions. Guess it ups to us to read between the lines. At the same time I had people ask questions then come back a year later and do business with our company,
Talk soon
seems like you all getting hammered with that storm
Hi Alex
I must admit i totally agree with you about the strategy going forward and something i have been saying for years as the only way for international investors to get involved with the US market given the difficulties with property management.
I shut down our property management over 6 months ago as we were losing money every month.Its some thing I have been struggling with opening up again. So we been working on ways to over come that option.
I have been involved in Vendor Finance here in Australia for 15 years and built my property portfolio on the back of such income producing strategies.
With your model can you tell me who would find and assess the potential new purchaser ? My real estate partner has 20 years in the Mortgage side of things here in the USA. We still put renters in homes looking for DTI about 30% to 36 % . So we have a hand in the process.We are looking at the lower end homes which we own many. The old subprime market here in the USA we figure some of these are good potential clients for this. Our Mortgage lender in NC is looking at these clients at potential closing down the road. So we would still run them to see where they are at financially before we made any decision. Again this is not a total answer just one of many potential exit strategies.
Be interested to hear from you in this regards.
Cheers
Yours in Finance
Karina it has been a long time we did speak about year ago but as I recall good conversation .Hope all is well for you and I did see some of your homes your sourced in Atlanta ( nice )
You noted in your post “My first concern is that Americans in general do not move to rental areas” What is your definition of a rental area? Would a 70% owner occupant, 30% rental fall into this category? What percentages are we talking about where by your definition a property would be considered to be in a “rental area “ I would say any area that is 50 to 60 % rental and that continues to produce more rental homes with in that area .In Charlotte NC I call them vinyl villages.
With the “lease option” strategy in todays market, what do you feel would be the option exercise “buy price” (if we are talking in percentages). Say if the property was worth 70k today what would you be looking at offering it at as the option buy price in say 5 years?Lease option is a scam in the US and was never set for the buyer to buy . It was more for the investors to make down payment money and evict. Owner Financing is much different , as they is actual close and recorded at court house . Now TRUE LEASE OPTION is and can be done with 3 forms in NC and SC . Tenant is a renter, with rental agreement , then there is an option contract, followed by a purchase contract.
My concern with this strategy is that you are capping growth potential. Say you set the buy price at $100k in 5 years (worth 70k today) and in 5 years time the property is worth $150k. It is likely the occupant WILL exercise the option and buy the property at 100k. If on the other hand there has been no growth and the price is still 70k in 5 years time it is unlikely the occupant will exercise the option. You are 100 % correct but this is where it has to be a win win situation for every one involved. We want to set this up so they can buy and hopefully there will be some equity in for the back end buyer. Again this is a chance we are willing to take to turn more renters into home owners.
So the way I see it if you view that we are going to experience strong growth then the lease option is probably not a good idea if on the other hand you think we are not going to experience much growth then there could be an upside with immediate cashflow using this strategy. For international investors another consideration is the exchange rate and where it will be in 5 years time. If the option is exercised in 5 years and we are forced to "sell" what do we do with the US dollars if its not a favourable time to exchange the currency to Australian Dollars? Remember we are selling a 150k property at 100k, its not like we can buy another property valued at 150k with the 100k we have just received. This will increase cash flow now as taxes and insurance would be paid by the new home owner . I think there will continue to be homes available but not like the Atlanta prices when you got in. The markets are all seeing prices rise in the USA. I do not things this is true appreciation but more investor speculation driving the prices up. There is other opportunities like land w, we are buying 31 lot development buy price is $15k a lot . ( cant say more or I would be advertising LOL )
I personally feel we will see some good growth over 5 years on well selected properties purchased at the right price. I prefer the flexibility of being able to time the sale and price based on market conditions at that time. Who would be the buyer for you at the time is what worries me , again most USA buyers would not go to a rental area to buy. Not saying your houses are or would be in rental as you sourced and purchased nice homes. I am looking at about 30 to 40 % of mine and my real estate partners homes to do this with.
Alex, I would just like to add that my comments above are based on owner financing / option strategy's as we understand them to work in Australia, perhaps what you describe is a little different.
Yes owner finance is selling a home at set price in today market 125k and set interest rate say 6 % ( fictitious numbers ) I would set on 6 , 8 10 year note.The tenant now has pride in home ownership while also paying taxes and insurance. There is an actual close ( lawyer closing ) recorded at court house as a sale.( Simple version )
I am doing three things first setting comps in the area I just sold the home so now I have a comp to help furtue sales in area.I raised my cash flow no longer paying taxes , insurance. I created a home owner who other wise most likely be long term renter. Changing that area one house at a time .
