I have come to know many Miami-based realtors, and they are all professional and take their work very seriously. 

They would never cheat a client, if not for moral reasons then at least out of fear of losing their reatly licenses.

They also always know people to assist with repairs, killing termites, getting your garden looked after, etc. etc.  In additon to knowing all the laws pertaining to real estate and having access to very tight contracts, they also know lawyers to assist with setting up LLCs or evictions, and title companies to do the closings on puchases.

And here's my greatest surprise: if you find a good realtor you won't need a property manager.  I don't have a manager: I just paid a realtor 5% of the yearly rental income.  For small things (like fumigations, organizing plumbers/electricians) my realtor and/or tenants will assist in getting the job done, thus saving me getting ripped off by a property manager.

I'd also like to add that I've worked with about 20 people in the contracting business (roofers, plumbers, electricians, pool repair, doors/windows, tilers…) and have found all to be honest.  Having said that, they are ALL South Americans, where bargaining is the norm, so if someone tells you the job will cost $2000 you counter with $800 and then reach a final figure of $1000. 

I can see no reason why it would not be possible to look after your properties by yourself from overseas.  I'd even be willing to use contractors I haven't met in person, so long as there's a contract written up.  But let me clarify I'm talking about doing repairs to a habitable property.  If you are not on-site to oversee things, I don't think it's feasible to buy a delapidated single-family home and try to renovate it.  I've bought one such property, and even being present each day for almost three months still meant there were constant problems that needed solving, and major decisions to be made, such as: should I replace the whole roof, or just the part that's leaking, should I paint the pool or have it completely replastered, should I change all the bathroom fixtures, which would mean needing to retile, or just try to replace the broken pieces, should I replace the entire A/C, or just the extermal unit…

A lot of people e-mail me, either to ask for my advice on when and where to invest in the US, or to ask for help (to invest in Miami).  When I first started posting on this forum I had some scamsters contact me (whom I ignored, because they were most likely sitting in Nigerian internet cafes posing as millionaire Aussie investors).  From that moment I decided to stop responding to e-mails altogether.

But here are the answers to the questions of when and where to invest:

Where: I honestly think you can't go wrong investing in Miami, Phoenix, or Las Vegas.  Miami suits me perfectly, because I now live there most of the year (it has 9 months of absolutely perfect weather),.  The Miami Beach area is a fantastic place to raise my kids, the crime is low, and the tourist aspect (plus the influx of rich South Americans and Russians) provide an excellent floor to the market.  Miami is also very conveniently situated for British (or other European) buyers, since it's about an 8 hr direct flight away.

But if I were an Australian with about 50K to invest I'd probaly choose Phoenix.  Disclaimer: I've never been there.  Just from looking at the stats, geographic location, size and economic and political importance, I'm sure its real estate has great potential.  Also noteworthy is the fact that it fared the best  (of the 20 most NB cities in the US) in the Case-Shiller Year-on-year price change, coming in at a very impressive 3.3% growth (Detroit was second, at 1.5%, and Miami 3rd at 0.8%, with nearly all the other cities falling in price). 

Another great plus about Phoenix is that it's less travel time from Australia than the east coast.

Although Detroit probably also has incredible opportunities, it's a city you would need to know VERY well before jumping in (crime being a major consideration, plus neighborhood deterioration).

Las Vegas has surprised me over the past year, crashing 8.5% in price.  I'd never have predicted this, considering how prices had already fallen so low by 2011.  I guess the explanation must be a mixture of over-building in the boom years, plus the fact that the gaming industry struggles during recessions.

Therefore, I'd say Las Vegas is a bit of a wild card.  But that 8.5% drop in house prices over the past year could spell some excellent buying opportunities for the brave and foolhardy.

When:

I honestly find it very difficult to predict the bottom, the start of the turnaround, and the amount of time to the next top.  If it were China, I could make these predictions with certainty.  No government wants a weak housing market, so the Chinese government would just announce a couple of measures and house prices would skyrocket (eg. they'd allow people to buy more than one house, or to get mortgages with just 30% downpayment).  In the unlikely event that this didn't produce an immediate jump in demand, they could just announce that they are not going to release any more land (of which they own precisely 100%).  Decrease in supply can only equal an increase in price.  This is what Hong Kong has been doing over the past decades, and explains why a tiny apartment there will set you back much more than $1 million.

