In my opinion Zillow is nice to gather data get a general feel of value and rental price… To use zillow as your value vehicle like its true market value will lead to one either missing a great deal or paying too much as the data just is not very accurate.. One really needs to either get a few BPO's from local RE brokers or 3rd party apprasials to really settle on value.
I personally never use zillow I will always go to the Multiple listing service. I like Zillow and still use it .When you work in a certain area you should know the numbers. Zillow is not super accurate but can give you a rough estimate.  Trulia is very similar site.

That said here is an example of 3 transactions I just did in Henry County GA, the play ground we work in in the Atlanta market by and large.

Some of you may know what a 1031 tax deffered exhange is vis a vi the US tax code this allows sellers of non owner occuppied properties to roll up thier equity and replace one asset for another without paying a capital gain tax at the time of transfer.. Many investors have 1031 ed from one property to another for many years often time starting with a little 4 plex in La and ending up own 200 units in Oaklahoma city that kind of thing.

NOw there is also the 1033 exchange… This is an exhcange that is allowed when your property that you have was purchased in a 1031 and now you have an involentary sale of it.  Involentary you ask. Its also called a reverse exchange as well.

1. condemnation   gov decides to put a freeway through your poperty and your forced to sell.

2. Invested with Large company as a tenant in common and the operator went Bankrupt like a REIT and other larger offerings on usually large commercial projects and office space… So alot of that going on in the states right now right.

So you have folks that end up getting maybe 50 cents on the dollar if they are lucky.. And since they 1031 into the property they have recapture and tax due. with this tax it can just wipe out the rest of their cash.

In comes the 1033.. These investors can roll into another property through the 1033.   They have to transfer whatever cash is avaliable however they also have to take on the same pro rata amount of 3rd party debt as when they bought the investment they are transfering out of.

So now you have an investor needing to buy a property and has some cash but also needs debt.  We are in the worse environment in for ever for commercial loans. Many of these investors cannot qualify for a new loan.

here is what we offer and have done and this will lead back to why Zillow can be a red herring in valuing property.

We take that same investor and we provide both things that they need… Property to replace cash down and WE CARRY THE DEBT with no credit check or qualfying.

Example.

House:

One of our normal Henry county propertys all in super prop… 60k… rents for 1000…. You all know about those.

We sell it to the 1033 investor for 120k…. 60k down we take back a 60k first deed of trust or Mortgage as you know them.
No payments interests accrued at the minimum statory rate as to not created imputed interest for ourselves.

We bring it into the Truewholeshouses.com model which is the investor just gets their 9% cash on cash and have no down side… they are the bank never miss a payment never have a cash call for maintenance etc.

OK so know your wonder about this house selling for 120k……

We when we sell this house lets say it sells for 100k in 5 years.  We can legally take a short sale just like banks are doing today remember we are the Mortgage holder and in this case our client owns the house just like any other investor buying houses. So we just structure this exactly like our TWH model which is 9% cash on cash and 50% equity share.

We do a triple net lease with the new owner so they have no costs during ownership. so they have made thier 9% all along…

We take a short payoff instead of 60k… We take our half of the 40k profit which is 20k and the investor gets 20k profit. So we forgave 40k of our deed of trust which just like any bank we have the right to do…IE short sale selling for less than the mortgage or debt on the property.

The investor gets out of a jam on their 1033 and actually makes a huge net return 9%  which is huge in the US by the by and really about the best you will do over time when you check your numbers over a 5 year span…. And they make a nice equity kicker.

So moral of this story is

1. Zillow and all the other sites are going to show this house as a 120k comp. and I have done 3 in January like this and will probably do another 30 or 40 this year for this one particular investment class thats rolling out of a multi billion dollar bankruptcy and needs to 1033 to save their money… Largest bankruptcy in Oregon History company called Sunwest.

so there you have it and there are many others that drop sales on to the public records for all different purchase prices… Is this arms length HECK NO… Is this a custom plan created by a team of experinced Real Estate operators HECK YES> and approved by the buyer and sellers accountants an attorneys and the paper work would kill a tree….

So there you have it just one example why zillow and other sites should just be a base line and not taken like Gospel.