Talk soon trying to finish off the the year on strong note while closing next week. We have completed 93 homes in NC and SC this year with 9 more in rehab currently and 4 more to close before year is out.
Sorry for any grammar or spelling as typing and spelling is my worst areas.
Nigel
I think one thing most miss understand is what is a seller and a reseller . Regardless where they are from. There will always be the flip side of the coin for both.
Take my company per say( seller ) , I am in the USA not say where at not to advertise. We use to larger resellers in California to reach a broader market. Now in international markets I have more focused on partners not the resellers. This is for long term thought process. So the resellers are selling the properties I buy and rehab.( with private capital ) Again this is some thing to think about.
For investors they should simple look and see who is really selling you the properties. Do they or have they actually been their to that market, are they willing to invest there own money in that market. The homes I would want to know the level of rehab and why , areas the property is located. I can show you a 2 story house that looks great on zillow , trulia , and show well in video and pictures. The location could be the worst part of my city. This is why taking a trip to the market you decide to purchase in is huge. Then deciding to work direct or go with a solid reseller. I feel there are advantages for both when deciding to invest in real estate.
Stole this next part from you.
Property Taxes
Maintenance
Property Management fees
Insurance
Accountant costs including structure and yearly returns which is great I do not see repairs , vacancy these are two more main factors that will kill a return.
It is important to take all of these things into consideration
Again bare with me it is early and tired
Thanks
Just dealing with a client now who is using a super fund to purchase .Correct me if I am wrong the Super fund can send money to LLC which is set up in states then the LLC can purchase the properties.
We are currently dealing with a Client who is using a super fund so new to us. This clients has over 20 homes in the USA purchased in different markets.
So I would like to see what every one else is saying on this ( especially you finance guys )
Thanks
Ziv
How are you? No worries I do believe in what my company does and others in the USA. At the same time I met some wonderful Australian people as well. Actually this forum has helped my company reach and open many international markets. Strong contacts and new partners from those areas.
So Not complaining there is some great advice given here . From all aspects buyers , sellers , resellers. More of less I just do not like to see the USA name bashed when people are people where every you go.
Spruikers USA and Australian and others places are all alike. I call them slick sales men ( or women ) here in the USA.
Just rambling now but this title should sale SPRUIKERS IN General but than again just my two cents.
Find me on skype some time ..
Sorry for spelling mistakes early and tired
Some how I Take offense when I see US
in a negative terms
Todd pick a few markets in the USA, then take the time to fly over and check them out. I would make sure I visit at least 3 markets. I would find some fellow Australians who have invested in each market. I would try to find both USA and Australian teams dealing in each market. When dealing direct your cost will be better.
Then the Choice would come down to either paying a reseller or going directly with a team located in each market.
First make sure you have some goals short term , and Long term of what you are trying to accomplish. This forum is great place to start.
Just my two cents
How are you ?
First time I been back here in a bit . Client in from New Zealand today .
Nigel I am jumping in with both feet for commercial deals near me in Charlotte.
WI is correct most people here commercial is not for them. I think after buying and selling houses for years commercial is the way to go.
We are working on large unfinished developments. Slowly looking at setting up to build when time is right.
talk soon
Alex
New HOMES not yet but we are scooping up as much land as possible near me.Working on 31 lots and 50 acres across the road. Another smaller development 16 lots left . Retail sales picked up here so we dabbling both with Turn Key and retail.
My desire is with development so that's where I want to be. Flips are and always be good money. Nigel yes Commercial is where we are heading our selves but hard area to break into. Hedge funds LOL wall street found a way back in.
Yes keeping the C properties the ones my partner sold have become headaches and still losing money us and clients. Those are best to be kept by local guys who know the market.
go to vegas play black jack ? 150k and drink and enjoy vegas for a few weeks other $150k not sure ..LOL
Love these post the problem is
Zig
For example when some one comes to us as a client. We need to know short term or long term goals are . Then we see what they are trying to accomplish . Cash does not mean anything with out a plan of attack for the client and the person building a portfolio.
Just my two cents
Alex
Hey All
Well Guess I can chime in Vince and His group sold one of our deals and Working with Both him and Simon great guys to work with .
They really looked out for there clients and made sure the deal was solid. Our prices have climbed a bit for them so not currently doing any deals with them.
We have turned our homes into a retail standard across the board so prices have gone up. You all watch and mark my words in next 6 months the standard Rehab in the USA will be similar if not the same in all the major investment markets.
Alex