But when it comes to the US, with its debilitating democratic system and all-powerful military-industrial-media monopolies, nobody can foretell the future.  A strong president with the backing of a strong senate could easily legislate the housing bust into non-existence.  But why bother, since it's better for politicians to spend their time concentrating on the polls for the next election.  If the president were to ignore the polls and do what's needed to be done, the economy would only really get healed by the time the next president takes the stage, and he or she will get all the credit.

That's why I run a number of scenarios in my head:
Perhaps the bottom of the housing market will be during the next 12 months.  Plan of action: prepare finances to buy several more properties over that period.

Perhaps the market will stay depressed for another 3 years (as a result of banks finally beginning to release the backlog of REOs).   Plan of action: since this means the Fed will keep interest rates low for the same amount of time as the market is out-for-the-count, I shall concentrate my efforts on getting mortgages for my properties, so as to be able to buy more.

Perhaps the market will begin to rebound in 2013, and head steadily higher over the next few years until the increase begins to feed off itself and produces overheating.  Plan of action: let greed take over.  This is the exciting part of property investing, as you scramble to offload properties so as to lock in gains, which you then use to ride the roller-coaster to the top.  Of course, you have to be very careful about getting out before the bubble bursts.

At present the market (at least in Miami) doesn't seem to be doing much.  There has been a huge reduction in REOs ever since September 2010, but this hasn't affected prices much.  It just slowed down the volume.  What's happened is that all the bottom-feeders are finding new ways to do illegal deals (especially for short sales) which result in lower stated sales prices.
 
Here's the latest fad in how to profit from the housing bust: the buyer bribes the seller to sell him/her a distressed property (ie. a short sale).  For example, Mr A owns a house worth 300K (if he were to sell it as a regular sale) but he owes the bank 500K  for the property (either because he bought it at the top, or because he took out a second mortgage on it).  Mr A has stopped paying the mortgage, and the bank would love to kick him out of the house, but they are too scared to because there are another 1 million Mr A's out there, and if they all get kicked out of their houses then the bank will have 1 million new REOs on their hands, which are a nightmare to deal with, what with having to pay their property taxes, get the lawn mowed (otherwise the city will fine the bank thousands of dollars) and deal with druggies breaking in and stripping all the wiring and piping.

So the bank says to Mr A that he can sell the house as a short sale (ie. for 300K), give the entire amount to the bank, and then the bank will forget about the 200K Mr A still owes.  Sounds too good to be true, especially when Mr A realises he can make a cool 50K profit on the deal.  He finds a crooked realtor to list the house at 300K, but then the realtor must select from the buyers someone he feels will enjoy ripping off the bank.  When he finds an unscrupulous buyer, he sets up the following deal: buyer will buy the property for 200K (stated price), but will buy the furniture in the house (under a different contract, that the bank will never see) for 50K.  So the buyer ends up paying 250K (200 to the bank and 50 to the seller) for a 300K house.  The only trick is to convince the bank to only accept 200K for a house they thought they'd get 300K for.  But <moderator: delete language> this isn't that difficult to pull off.  For reasons unbeknownst to anybody, houses in Miami are allocated to asset managers in branches at other ends of the US (for example, the two REOs I bought in Miami were under the control of Bank of America asset managers in California!)  This means the asset managers have no idea of the neighborhoods their properties are in. Furthermore, the asset managers are swamped with properties, are incompetent, and/or don't give a damn.  As long as they have an excuse for why they only got 200K for a 300K house, then the sale will go through.  The way the crooked realtor comes up with this proof is by getting a crooked Inspection Company to write up a bunch of bogus problems with the house (eg. it has mold, Chinese Dry Wall, rusty plumbing, dangerous wiring, termite damage etc. etc.)
 
This is the situation happening in nearly all the short sales I pursued over the past 6 months (and it's why I ended up buying a regular sale as they third property).   The winners in these scams are the buyers (getting 300K properties for 250K), the sellers (getting 50K under the table).  The losers are the banks, and the other home-owners in the area, because prices in the entire neighborhood will drop, since the stated sales price doesn't include the under-the-table bribe, so it appears that the sale was at a much lower price than it really was, and then that sale becomes a Comparable Sale for other houses in the neighborhood.

