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Hi Noobie,
I can’t help you with your Australian investments. I can however offer some sound advice moving forward.
First, be conservative and keep a large cash reserve. How much depends on your living costs but I recommend 1 years worth covering all costs for you to live in the life style you have become accustomed too. This is very important. As a beginner, you will make mistakes. I’ve being doing this for 5 years full time and I still make mistakes. Having money set aside for just in case mistake moments is essential.
Second, real estate isn’t always as liquid as investors would like. Think about how much cash you need in a year or so. It might be a good idea to keep some of it in something more liquid.
Third, take some of that money and educate yourself. There are a lot of good books out there and even some decent seminars. I know when I started that really helped me avoid quite a few of the common pitfalls. Seems to me there are quite a few knowledgeable investors in your market right here. It couldn’t hurt to send them and email or drop them a line and most would probably help.
Fourth, take your time! Don’t be rushed or pressured into any deal. There are always more deals.
Hope this helps.
Hi Ambosh,
No, I don’t receive any of the money they charge as fees. I provide a finished product to them that they market at prices listed clearly on my website. How they market that property and make money is not part of our agreement. David asked if anyone has worked with My USA Property before, and I have as a ground partner. As a ground partner My USA Property has been a fair and honest company. He did what he said he was going to do when he said he was going to do it.
Also, I work with several other marketing companies around the world, and one other in Australia. From an organizational and procedural perspective, My USA property is better than most. (logistics and timing on my side). Thanks.
Hi David,
I work with My Usa Property as their ground partners in Detroit. I have enjoyed working with them and as far as my side goes, things have always gone well. Obviously I’m not an end user but my experience as a provider has been positive. We have taken care of Andrews clients well. Hope this helps. Thanks.
You may want to consider building your own ground team. I replied to another topic that covers some helpful hints.
Hope this is helpful.
Some thoughts on working with ground partners in America
Ground partners are a necessity if you are buying property in another country. Even if you were to move to America it is unlikely that you could do everything required to renovate and rent or sell your property. This is especially true if you plan on renting your property. Unless you plan on living here forever near your investment property, you will need a property manager.
So here are some pointers to assist you in researching, vetting, and hiring your ground partners.
1. Look up their business on the official state website. Almost every state has a database with business registrations on it. This will tell you if the business is registered with the state, if it is in good standing, and if it is a real business.
2. Look them up on the Better Business Bureau website. Don’t be surprised if they are not on there as many business are not but it doesn’t hurt to look. Also, don’t be to surprised if they have a few complaints. It’s hard to run a business and not upset someone. Look to see if the complaints were responded to and/or settled.
3. Google the business’s name and the owner/agents name. Google is a powerful tool when looking up dirt or good things about a company. Don’t be surprised if you find both. Ask questions about anything negative you find. As a rule of thumb, most people will do what is right when it is easy, fewer will when the chips are down or if the solution cost them money. Find out about projects that went bad and what they did to fix it.
4. Ask for references and testimonials. Nobody will give you their entire database but I don’t know any good business owner who won’t give you 3-5 references to help secure some business.
5. Check out their business websites, blogs, and social networking profiles. Get to know them, how they approach business and life and make sure this reflects what you want to see in a team member.
6. Ask questions and verify answers. This is probably the toughest part because most people don’t have enough knowledge about that area of expertise. Before you invest, read about property management, call property management companies and ask about rent checks, vacancy, and fees. Ask to see contracts and agreements in writing. Educate yourself in their field enough so you understand what they are saying. You don’t have to be an expert in everything (not possible anyway) but you really should know enough to spot the B.S.
7. Take your time when hiring! Don’t make snap decisions. Contact as many business’s as possible, narrow it down, and go through it all again. Yes this will take time, but if you’re not willing to take this time and be diligent, you should probably just leave your money in the bank. Most risk in investing is due to a lack of knowledge and poor execution. Take your time, learn, THEN leap.
8. Pay your professionals well. Yes, you want a bargain and a competitive bid but often the low price leader doesn’t deliver the highest level of service or the best quality. To a certain degree, you get what you pay for. Remember, everyone works (unless you’re independently wealthy!) and people expect to be paid based on quality of workmanship, knowledge, reliability, and results, including you.
9. Call and talk to the business owner or rep. See if you like them and you get along. Check how quickly the respond to emails and phone calls. This may seem silly but you are considering a long term investment and you will be working with this company for a long time. The whole experience will be much better if your communication styles match and you like the person.
Hope this helps.
Jeremy Burgess
The Detroit Market Expert
http://www.google.com/profiles/jeremyudwThere are many banks that will allow you to open bank accounts via the mail even if you don’t have a ssn or an itn. They will ask for a notarized copy of your passport and another form of government ID like a drivers license.
The four I recommend the most frequently are large banks with familiar names for my clients: HSBC, Chase, CITI, and Capital One. HSBC is the most popular with my clients as it is a large and well recognized international bank. All four will allow you to open accounts via the mail.
Here are a few tips to get the deal you want. I look at over 100 properties a month and I make offers on the spot while I’m in the house if I want it. As you have noted, much has changed, at least in Detroit, in the last two years. The market is very competitive with properties selling for upto 100% more than asking price if they are nice and truly under value. To make your offers more competitive, do what I do.
1. If you like the house, call your agent while you are still in the house and have him/her make an offer right away. This is assuming you already know and like the area, you have a decent knowledge of required repairs, and you have a team ready and willing to execute your plan.
2. Offer more than asking price. This is on a market by market basis, but in Detroit, many great properties (not ghetto properties) are listed very aggressively, as low as $10,000 USD. If the property doesn’t require much rehab (renovation) it’s very common for the property to be bid up to and over double the asking price. Obviously this is only advised if you know the repaired (after fix up value/after repair value) of the property. You still want to get a good deal. If a house is worth $55,000 USD fixed up, and only needs $10,000-$15,000 in repairs, you have some room to increase your offer.
3. Increase your earnest money deposit (emd) to a higher amount. In Detroit, a $1,000 emd is common. In this competitive market if I really like a property and I know it will be bid up in hours, I will submit my offer with a large emd. Following the example above, if the property is nice and listed at $10,000 with the repair range above, I would offer $17,000 with $10,000 emd deposit. What this tells the real estate agent (who wants to be paid and is very tired of investors not closing on properties) that I mean business. Many times my lower offer will be accepted over much higher offers because of this. Once again, only do this is you know what you are doing and you are ready to buy the house. Your emd is nonrefundable (except if the seller can’t produce clear title or the condition of the house has changed somehow since you put the property under contract) so there is no opportunity for second guessing yourself.
4. This may seem basic but submit your offer with a proof of funds (bank statement, retirement account, etc). This proves to the real estate agent that you have the liquid funds to purchase the property.
5. Offer to close on the property in less time. Usually banks want to close in 30 days. On all my offers I put that I can close in 7 days or less. If your offer is the same as another, this can and usually is the deciding factor.
6. Don’t underestimate the importance of the real estate agent. They are the gate keepers to the banks, their clients. Many times the banks will rely on the real estate agent when accepting the right bid. It’s not always about the highest price or the fastest bid. Having a great relationship with your real estate agent will increase the chances of your offer being accepted.
Hope this helps with your property acquisition. As a note, these points are only for those who understand the market they are investing and have teams on the ground they trust to do the work necessary.
Jeremy Burgess
The Detroit Market Expert
http://www.google.com/profiles/jeremyudw
