Forum Replies Created
HSBC in Aust can setup you up with a HSBC account for a fee of $200. If you want to save your $200, wait til you go back over there and then setup with HSBC for free. I didnt have a US bank account when I bought my properties and paid my deposit via bank trf from oz. All you need to do is transfer the earnest money via ozforex.com.au or your oz bank. This is easy once you have the routing number of the destination bank account.
Richard Lilycorp has a good link on setting up your ITIN http://www.us-property-investment.com/IRS-Tax-ID-Number.aspx
There will still be more than enough bargin prices in the US in September when you go back. The US property prices arent moving anywhere fast given the way their economy currently looks! .
Im not sure exactly what you mean on the tax side, but I would refinance all three properties so that the majority of your debt sits on the investment properties. Debt on your PPOR is not deductible, so it is in your interests to reduce this to the lowest amount possible, using the equity in your IPs. Refinancing is the best way to achieve this and is allowed for tax purposes. I think this is probably what you were asking!?
wealth4life.com wrote:New companies are flooding in now doing USA investment … is this safe advise or risky in your opinion … or should we be wise to wait 6 months and buy at the bottom.Im always amused when people say things like this. You cant possibly have any idea of what/when the bottom will be? You could wait and try to purchase property in the US at less than current prices, but remember that property prices over there have taken a beating already. While they may fall further, most overseas investors that buy over there are not looking for immediate capital growth. Its generally a CF+ goal rather than an appreciation goal (at least in the short to medium term). Anyway, I doubt you’ll see a significant change (up or down) in property prices over there within the next few years. The drop in prices has simply been a correction to bring down inflated property prices and it is likely that they will hover around these prices for a while.
daveclimbs wrote:What are the benefits, if any, of managing your own tax lien investments over investing in a tax lien fund? The lack of thorough due diligence (ie local knowledge); the difficulty (and increased risk) of managing potential foreclosure from abroad not to mention your time invested in researching the available lien inventory must eat into the potential ROI as compared to a one off investment in a tax lien fund which itself can return around 16% pa. I'm interested in what people know about this?I am also interested in tax lien funds. I think these are a great idea as it cuts out the admin and banking issues that you inevitbly have dealing with US banks (trust me – they are a nightmare, this is why their banking system went downb the toilet).
The only funds I know of Tax Lien Baron, Yield Profit fund and Comain. Couldnt see anymore through my google searches? Personally, Id rather stay away from one of these smaller operators. Yet to see if one of the big fund mgrs run tax lien funds? I think youd be safer investing in Macquarie, Merrill, UBS etc, even though the fees might be higher. Interested if anyone knows more about Tax Lien funds.
.Has anyone managed to make it work by investing in tax liens? Interested to hear from some investors that have been doing this for a while.
itsandrew wrote:Thanks ambosh,The one I am familiar with is the 11 second rule (i think that's what its called). on 400k property rent would need to be something like $3460 pcm. I find it hard to find a property that fits that (admittedly I've only just started looking again). 1% rule is a lot more conservative. Are either of these really a useful guide as a screening tool for CF+ properties?
Andrew
Not really on higher value properties. You wont see many properties valued at $400k renting $3,460pcm (or $800 per week). It becomes even more unlikely as the values rise.
Read this free ebook on liens:
http://lienbaron.com/tax-lien-ebook
Its a brilliant summary of the lien process, outlining the risks (primarily early redemption or ending up with a worthless piece of land or property), benefits, process and discusses the methods of bidding at auctions etc. It goes into detail about the difficulty of investing from abroad etc followed by a bit of a plug on tax lien funds (like managed funds), but its a valuable read.
Andrew
The 1% rule is one of the rules investors follow when looking for cash flowing deals.ie the Gross monthly rent needs to be greater than or equal to 1%of the annual mortgage cost. eg if your mortgage is $400k, does the monthly rent equal $4k per month (unlikely in Sydney!)? This and the 2% rule is mostly likely to work on lower priced deals, regionally or cheaper areas in general.
Cheers
JoshI doubt you could bank US cheques in an account in oz. You can make and receive wire transfers through your US bank (once the account is setup) to the payee/peyer over there. Thats what I do for my properties. Being based here, you dont want to be continually messing around with US cheques.
Is anyone keen to meet for a lunch/coffee to discuss US liens. Somewhere in the the Sydney CBD?
Josh
If I was a gambler and had the time again – id wait until property prices in Sydney/Melbourne come down. Its not a question of if – its a question of when and by how much.
Any income earned in a trust and not distributed to beneficiaries is taxed at the top marginal rate ( around 45-50%). In short, its not worth it.
Living in a property owned by the family trust is fine. Just dont try and claim any deductions are try to say you pay rent on it – if you are – suggest speaking to an good accountant about the ATOs Anti Avoidance laws.
I dont need to repeat the short answer given above!
I think in the US you would qualify for 1031 exchange, which provides an exemption for the situation you mention – only if a US resident for tax though. Australia is less generous.
Citibank = too hard basket. As I said earlier, suggest sticking with HSBC Australia and just paying the $200 to get them to setup your US bank account.
re the question about my wells fargo bank account. I set this up over there. It me not be an option from here. You cant present a US issued cheque in Australia. You have to mail the cheque to the payee over there.
Suggest staying away from multi-currency accounts. This isnt an actual bank US account – its just a currency account. Your sole purpose for this is for hedging not trading.
Applying for your itin is easy on the IRS site: http://www.irs.gov/individuals/article/0,,id=96287,00.html#apply
Why are there so many people on this forum trying to setup US bank accounts all of a sudden?!
For US bank accounts, I opened a Wells Fargo one while over there and im pretty sure you can arrange one by phoning them.
HSBC Aust can arrange a link one with their US office for a fee of A$200.
I missed the seminar but am interested in hearing more about investing in liens. In general, what was it covering?
Kiwi Property Guy wrote:They did not introduce Capital gains tax, and did not stop investors being able to claim losses etc.As an aussie tax resident, your still liable for cap gains tax on a property in NZ so whether the NZ tax authorities charge on the sale it is irrelevant. Great if your a kiwi though!
Josh
PaulDobson wrote:I normally buy from the person that bought from the developer, as time tends to establish a real price for the property.Agree with Paul here. Buy from the person that bought off the plan, and get a discont for doing so!
To answer to the original thread question : America!
Where else can you find properties with mthly rents being > 2% of the property price? eg my block of units was $80k and gross mthly rent is $2k. These deals are getting harder to find, but its not uncommon in the midwest…
chriscarman wrote:icybarns, i just finished reading two of your posts and i dont think you actually said anything in either of them?thats quite a skill considering how many words you wrote to say nothing…
haha! Some people aim for quantity over quality!
Forex is a risk I wasn’t planning to take, hence I borrowed in usd via seller financing. Best bet is to try to source financing over there rather than rely on an aud line of credit imo. To answer your original question though I don’t know of any avenues for hedging sorry.