It amazes me that these kinds of shenanigans are going on.  This problem didn't exist in 2010, when unscrupulous people were able to satisfy their greed by buying REOs after bribing the listing agent.  Now that REOs have disappeared, they're all figuring out how to play the Short Sale game.

It shows how "Dynamic" the US economy is.

It amazes me that the US used to be No. 1 in the world.  The guys at the top are all too busy getting rich (illegally, no doubt) to notice the damage done to the economy and society by bottom feeders.  Perhaps Socialism is the better system!

So why would I want to keep investing there?

Simple: lets take a property I own here in Shanghai.  I bought it 4 years ago for $150K (I got a mortgage for 100K of that).  It's now worth about 400K after all taxes and costs.  I rent it out for only $700 a month, which is exactly how much my monthly mortage payments are.  In other words, I'm making exactly zero in monthly income on this property.

But if I sell it, after paying back my mortgage, I will have over $300K in cash.  This money can buy a house in Miami (in a good neighborhood) that I can rent out for AT LEAST $2,500 a month for.  After paying property taxes, I'll have a monthly income of $2,000.

So if I don't sell this apartment in Shanghai, I continue to earn zero dollars per month.

If I do sell it, I make a little over $2,000 a month.  So what should I do?  That's what the Yanks call a No-Brainer.

Added to this is the fact that Shanghai properties have increased about 8 times in value since 2002, whereas Miami properties are exactly the same price as they were at that time.  

Eventually, something's gotta give.  Like the Phoenix (pun intended) from the fire, Miami must rise again!

I'm back in Shanghai, as of two weeks ago.  My reasons for returning were two-fold: my six-month US visa was up, and I want to sell some Chinese property and move the money into the Miami real estate market.

First some observations about Chinese property:
I can sell my small 2 bedroom Shanghai apartments in the Middle Ring for close to $500,000.  Shanghai is divided into 3 zones: the Inner Ring (downtown), Middle Ring (somewhat removed), and Outer Ring (the far-flung suburbs).  My friends in New York just sold their apartment (a spacious 3 bedroom, 2 bathroom) in a trendy neighborhood for $470,000.  Conclusion: Shanghai property is way higher than its New York counterparts. 
Prices of everything in China are shooting up.  People are much much wealthier on average than just a few years ago.  It seems that the reduction in the US middle class is the gain in the Chinese middle class.
I'm no longer of the opinion that the Renminbi is undervalued.  It's not going to rise any further.
Expect some serious inflation across the globe in the next decade.  The Chinese working class's average salary increased 22% last year.  Soon nobody is going to do factory work at low wages.  Everything that's Made In China must get more expensive.
Your average Shanghainese person is loaded with cash (as they are in Beijing, Tianjin, Guangzhou, Shenzhen, Fuzhou, Xiamen, Dalian, Wuhan, Chongqing, Changdu, and Nanning, to name just a few of China's monster cities).  If you're living anywhere that Chinese like to visit, expect property prices to keep their value, if not rise further.

Now on to Miami.
In the week before I left I was able to close on a third property (single-family home).   That means I now own 3 houses in Miami, none with a mortgage, so I can't advise on the ability of foreigners to get loans.

All three houses have been extremely easy to rent out.  I probably didn't ask enough, because each house went under contract within the first 48 hours of going on the MLS.

Here are the stats:
House 1: bought for $331K (2 bed/2 bath).  Spent about $50K to renovate.  Rented out for for $2,600 a month. 
House 2: bought for $120K (3/2).  Spent about $30K to renovate.  Rented out for $2K a month.

House 3: bought for $320 K (4/3). Doesn't need any renovations.  Rented out for $2,800. 
The property tax for all of the above houses is the same: about $500 a month ($6,000 a year).  I plan to get a lawyer to try to bring down the tax for House 2, because it's too high for the value.

Here are the rent returns after property tax has been paid:
H 1: 6.6%
H 2: 12%
H 3: 8.6%

The reason House 1 has a lower return is because it has a beautiful waterfront, which pushed up the buying price (the house is small and only has 2 bedrooms).  Renters won't pay a much higher premium for looking at the bay, but once I've added a bedroom I intend to sell the property for much more than $1 million, because buyers will appreciate waterfrontage more than renters will.

