Great thread mate. Definitely keep the posts coming!

Hi Lenny,

Thanks for your post.

I have a few questions as I live in Sydney and am thinking about undertaking a similar project. To give you some background, my mate and I are working full-time as engineers and have been looking at purchasing a property in the US for the last year or so. This is harder to do than it first seemed and we are now looking at buying a cheap property in NSW and doing a renovation to increase equity and rental return.
I own property in the US, it takes time to set up the LLC, accounts and meet the right people but its definetly worth the effort.

My questions are:

1) What do you do for a living and how do you manage to find time to renovate a property (you mentioned that this is your 7th or 8th project)? I have an interior fitout business. I would go in between jobs to do renovations on my personal properties. You must plan ahead and organise all the trades and materials. If you know what your doing it shouldnt take more than 2 weeks to do a full internal renovation.

2) How did you get started in this and what would you recommend for us as a first project?
Hard to say. Pick quality over quantity. Be patient and dont just buy to get your numbers up. Wait for a cracker deal. A great deal is something that you can increase in value with a renovation and pull out the equity. After you pull out the equity the property is positive or neutrally geared. These deals are not easy to find but are worth the wait. They will mostly be similar to the one I just bought. Fire damaged, vandalized, termite infested.
3) How much of the work do you do yourself and how much do you contract out?
I would demolish (laboured for 4 years so its still in my blood), sometimes paint and do bits and pieces. I mostly project manage and coordinate all the other trades. Completion is sooner and of better quality if you get tradies in.
4) Do you have a team of people that you use (tradies, property manager, real estate agent)?
You build relationships with people werever your looking at buying. I own 2 properties in Mildura and have fantastic contacts there. I can pretty much buy a house site unseen and renovate it without even going there as I know good people I can trust. I didnt know anyone at the start but eventually you will meet people. For Coonamble I will be taking my trades from Sydney as the local builder was a bit too expensive. I have a great contact in the council who I have spoken to a few times and also been in contact with the agent and a few local motel owners. People are very friendly in regional towns.
Once again, thanks for starting this thread and keep up the good work!

Hope I was of help.

Cheers,
Lenny

Cheers.

I am with Cheeves on this one…..don’t like the word “guarantee” as part of the equation. Nothing is guaranteed in life and that most definitely extends to property investing no matter if it’s in Australia or the USA.

But for the sake of the exercise and to get things rolling along as you intended I have already purchased 3 properties so far with more planned. Not large compared to my Aussie property portfolio but small steps I guess.

No1. This is a commercial block of dirt of which I am 1 of 10 members in a LLC that owns it. Located along Houston’s energy corridor where all the big multi-national companies are located. 2 acres with no return but we are all in  a position to hold it and the plan is in the next 12-18 months to build a commercial property to cater for the medical precint located all around us. Longer term hold. I won’t elaborate on this transaction as it is not the norm for people on this forum. Didn’t use any company based in Australia….this was all people I already met, knew of and trusted but the reality is…I don’t need a team for this one at this point in time.

No2. This was a single family home located north of Dallas. A local builder was able to build brand new for me at a cost that matched existing homes that I could have bought or refurbed. He was an experienced investor himself and had a large enough portfolio that it required his own full time property management that he set up. I came under the same management team. I was able to get finance from a local bank in town that the builder knew. Again this wasn’t through a company….I was introduced to the builder from another Aussie who had been through the same process and had recommended him to me. Reflecting back it was about as turnkey you could get without it being a turnkey operation. I set up all my own LLC’s etc and was in the US to open bank accounts etc. The builder was even able to give me a $5000 rebate on the contract on completion so I ended up with money in my bank account after it was all done. Am I happy with the service and outcome so far ?? I can honestly so I have had no issues at all with the home. Rent is paid on time each month, property inspections go down well (the good thing about a new home was the builder needed access to check on things at random so in the tenants eyes it wasn’t a formal inspection by the Property Managers). Money goes into my bank account and the bank takes the repayment out…nice and simple. Would I do this investment a second time round…..honestly I don’t think I would simply because I don’t think I would have 2 properties in the same location. (Even though I thought it a good omen that the local private college has a Kangaroo as their mascot !!)

No3. This was again a single family home but in Dallas itself this time.  I used a turnkey company after doing some due diligence.  If anybody hasn’t read any of my earlier posts…I actually got a job with MyUSAProperty when they began….not that I wanted a career…I thought it would be a great way to see what they knew & I perhaps didn’t. I was in a position in life that I wasn’t working full time so had a few weeks to kill to run through the training (brainwashing) programme for new recruits. My god I thought I had stumbled into a time share conference with the heavy sales tactics and processes. Even found out that the trainer was from the timeshare industry after a couple of days. These guys were not the slightest bit interested in what their clients purchased…they just wanted the sale and move on to the next victim. The pressure to get a sale was like watching the movie “The Boiler Room”…no joke. It did teach me something….the Aussie based buyers agents are so reliant on what the US based wholesalers tell them cause they have NO IDEA about where their homes are or what area’s are good or bad. I left after the training much wiser but I have to tell you….freaking out about all the clients these guys have led up the path when they were around. Anyway you get the idea…I had a pretty bad taste in my mouth from that experience so made a conscious decision not to have anything to do with an Aussie based buyers agent…they are too far removed from reality. I found a company based in Dallas that actually owns the properties they sell and provided me with homes that were refurbished and leased already. Finance referral to a local bank was made where I was financed as a foreign national with a 30% downpayment. I have the place leased through their own property management company. My only issue to date has been a dead shrub in the front garden….the HOA took offence to it and issued me with a notice to replace it or I would be contravening the by laws. I got in touch with the PM and it was replaced in 24 hours and the tenants put on notice to water the garden. Early days I guess but I am happy with how things are going to date.  As an owner I have access to a web portal where I can download copies of lease agreements, see when the rent was paid by the tenant, see when it was deposited into my account and ask questions and get replies from the PM. Pretty convenient when I am on the other side of the pond.  I used Peter O’Reilly from Texas Cash Cow who contributes to this forum….don’t normally give someone a plug but if they do a good job……Most likely to use him again for No4. He isn’t based in the US himself but the company is and they don’t exist purely to have Aussie investors…they cater mainly for the US investor.

But back to your question….can they guarantee my investments are safe and well looked after to their best abilities…..I don’t think anyone can honestly. I haven’t been able to find anybody in Australia that does so would take it for granted they wouldn’t be found in the US either. Sometimes the investor needs to be accountable for their own actions. That still comes down to actually going over and having a look at where your planning to invest and what you will get for your dollars. Meeting the people that will partner you and seeing how they operate gives many advantages. Ask to speak to other clients is something I always do as well.

Hope this all helps.

Byron