Forum Replies Created
Cheeves whats up ? How are you ? Been In Canada quite a bit lately set up both Sanfrancisco and Toronto as new areas.
How are things up your way and send me the info to get add in Ny post
Lets touch base this week
Alex
Yes been away but been busy and now Dec is only month I do not Travel so will be around here for a bit
Hey All been gone for a bit wow busy season about over for us I do not travel in Dec so look forward to being back and chatting
Kyler been chatting with Engelo I believe he is with you in Kansas City
Zig How have you been ?
Nigel Hope all is well
Nick I will answer you pm in a bit
lets get back to question at hand. Lately our company is been selling retail to USA buyers, but we are 90 % flippers buying , fixing , selling . Every investment is risky it is an investment . The key is what is long term goal , I lost money clients have lost money. Same side I made great money and clients made great money.
Lots of Great companies both in USA and Australia just sold 9 deals to Australian clients from a reseller group from USA. Funny they are selling my homes to Aussies and I been here in forum for long time. Guess my name is not big enough ( LOL )
The flip side is basically what all USA companies are doing we call it turnkey. I recently raised capital from this group from a forum member out of Queensland. Now he is just getting return on capital so not really flipping but lending .
If I was to get involved in Flipping in USA I would Visit 3 different cities and meet 3 different groups. Word of mouth spreads quick on who can do what they say. Then I would look at the returns on worst case scenario to see what would make sense.
Being in Charlotte NC I can speak for this market and this market only but what is happening here is similar to most USA investment markets.
Hope this helps and Glad to be back sorry been away but happy to not be traveling any more the rest of the year…
Alex
WI
How are you? Huge Change in USA of late in all markets . The demand is up from USA buyer.Loans are moving for investors – demand pushing price up in all markets. I am back to bidding ( this week will hit 500 ) that was my goal. Trying to buy everything we can scoop up that is 3 -2 and 4 -2 . With Atlanta , Phoenix leveling off with inventory and, prices going up. The USA buyer is searching for other markets.
The USA buyer who understand the USA rental market bit better the an international buyer. Is looking for 8 % return. Most of the International buyers are being pushed out of the market with that number alone. Cheeves is correct smaller Multi Family moving as well.
You did very well for you time in the market. Good timing on your part. Atlanta still has great prices on some things getting all granite for counter tops. Super cheap there compared to Charlotte
Talk soon
This is one of the better post I have read on here and I am a reseller as well.Rather raise capital now from our international clients better play for them and us then selling homes.
Jeff this is very true and what most do not understand. I can go to any city mentioned and do what I do. Which is buy fix and sell homes , prices might chance from area to area but again most of this is going to be the same.
At the end of the day it comes down to relationships, building trust , doing business, and customer service..
To be honest I see more of the international clients now a cash lenders for a company like mine instead of buying properties. With the USA buyer back in full force I don't think the opportunity or the marketing will be with the international buyer.USA buyers are happy with 8 % honest return so something to keep in mind. I have been away from the forum the last few weeks making my rounds in the USA. So keep this in mind when looking at the USA.
Here you go
Below are a few guidelines I've been following. I would be interested to hear others feedback and opinions about what they think of my guide for what to buy and what to stay clear of.
1. Avoid properties with a walkscore of less than 50 (please refer to http://www.walkscore.com)
I just checked seven investment markets in the USA and all scored 40 or less major cities.( I like the site http://www.neighborhoodscout.com) Rental information is old but some of the other information is good.
So take this for what it is worth .Have a visit to the USA if you going to invest if not find properties close to home .
Stay clear of properties in areas with more than twice the national average rate of crime. Again this very misleading as they group areas in general in the USA one street to the next could be some thing totally different.Again if you plan on buying or investing a trip to USA or some one who has been to the USA that you can ( TRUST )Australian to Australian would be best start.I met some good people from this forum , look forward too meeting two of the Aussie posters who both happen to work in Atlanta in next few weeks.
Only buy properties less than 30 years old. Well this is going to be looked at two ways. For a novice yes only new construction for experienced investor who under stand renovations. This is comparing apples to oranges at the end of the day cash flow does matter. So the renovations , and numbers is more of a concern then age. I do prefer 1970 or better but mill homes in the South have been great cash cows if renovated property. Don't try to do it cheap put the money into the rehab new electric, plumbing, ac , water heat, then roof is most likely next , new windows( not always) again when we fix the bones and make them new .I hope you all can see the point .