House 2 has a fantastic rent return because I took a huge chance on the house.  It had a lot of violations on it, which put off most buyers.  I had to do the entire renovation project under the nose of the city building inspectors, which was very stressful.  But in the end everything worked out perfectly, and the renovation costs and fines came in far under budget.  During the process I bitched and moaned (and got both angry and depressed at times) but now I have only good things to say about the Miami Building Department.  They aren't out to screw people.  They just want to make sure houses are as safe as possible, lest another super-hurricane hits (there was one about 18 years ago).

House 3 is an average house in a good area (Miami Beach) near to great schools.  It's the house that took the least effort (practically none).  It isn't in my nature to make such boring purchases, but my time was running out and I wanted to have the money invested instead of sitting around until I return to Miami.  Although House 3 is a solid investment and has a pretty good rent return, it is the house (in my opinion) that will increase in value the least.  I'm sure I will not sell Houses 1 and 2 for anything less than 3 times what I paid (including the renovations), but I will be happy to just double my money on House 3.

I should add that Houses 1 and 2 were REOs (foreclosures) bought from Bank of America, whereas House 3 was just a regular sale, bought from a divorcee who wanted to move on.  Another reason I went for the House 3 is because REOs were getting almost non-existent in the past year, at least in the few areas I was interested to buy in.

If you're in a rush, and don't have the time to wait for and renovate an REO, then you should consider that you will most likely end up buying a property with the same stats as House 3 (that's if you're buying in that price range). 

My plans for the future: spend 2 months in Shanghai selling a few condos, then fly to Sichuan province and drive up into Tibet for 3 months, by which time the hideous summer heat in both Miami and China will have passed, and then I'll return to Miami (with wife and kids) to buy a few more houses.  When the money has all been spent I might think about taking out mortgages on the Miami houses, so as to get cash to make further purchases.  The problem with mortgages are that the banks will charge a premium when lending to foreigners, and they'll demand that you purchase 3 kinds of insurance: Homeowners, Flood, and Wind, which come to a total of about $600 a month if you buy near Miami Beach.  After paying your property tax, your insurance and your mortgage (from the rent) you will be lucky to break even.   But then again, you'll own a lot more properties, so if the price doubles you'll make a hell of a lot more profit in the long run.

I'm looking at houses in the $120K to 350K range.  If they're at the bottom of this range then I assume they'll need at least 100K to renovate, which means a real price of around 220K.  There are two reasons I'm sticking with this range:
1. It's easier to get financing for houses in this range
2. You'll be renting the house out for about $2K to 3K a month, which means a much higher standard of tenant – someone who will hopefully pay on-time and not destroy the house

When I'm shopping for houses I always consider the rental income, and always use the 1% rule, meaning I make sure that the estimated monthly rental income is at least 1% of the total house price.  So if I'm looking at a house for 200K that needs the bathrooms and kitchen remodeled (that'll set you back a total of 20K) then the total house price will be 220K.  If I don't think it'll rent out for $2,200 a month, then it's a bad deal.

It's good to use zillow.com to get a rough estimate of the value of the house, and the estimated rental income.

When buying in certain suburbs (particularly Miami Shores and Biscayne Park) you must be careful not to buy a house that has any illegal additions.  The most common illegal additions are when the garage has been converted into a bedroom plus bathroom.  In the areas I just mentioned you need to get a permit from the government (called a Reoccupation Permit) after you buy the house.  An inspector will come to the house to check it out, and if they see illegal additions (meaning changes made to the house without using an architenct, structural engineer, licensed electriction and plumber) then you'll need to bring the addition "up to code" or demolish it completely.  I've come across many such houses, in great areas, selling for almost half their estimated value simply because people don't want the trouble that comes with illegal additions.

The rental market is very strong here in Miami.  There is a shortage of rental houses, simply because so many people have lost their homes due to foreclosure and they now need to rent.

A lot of people on this site want to know more about financing.  I haven't tried yet, but the info I've gleaned from lenders is this:
If your house is worth more than 100K you will most likely be able to get a mortgage (just ask any realtor to introduce you to a mortgage broker, who will then introduce you to a lender, but they'll charge up to 2% of the mortgage amount in commission, which they call an Origination Fee).  If you want to get a pre-purchase mortgage (ie. apply for it during the buying process) then you can borrow up to 70% of the purchase price.  If you want to get cash-out financing (which means paying in cash, and then applying for a mortgage after you purchase) then you can get up to 50% of the purchase price.  However, if you apply for cash-out financing within 6 months of purchasing then they'll still treat it as a pre-purchase mortgage and still lend you 70%.