Then as Speedy Gonzales mentioned you have non disclosure states. And in those states its truely Caveot Emptar…

JLH

One last thing this is a strategy we used in CA for values as well… Values in CA are picked up if they are not on MLS for the transfer tax stamp duty… One could buy more stamps if they liked too,,, no law about buying enough stamps to show a value far over what you actually paid for it.  big developers did this all the time.

[/quote]Nothing else to say since I like Jays system and incorporating that into our system in Charlotte NC

Alex

Obviously as they show no inside pics, the place has been trashed by a tennant / owner before repo or eviction. This is the type of investing that should be done by local guys only. They know the market and the risk associated with this.

My question is, how cheap is too cheap? there is only a finite amount of $ to spend fixing it up again no matter what has been done to it. It not the numbers you buy and fix for.It is the numbers to maintain and hold the property that should be a concern to you. Those are the hidden expenses that the international clients need to focus on. For example every one that is buying in Atlanta and wanting 20 % returns and hoping for appreciation. They are forgetting that each house will need $10 to $15k to bring to a retail sales price down the road. As well no American will buy a home to live in a rental area. So keep that ion mind for future reselling of the properties.

So, for those in the know… what sort of costs might be involved.. yes there are variables but as a worst case scenario if everything except the frame needed replacing what kinda costs would one be looking at hypothetically ?  $15,000 – $20,000 ?
For me to replace plumbing $2500 , electric $2500  Ac unit average $3500 clean sewer lines ( thanks jay we do this now on all older homes ) Lucky if we get $500 but some times up to $1500. Now the cosmetics I am not overly concerned with as much.

(which would still leave it over $2,000 cheaper than the same kinda house in it's area with a brand new fit-out for good rental returns)
 
place is 4 bedroom 2 bathroom but states it has 2 seperate water and gas meters.. might be i could rent out two 2 bedroom units after it's all done up.  If it is a duplex for sure but again take into consideration about lower end and all the comes along with them. I sell these same deals fixed up ( opps cant say that it would be as the moderator of this site says advertising )

<moderator: there is no problem writing about your experiences to add to the conversations and assist other users>

what's the worst case / bottom line scenario ? it depends on what your exit strategy
 is and what you want to accomplish..

Feel free to send me a private message with a link to your website or program that you offer.  I'd like to know your qualifying and underwriting criteria.  How many points upfront, interest rate, amortizations, etc.  Thanks..  Looking forward to seeing it

Michael,

I will try to answer without be outed as a spruieker. Thats the hard part teaching , and selling go hand and hand. Teaching about an opportunity while selling the investment.

There are no other cost period other than the investment itself. No need for an LLC or ITIN. Although if you have one set up in the states the LLC can purchase the investment as well. This is the beauty of the system.

Yes the 9% is NET no other cost… Return is always the same 9% cash on Cash regardless of the rental performance or mainetenance issues. We handle all of that… Our program is for the true hands off investor that wants predictable cash flow. Rental housing of course is anything but predictable cash flow. Our US clients that buy in their IRA's are the same way. They usually only have a certain amount in the IRA and do not have further funds for cash calls,,,, so they really like that aspect of our program,,, One time investment, Never spend another dime on the property never worry about management or tenants, just recieve your check each and every month on the 15Th…This is true because we are going to be one of Jays team in Charlotte and I can tell you compared to most. he is very picky on what he accepts from us. Yes Jay and I basically met through this forum and we both are in the USA. However he did lend us money years ago with the buy and flips to USA investors.

How we do this is we partner on the equity side.. And there is not a lot of sales load added into the purchase price… So when you have an asset that your all in for 40k say thats renting at 850 a month there is adequate cash flow to put aggressive reserves away and pay the 9% to the investor and have a very safe return… We make a hundred or so on the cash flow per month as well so thats whats in it for us. Either way is a great option buy and hold or Jay system. At the end of the day it is companies like mine that will supply the product. So we do offer this program but this is strictly through Jay's company.

but we do not hire PM's.  our management team are all equity owners It makes a huge difference in how our property is selected and how its treated long term…. Not only do our partners that manage the asset not get paid if there is an issue with tenants rehab excetra it comes OUT OF THEIR POCKECT if there is a problem… Now thats what I call accountability and everyone on the team working in the same direction for the asset. The protection this allows the investor is simply the bi product of having a great team all financinally involved in the asset. At the end of the day our deals depending on where the market settles in 5 to 7 years will return with the trailing equity kicker. 15% plus NET NET per year.  All for a investment you never have to work at or worry about. Yes our team gets 25 % of the equity so we need to make sure that we take care of the property since this is long term.