Avoid properties with HOA like the plague. Or pay a maximum of 5% of the monthly rental value for HOA dues
I also think this is wrong find nicer homes in nicer areas and go after those. Appreciation is not going to be in lower end homes. I feel if and when the USA comes back the 2000 sqft and better will appreciate faster. Again if you look at real estate and investing as numbers you will learn to calculate this. I have rehabbed over 300 homes in last 5 years from $5k to $2,5m. I promise the HOA do not stop me if the numbers make sense I buy the homes .
Monthly rental value must be at least 2% of the purchase price (eg $40,000 purchase price with an $800 monthly rental value) Yes in make believe world this is possible in the USA with honest numbers not going to happen or very rare most likely in lower end areas. I'm can do this in lower end areas all day long but with those areas, come more head aches. In most major markets except Atlanta( GETTING HARD TO DO THAT THEIR EITHER) with nicer homes. Speak with the people who have rehabbed no less then 100 homes and see what their mind set is. This will separate the advice given from one who has done a few projects to a investor who is doing multiple projects at one time . I am not knocking any one but this is common.I went to a meeting in Charlotte NC and the lady teaching real estate has done 6 deals in 3 years. I wonder how much has she seen to be able to give accurate advice. For me I been in this game a bit but I still call ( actually I called Jay Hinrichs sat you all know on here with both from the USA. I discussed the ideas I had with Jay so getting a mentor more important then some of the advice above. This is a good start but again mentorship means alot in this business.
Don’t buy anything with more than 2.5% annual property taxes of the purchase price . This again is some thing that we battle here in the USA property taxes. I own a property have $26k in it rents for $600 month taxes $1900 a year. Fighting those as we speak. I own another property in Charlotte NC and have $76k in it. Rents $1k and taxes $1600 a year So taxes are being disputed in alot of areas in the USA.
just my two cents
kylermrice wrote:http://www.habitat.org/restores/default.aspxthis is a great option i use for my rentals, i like to be as green as much as possible.
Thats another good place and I forgot to mention but another good place to get some good stuff.
kylermrice wrote:Met with the big wigs from the main Charlotte meeting they are charging $3k a person – 10 people at a time and giving them 24 hrs worth of know how. Then helping them from A _ Z with the deals and getting 50 % of the profit.All i can say is WOWI told Jay the same thing I nearly fell over going to this meeting and watching people doing this
But nothing amazes me any more.
Talk soon
kylermrice wrote:I have a handyman on staff and a contractor is somebody i use when i'm stretched thin and don't have any other options, lolI use both my self but wanted to when I get a chance and breakdown why we used lic contractors ( Pay more but if something wrong it is warrantied )handy man are exactly that handy Man
How is Kansas City doing I see a California Group about to do another bus event their.
emma171 wrote:You should ALWAYS get a home inspection unless you are seriously knowledgeable… world class home inspections and Brett will do them for $300…. Good guy… Includes your termite letter. Tell them to be evil and include everything.. radon is an issue here which you may or may not want to know about….. Problem with large granite rock in the middle of all matters…lol… Alex I am SO here until July 22… Then Vegas, then LAX to look at MFR's for a few days then back to Vegas and then back ATL the 19th of August…unless needed back ATL sooner if needed. Then Oz for a few days etc. Ha, I will meet you in the parking lot of Home Depot I assume?? Not hard to spot the blonde with the beaten up chevy pickup (bought for one property as a throw away… Has lasted me every property ever since) Main headlight held up by pajama cord and NV plates.So meeting at lowes would not be a problem
LOL Talk soon
CL1706 wrote:Alex – would be interested in catching up next time I am in Atlanta (Oct / Nov). I think I have you on Skype – so will be in contact. Another thing which I have been doing while back here in Melbourne is paying $400 for a Home Inspection on any purchase I make. Last week I bought a house in Atlanta for $46K, and paid $400 for an inspection which showed up over $12K in urgent repairs. A nice little 'insurance policy'. Took the option to withdraw my offer, and the seller offered me $200 for the report for his information. Not a bad resultHit me any time I am usually on skype in the evening on monday – Weds nights
Charlotte is 38 minute flight to Atlanta or a few hr drive. Hit me on skype any time. Love to talk real estate . I am always a worrier with our homes, so I want inspections on everything. It saves alot of head aches. I think folks should budget them in every couple of years. Long term maintenance is the key for properties we want them to produce money not cost money
Talk soon
jayhinrichs wrote:well we are on the love you side of the equation
All very good adviceMet with the big wigs from the main Charlotte meeting they are charging $3k a person – 10 people at a time and giving them 24 hrs worth of know how. Then helping them from A _ Z with the deals and getting 50 % of the profit.