Very important is to know that they won't necessarily lend you 70% of the price you've paid.  They'll only lend you 70% of what they think the house is worth.  They ascertain the value of the house by making you get (and pay for) an appraisal.  This is simply some idiot working as an appraisor coming round to look at the house and telling the bank what he thinks the house is worth.  The cost of the appraisal is about $400 to $500.  Don't be surprised if he appraises your house a lot lower than what you've offered, especially if it needs renovation.  Let's say you've bought a house for 300K but it needs a new kitchen, bathrooms, a paint job, and some landscaping work.  These changes will cost you about 30K, which means you'll end up spending 330K.  However, the appraiser will most likely take the cost of a similar home in perfect condition (let's say 350K) and then come up with an appraised value of 70% of that, namely 245K.  He does this because he's an idiot and has no idea how much it really costs to fix up a house, so to cover his back he just multiplies the cost of a similar but perfect home by 0.7.  The problem for you is that the bank will now only want to lend you 70% of the Appraised Price, which is 171K.  So instead of being able to borrow 70% of what you've paid you'll only be allowed to borrow about 50% of what you've paid.

Hi Readers

I've been in Miami since the end of January 2011.  I stuck with my Dream House (a waterfront property in Surfside, on the northern end of Miami Beach), and after waiting a full 7 months while the property was dragged through court, we were finally able to purchase it at the end of July.  It was an REO (foreclosure) and I paid way above the asking price.  I'm convinced it's worth at least $100K more than I paid, even if I sell it without doing any work (actually, I think I could get $150K more, although I'm not even slightly tempted to sell).  Since I intend to keep the property for many years, perhaps until I'm on my deathbed, I've begun serious renovation, which entails replacing both bathrooms (at a cost of $5K each) and  the kitchen ($9K), and turning the garage into a 3rd bedroom/bathroom (20K).   I'm also planning rebuilding the dock and seawall (20K and 5K respectively), and putting in a pool (20K).  I intend to use this property as my base over the next 2 years while I make many more purchases.

I've also bought another property in Shore Crest for $133K.  It has a pool, vaulted ceilings, 2500 square feet, and many other pluses.  Minuses are that the area isn't as renowned as Surfside or Miami Shores, although it's not a bad area.  It's just a one minute drive from one of the bridges heading over to Miami Beach, so if you're a water lover it's well situated.

To sum up my Miami Adventure since first flying here in October last year:

I still love this city.  The weather from October to June is phenomenal.  Warm and sunny every day.  Right now it's hot, but if you're living near the beach it's not too bad.

Buying property has been far harder than I'd imagined, although perserverence has paid off.

There aren't a lot of REO's hitting the market.  I've heard rumors that Obama has put pressure on Fannie Mae and Freddie Mac to keep REO's off the market until after the election next year.  This would seem logical.  I expect that he'll come out with another property stumulus policy (eg. a tax break) to push up prices over the coming year, thereby ensuring his re-election.  As soon as he's re-elected, he'll allow Fannie and Freddie to dump the enormous backlog of REO's, which will bring down prices in 2013.  But considering how hard it is to lock in a good deal, I still recommend investing in any property that speaks to your heart.  But again, there's no need to rush things.

There are great deals out there, but one needs vigilance, patience, and presence (there's no way you're going to get amazing deals unless you're here).

Renovation costs are roughly 10 times the price of China.  It's been quite a shock.  However, if you buy sensibly you should easily recuperate your expenses.

The ONLY way to buy REO's is through the listing agent.  Don't bother using an agent who isn't the one who will be submitting all the offers, since you won't know how high you'll need to bid to secure the property for yourself.

Short sales are becoming a much more feasible way of buying distressed properties than they were last year.  Banks are agreeing to short sales much faster than before, and for much lower prices.

I've noticed some regular sales (Ie. not short sales or REO's) that went through at phenomenal prices.  I house near mine in Surfside sold (as a regular sale) for $220K in June, and the following month the buyer flipped it for $280K!  The lesson is that it doesn't matter if it's an REO, a short, or a regular.  If you know the market and you make lowball offers regularly, sooner or later you'll hit the jackpot.  I believe that I have, twice!