Can you do better on your own, for certain some will, but they will work very hard at it… thats for certain, And I am certain many will not come close to the return we will give them as there will be things out of their control that negativly affect their investment. If you add in all the time and effort and travel coming to the states, Unless Lithonia, Georgia is really were you want to spend your vacation looking at a rental I would say travel cost are part of the total investment and must be included to establish NET returns. I will agree and disagree this is more for the hands off investor or ones who have had negative experience with rental properties. Nothing is 100 % guaranteed but this is a safer bet.

The Due diligence on our product is really more focused on us than on the Asset. The asset is important of course, however we are the ones executing it. So to that end in our typical DD package we have.

1. Deep background and  Criminal Back ground check on my self the owner.
2. Copies of all my Real Estate Licenses that show I am in good standing in 3 states and licensed since 1977.
3. copies of my State of Oregon Mortgage Banking License and my Federal NMLS license.
4. Letters of Banking stating our average daily balances in our company that average over 7 figures. And that we have current credit facility's of 7 figures on top of our liquidity.
5. And for larger investors I will provide a personal credit report on myself… showing fico 750 plus never a late and over 4 million in personal mortgages. 

Like Alex on this site I am wholly invested in all that I do we do not just flip property, We own every single one of them.. Yes he is backing up what he says 100 % .I flew out to check out his operation. Then Jay came out here and spent a few days with my team .

Then on top of that we give a  90 day no questions asked money back guarantee… If your not satisfied with your TWH investment we will resell or buy back with in 30 days of written notice from our investor. You keep the 9% cash flow you made up until the date I buy the Note back..  Because our investor is the BANK in these transactions and HOLD s first Mortgage over the property there is no need for a rental guarantee or maintenance guarantee like some companys offer for the first year or so.  We are there for the life of the investment…. It is hard to sell a property in today's market after it went from wholesaler to investor. With selling the notes we are in the property much less. Which is a distinct advantage of liquidation if needed.

I will tell you this investment model is very very popular in the states, our investors here tend to be a little more hands off than the Aussies from what I can tell.. And all of our investors to date already own rentals and are just really burned out on managing their managers and the unpredictibility… Watch our 9 minute video and listen to some of our investors… Like I said they have all been there done that with owning rentals.. I have a local couple here in town that has IRA if $180k they purchased 2 rentals and tried to do it by them selves.  Now f they would have let us make it turn key. Things would have worked out better. Now that they have a bad taste from real estate .  Jays program is a no brainer for them

I kind of liken our product to a mutual fund as oppossed ( Jay did I find a spelling mistake ) LOL  to you picking your own stock…

As to your question on liquidity, you are free to sell your position at anytime, if you just sell your note position the equity goes to the new buyer, the 9% stays with you…..

And in practice if anyone really needs out we will just buy the note back and resell to someone else….For instance if there is a family emergency or something and someone needs to get liquidity,,,, All of our investors are long term I have not had any of the 80 or so ask to exit…In the US this need for cash is usually 2 things,,, they need the money to help their kids buy a house, or they need the money to bail out their kid and hire a lawyer, and I am not kidding,,, Having had a very large investor portfolio over the years 250 investors and 35 million under management, these were the 2 major items when my investors needed out.

One last thing Liability:

In our program since you hold the 1st priority mortgage over the home, there is no liablity that is typical with owning a rental, that all falls to us we own the asset. And as the owners we have the proper insurances in place. Our investor is the Loss payee on the insurance policy in the event of a fire or tornado flattens the home. The investor gets the check straight from the insurance company…. Just like if you have a loan on your personal home.. The bank is insured and is a priority creditor.

Well thats about it.

[email protected]

Looks like if I am going to continue with AU investors I need to get to the busy professional that does not have time on their hands to search all these things out and that task's their accountant to find them suitable investments.

Yes I am advertising my Charlotte deals not really just saying they will be available through jays program after they have met his criteria.  So hope this helps.

Alex

all the best

JLH

I have been browsing through the overseas forums over the last couple of days, and getting very intrested from what ive read.
Although I need a point in the right direction regarding purchasing property in America.
Basically where do I start? Who do I need to speak to to get more information? 
I look forward to hearing some advice, thanks in advance.
Nick