Needless to say she is coming to office Friday
Make sure to call me Friday I am in office from 11- 2pm nice days like that
emma171 wrote:You should ALWAYS get a home inspection unless you are seriously knowledgeable… world class home inspections and Brett will do them for $300…. Good guy… Includes your termite letter. Tell them to be evil and include everything.. radon is an issue here which you may or may not want to know about….. Problem with large granite rock in the middle of all matters…lol… Alex I am SO here until July 22… Then Vegas, then LAX to look at MFR's for a few days then back to Vegas and then back ATL the 19th of August…unless needed back ATL sooner if needed. Then Oz for a few days etc. Ha, I will meet you in the parking lot of Home Depot I assume?? Not hard to spot the blonde with the beaten up chevy pickup (bought for one property as a throw away… Has lasted me every property ever since) Main headlight held up by pajama cord and NV plates.Inspections – are investors best tool. I like before and after just good feeling. I don"t use appraisals they are just not worth it .
And wow nice on the truck. My best truck was 20 dollars little Toyota pick up 5 speed. My inlaws gave it to me. Got me around quite a bit.
Lets make a point to meet up and grab some lunch in Atlanta .I like to see the houses you are renovating.
talk soon
Lets discuss handy men and Contractors…
Will jump back later and start this discussion on why and when to use handy men and contractors.
jayhinrichs wrote:Cheeves,,I have posted these same comments now for a year,,, virtually verbatim
One of the major issues with the OZ investor is many of them have leveraged there OZ property be it investment or personal residence to buy in the US… they pay about 7% interest on this. This leverage is why I call the Aussie investor our California and NY clients 6 to 8 years ago. As they pulled money out of there homes leveraged and purchased properties in different markets. Some did very well others not so well.
So they are buying in the states looking for those 15% net yeilds and again who gives a good darn about Gross Gross just is not used here in the states…Its net net net…. Who cares if you gross 20 and only net 0 were does that get you.
so any way… Thats the reality for a lot of these investors if they thought for one minute they would only get a 7 to 9% return they would just stay home and would not come to our sand box to play.
I have seen that in my TWH model other than the doctors from Perth I have not had one investor from OZ interested in 9% WITH EQUITY on top… Don't think they get that part… Its always the same thats great and I will invest with you if you give me 15% ( We have sold some houses in different markets I think your system is good but take some one like WI she has made the time to come here and put her funds to work. So why give up 50 % of the home this is got to be for the hands off investor only.
don't get me wrong I enjoy this banter… but there are going to be some sad faces when the historic numbers flush out.
None of these people buying SFR's have any historical data to go on like a commerical property…. Your buying a empty house that needs work and is not rented.
I do beleive the there are some that will get above 10% espcially some of the early Atlanta folks… I think WI can most likely double her investment in less then 3 years or close to it with the way Atlanta numbers are moving up.
However your spot on with Detroit and the really high intensity management areas… Never going to happen in a thousand years. period. Not at what these people are paying for them… My Detroit boys that I run with never pay more than 2k for a home put maybe 5 to 7k into it then rent it they can absorb the issues.. But the turn key buyer paying 25 to 50k they are sunk before they start.And its like some of the poster that bought through TRR in Atlanta who have a pretty good rep…. But still it takes them months to rehab which should only be 2 weeks outside and months to tennant most of their clients are hugely negative geared first year and then the real management issue happen… in years 2 and 3… Even though these are nicer homes that inner city there are still issues with PM , stealing , tenants etc etc.. TRR I followed them quite a bit Actaully thought about changing our email to a similiar system they use for new properties . They seems to have a good handle on things but with volume I know this 100% things will slow down. We went from trying to do and buy 50 homes in both Atlanta and Charlotte and basically every where in between. What a waste of time and effort , not a good thing. 90 days from start to finish is what I feel is good time to to fix _ rent and make sure all is good. Now most are sooner but over all 90 days is good starting point.