I've looked at a few properties priced under 50K, and although the houses were in OK condition, the neighbourhoods can only be described as "bad".  Therefore, if you're looking to spend less than 50K in Miami I'm guessing you're going to be dealing with Section 8 tenants.  This may be difficult to do from afar, so you'll probably need to use one of the many companies touting their services on this website.

Personally, I still prefer the idea of 150K houses, since you can go to a regular bank and get a 70% loan, and at low fixed-interest rates.  Just make sure that you're buying a house that is in good enough condition to get a loan on.  The reason my Dream Waterfront House doesn't fit this bill is because the house is in bad shape.  Basically, I'm buying it for the land, and I intend to do major renovations on it and sell it for either half a million soon, or one million in a few years (since land along the intercoastal on Miami Beach is as rare as hen's teeth).

The advantage of buying one house for 150K, as opposed to 3 for 50K, is you will have much less hassle from tenants (3 times less, on average).  Another advantage is that the more expensive houses are dropping in price faster, because not many Americans have enough money to pay cash, or good enough credit history to get a loan.

One more lesson I learnt in China: location, location, location.  In the time it took for my properties in Wuhan and Nanning (both state capitals) to increase 2 times in value, my Shanghai properties went up nearly 4 times.  That's why I prefer cities such as Miami over cities like Detroit, and it's also why I prefer to buy 150K houses, not 50K.

Of course, if you're really worried about getting funding, you could always buy from a regular seller.  That way, you can first make sure the bank will give you financing, and if they give stipulations about the condition of the house, the seller will assist you in getting the house up to standard before the sale goes through.

There are so few decent REOs coming out at the moment you may find that buying a regular sale is more practical anyway.

I've no idea when the huge shadow inventory of foreclosed homes will hit, but when it does we all need to make sure we're ready for them.

Hi All

I'm not posting very often, so was surprised to see how many responses my last post received.

I thank you all for the time you've taken to read and respond.

Also, I hope my unfolding story is of educational value to all those considering coming to the US in the near future.

As Mojorising pointed out above, the trouble HSBC has given me is no train smash, since I will be paying in cash, and am not in any rush to get financing at present due to the continued negative trend of the housing market (ie. I won't be buying any more homes until my next trip here, from October  2011 to April 2012).

However, that does not detract from the fact that I feel slightly abused, simply because the HSBC mortgage officer I was dealing with misled me.  I've since spoken to his supervisor (in New York) who has informed me that they almost never lend on REO purchases, simply because they require that the houses be in perfect living condition before they grant a loan (and obviously most REO's don't fit that bill).  If the guy I've been dealing with at HSBC had just told me that in the beginning I wouldn't have wasted a minute of my time, a cent of my money, or an iota of my hope waiting on their loan approval.

And now I wish to explain some of my bigoted comments on the people of the US.  I've already made statements such as "rude Yanks", and perhaps even worse, though I don't recall exactly how derogatory I've been.

I've lived in many countries in the past (UK, USA, South Africa, Mozambique, Taiwan, and China) and have come to the conclusion that people in the US are the meanest.  (Interestingly enough, that's what my mother warned me of a few months back, because my parents emigrated to Florida in 1987, but hated it and gave up within a decade). 

Americans may love to say "How R ya?" and "Have a great day" but it's just talk.  The US is a country of iselfish mmigrants (whether you're talking about Europeans who moved here 100 years ago, or South Americans who arrived last year), who are by and large just out to help themselves.  This does not mean that you're not going to be treated according to the rule of law, but it does mean that you should be prepared for the following: getting treated rudely by immigration, customs, air hostesses, policemen, sales assistants, and firemen (that list is comprised from personal experience).  Also expect underhanded behaviour from landlords, mechanics, real estate agents, and second-hand car salesmen (also personal experience).  

Although I have no experience as a landlord yet, I advise that all of us potential landlords expect the very worst from our future tenants (in the building I'm currently renting in, 3 out of 20 apartments are being occupied by people who stopped paying the rent over a month ago and are awaiting eviction).

None of what I've written above in any way changes my long-term goal of buying lots of houses and making a lot of money when property prices eventually rise.  All I'm saying is:
1. I won't be growing old in the States (I'd much rather be in Europe, Australia, South Africa or New Zealand)
2. we must all be prepared for headaches during our five or ten year US-property adventures.

But I guess proplems are par for the course whenever you're trying to make a buck.  Buying property in China certainly wasn't a joyride.

