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Hi Joe,
We used equity in our house here to purchase the properties using cash. We then refinanced with one of the banks here and set up investment loans for the houses so we are paying interest only (but with an offset account attached to each one). The interest rates many of the US banks are charging foreigners are not much different to Australia – particularly if you can pick up packages that offer .75% or 1% less than the variable interest rate.
We now need to find out for sure if we can negatively gear the interest here as part of our personal tax returns. We set up a LLC for each property with the LLCs owned by a Delaware LLC. Read something about Delaware Series or 'cell' LLCs today which sounded simpler but I think its so new, there is still some uncertainty. About to make an appt with an experienced Tax Accountant.
In respect to locations, we have bought in Union City, College Park and Lithonia. Not sure about Savannah but you need to make sure your tenants have a stable job and are able to pay on time. The utility expenses there are quite high compared with Australia and their wages considerably lower so make sure you get a good property manager. In my experience they are not necessarily easy to come by.
Regards,
Canberra Girl
Rosa,
We have bought four properties in Atlanta and two in Florida. The cheapest in Atlanta was $40k with $13k in renovations. The rental return is $950pm. Personally I would not buy off any Australian company that is based in Australia without heading over to the US and physically checking out the area and even the potential houses.
We used an Australian company based in the US (and travelled there twice) and bought foreclosures. We compared the foreclosure prices with past sales for the property, and with prices from other houses in the subdivision or close by. I dont get the whole 'take over their mortgage' scenario as this may mean you are actually paying 2007 prices and not 2011 prices which are often 60% or more less. Yes the interest rate is cheaper than what you would pay in Australia but you have literally wiped out any possibility for appreciation in the future. Makes considerably more sense to buy a foreclosure and have it renovated (its amazing what 10k can buy you in the US). With the four Atlanta properties, they all rented in remarkable time with the $40k house rented before the renovations even began. The reality is if you buy a good house in a good area, you wont have any trouble attracting good quality tenants.
Regards,
Canberra Girl
We have bought a number of properties from Top Rental Returns USA and have visited Atlanta twice now. During both visits we toured potential houses (all foreclosures) with Bronwyn and Micheal who are Australians and are based in Atlanta and chose houses that we were happy with. We then waited to see if the bank accepted their offer and the HUD closing statement clearly shows the accepted foreclosure price and their commission.
They managed the renovations (and received no kickbacks from the builders) and have also employed an American to manage the properties. Tenants were all found within a month.
We purchased two other properties in Florida (unfortunately both are townhouses) and have nothing but issues with the property managers (their care factor there is zero!). From our experience it is absolutely vital that you visit, get a feel for the area as each street can change, let alone each suburb and feel comfortable that the house you are buying is well priced (read bargain) and will attract good tenants. We paid between $40 and $56k for our properties in Atlanta and then between $8 and $13k for the renovations. The returns range from $950-$1100 month.
The rent we receive for our Florida properties is half that and the HOAs increased by $60 a month on one place, so we are hoping, fingers crossed for greater capital gains. We also found that the real estate agents in Florida were all too happy to deceive you and couldn't be trusted. The sellers and buyers agents seemed to collude, even though the buyers agent was meant to be working with your best interests in mind!