I like to say look at this nice foreclosure with the before pic's and most of these were owner occ… How can a 5 year old home need 15k in work because thats just how they live imagine them as tenants.. takes an iron fist. Yes $15k in rehab just picked up
Here is an example and my budget before we get started so they can see a before budget.address is 2714 Chargrove LN Charlotte NC purchase price is $51,500 just picked it up. Bit older home think it was built in 92 rent estimate $950 ( we have several in area know I can get $1050)
Rehab Cost belowPaint out side and inside $3k ( $2500 is price but I always build in extra)
Ac unit replace $5k ( should cost $4500 ) or cheaper depends?
Carpet _ tile $2500 . Should be less I like to over budget funds
Update electrical and plumbing ( really mean inspect ) $2k
Replace water heater with that.
Miscellaneous stuff like blinds , door stoppers, Landscape , $1k ( very high)
Inspections before and after about $800 and closing cost $1k
So my cash lender has me in for $17k rough budget and purchase for $ $15,800 with purchase of $51,500 so we are now at $68k with rehab _inspection _ and purchase.
Good post.Alex call me[/quote]Jay lets shoot for Friday working on trip to Memphis and NY be gone all next week. Or skype would work.Friday is best day for calls or skype for me.
jayhinrichs wrote:Section 8 is different in each state. Here in Oregon there is very little of it. I recall a funny story: I am down in Gulf Shores MS… with my Oregon Banker looking at a 300 unit apartment that got blasted by katrina.. The ocean surge brought standing water 7 feet deep in all the down stairs units… The entire complex was vacant. So my banker as this question to the RE broker showing it to us. He ask's " what % of these units are or were rented on HUD Sec 8" Answer: the broker is a little puzzled and in his nice southern Drawl says well 100% … My banker and I just looked at each other. In Oregon you may have 5 to 10% Sec 8 at the max same with better parts of CA… Now I am sure it was not 100% but I bet it was 50 or better.Could you Imagine a unit like that with All section 8 tenants . The city of Rock Hill put in a nice little projects 22 homes on two roads and make them all section 8 .They got a grant and built the homes now they got 22 homes filled with people just sitting around. now the area is basically a drug invested street with a shoot out last week. So hopefully the city will realize that you NEVER put Sections 8 all together..
Bet Obama Land was the place they received the grant from.
emma171 wrote:All I know is that it adds a serious concern that should not be underestimated on wear and tear….. Roofs especially but vinyl siding etc… Just basic hard yakka on buildings, drain spouts etc. Just back from mandatory 24 hour beach trip…. God that ocean and white white sand of the Gulf makes up for slogging it ATL style..!Where did you go? and the Gulf is always nice to check out.
My oldest Brother is a police office in Sarasota Florida ( lives in North Port )beaches are awesome their
Jay
This is hottest summer I can recall in the South and been here for 20 years. This is late August weather and we are only in July.
Crazy some thing going on out their.
jayhinrichs wrote:Well Pat this is good newsTWH owns almost 50 of these just in Metro Atlanta that we bought in the last year…. And we are in them with our partners for half or less than this number.
If prices continue to rise my 5 year plan maybe a 2 year to 3 year plan… if we can sell for 100k average for our portfolio and we will have achieved at Plus 20% NNN NET NET NET no baloney no LLC no traveling cost etc to our investors…Plus we will make a nice profit on each one… Love it when the plan comes together so nicely…… That will be a happy day sending those checks to my investor partners…Only when they win do we win… As for our investors… Never a worry never a phone call about the property just the same boring check wired into their accounts each month like clock work…. Never talk to a property manager… E mail me once a quarter for an attaboy or hows it going … I just love this scheme I really do… Ok off to an Investor lunchin where I am guest speaker…..
Lets keep the pressure on Atlanta and keep those prices rising… The US companies are doing it in a big way now.
JLH
USA and International companies are to blame for USA Atlanta prices rising.
Same here on price range and 10 % return but I wanted more held back from what if so 8 % is realist but still have people telling me I am crazy. They can go and get 14 to 20 % all day long.
Any way can play the numbers and put on paper and make things look great .
Same in Charlotte $1m plus house $5k to $7500 k for larger house similar
We just need a new person in their not saying the other guy is better but we need to clean house….
Seems the harder we work the more they want to take from us. The lazier you are more programs to stay and be lazy …
All very good advice