Having written so many warnings and  so much negative sentiment above I'd like to end on a high note: the winter weather in Miami is phenomenal.  Warm and sunny every single day.  Also, the parts of Miami that lie along the intercoastal, or on the islands just offshore, are safe, family-friendly, and offer a great lifestyle.  You can't go wrong investing in places like these.

Today I saw an article in the Miami Herald reporting on Trulia's latest research into the US housing market.

According to the report, Miami is the best big city to invest in.

The reason: the money you'd spend over 6 years of renting a 2 bedroom home could buy that same home.

Here's a quote from the article:

<moderator: delete 8 paragraph long quote.  Please use link for that volume of information>

Read more: http://www.miamiherald.com/2011/01/25/2032762/miami-top-big-city-to-buy-home.html##ixzz1DZ047jKS

Hi everyone who's kept this thread alive during my absence from the site.  I'm now back in Miami, staying in a small rented apartment near Miami Beach.  I have my wife and two babies with me, which is quite a handful.

If any of you've followed my posts from the last time I was in Miami, you'll recall I became obsessed with a water front property (facing the intercoastal waterway, but just a few blocks from Miami Beach).   It came on the market at the end of October 2010, and it was a hot REO, attracting so many bids that the bank closed the bidding after about a week.  Even though I put in a bid 25% higher than the asking price, I didn't get it.  Someone must have bid much higher than me. 

It turns out that the person who won the bidding pulled out of the purchase during the inspection period (that's a period the banks give you to decide whether to go ahead with the purchase: if you pull out during this phase you get your full deposit back).  I don't know why the buyer pulled out (either he couldn't come up with the amount he'd bid, or he just didn't like what he found out about the property during the full inspection).  So the property came back on the market earlier this month.  This time I bid nearly 50% above the asking price, and it seems like I have won the bidding.  I say "seems like" because this bank is notoriously slow: it took them 2 weeks after they closed the bidding to let me know I'd won, and now it's been a week since I signed the final contract (and paid the deposit directly to them) and I still haven't received the signed contract back from them.  The estate agent (who is the REO listing agent, as I made sure I tracked her down before putting in my bid) assures me they're always this sloppy, but I'm not getting my hopes up until I've bagged the property. 

I know some readers will think I'm crazy to bid 50% above the asking price, and to be offering enough to buy at least 3 nice single family homes in Miami.  But if you took a look at the neighbouring waterfront properties, all worth well over $1,000,000 even in this depressed market, you'll see why I want this property very badly.

I'm not sure how things will pan out over the following 3 months that I'm here.  By this I mean that I don't know if prices have bottomed, or will fall further, and as a result I don't know if I'll make any more purchases. 

The Case Shiller stats that came out last Tuesday (reflecting property prices in the September to November months of last year) show that prices in the US are still falling, and rather quickly at that.  However, Miami only dropped 0.2% month on month, much less than most other big cities. 

Many of you are probably wondering what my personal experience of the market it here "on the ground".  Actually, I haven't been to see a single REO so far, partly because I've been so busy settling in, but also because very few REO's have come out in the last 3 months.  If you ask me, the foreclosure moratorium is far from behind us.  REO's are still just trickling onto the market, and those that come our are either in bad areas, or overpriced.

There is surely an enormous hidden inventory still sitting on all those banks' books, but I reckon they're not ready to release them yet.  They're probably still going through their paperwork to make sure they're not going to be sued for selling houses that were foreclosed by robo-signers.

If you're thinking of coming to the US soon, perhaps delay a little longer until
A. the REOs are being released faster, and
B. the Case Shiller stats show a real bottoming in the market

And if you're thinking of going to Detroit or Atlanta, you really need to see the most recent Case Shiller graphs for those cities.  They seem to be in free-fall….

Hi Mosqui

On my first day in the US I opened an account with Bank of America, and they gave me a Visa Debit card, which I can use anywhere in the world.  I didn't ask for a credit card.  I have a hunch that once you own property you can apply for a credit card.

Just a word of warning: you MUST have a US address to open the account.  There's no way around this.  So either rent an apartment for a few weeks (as I did, using Craig's List), or apply for a PO Box.  You can't just give some fake address and pretend you're living there, because they will mail your ATM and Debit Card to the address you gave.

good luck
Steve