Forum Replies Created
emma,
Nice post on the foreclosures… IE sherrif sale….
Each state has its unique process's.
Court house steps purchasing is not for the average passive out of area investor… VERY VERY difficult to compete with the locals who have been working the same market for years..
There is all sorts of colusion that goes on at court house steps with the good ole boys.. it can take you years to brake in.
The amount of work and time someone would have to put into finding a Sheriffs sale and actually buying the house they are interested in is very remote for the reasons you state…
Its a business you need to hone in on 20 or 30 houses you like and you will never know which one you end up with until the auction….
Drop bids are the best opportunities, many homes as emma knows never do have an opening bid and so many investors do not check them out…. Then the bank comes in and drops the bid at the sale and there goes a smoking deal back to the bank or some larger group…
So when I was activily in the business in Portland Or… I would look at every single property going that month establish a price I would pay and I would have checks ready for them.. Many times I was the only bidder… HOwever to do this you need to go to the sale with easy a million or more in Cashiers checks…. And the bigger players in the US especially the states were auctions are only one day a month.. will have 2 to 5 million cobbled together, and there you are with your 40k and a pocket full of pennies… Not likely your going to beat me or any other of the bigger players…
Far to much time and energy for buying one property and thats what US investors find out after a year of chasing these and never buying one… Listed short sales and bank owned… and or the sweetheart wholesaler that has a pipeline is the way to go… The trick is finding a wholesaler like Alex that only charges a nomial mark up.. As well as I hear TRR is not bad on mark up but very slow on performance of rehab and tenanting so from what feedback I have gotten most investors first year is neg geared for sure.
Right now in Any county in Metro atlanta there will be 30 to 100 bidders its a mad house and very intimidating.
We are working up a bidding service for Atlanta to roll out in September….The purpose is to supply the bigger US investors entering the market…Is the property stablized now ? IE rehabbed and tenanted ?
And your happy with your current management situation.
If any of these are incorrect please feel free to send me an e mail and if its in an area we service we will give you a down and dirty quick assessment at no charge.
My comments are for our Foriegn friends… US citizens maybe able to find a home somewhere.
Off shore no way.. just way too much risk in those as well as no real money made on the origination of the loan..
JLH
Alex,
sounds like a seen out of Mayberry, right down to the fishing pole
Nice living in the country,,,yet close to the city… thats the mantra here in Portland lots of semi rural ranches and farms.
we can drive 5 minutes and be at farms were we buy all produce and fruit that is grown right there,,, jBerries are coming in now.. So there are u pick blueberries and many other kinds. And of course wineries… I live right above a winery and they play live music Sunday afternoon so we get to hear the concert..
JLH
Emma,
I have done the exact same things as you describe about making a deal with the tenant.
I had 3 rentals just north of San Francisico… They were wobley box’s on thier own private lot.
I put the tenants in there at 30 to 40% less than market… market was about 700 I rented them for 500..00 and told them never call me.
All repairs are on them…. One tenant lasted 15 years… Now when I got the property back I had to haul it to the dump and sell the lot to habitat for Humans…. But hey I only paid 7k for the property I got 10k for the lot and feel good for selling to HH…And made what 6k a year minus tax and insurance say 5k… And other than maybe flying my plane down there from oregon every 2 years… Which is 250 each way just for gas.
then rent a car and ride around…. So made say 400 a month positive for 15 plus years… And it all went into my IRA so I really never saw it.
Since we really do not fixate like OZ investors do on Rates of return gross or net… Just hey is it good or not and do I have to feed it or not.this was a good deal for me…
YOur thought could work but you would have to do all the background work and definatly have a drive by at least once a quarter to make sure things were progressing as agreed…
I like the idea had not thought of it in a while… I think I will take one or two of my homes and try it and report back..
JLH
Alex,
thats why I contend that those that have bought property with short term Vendor financing say 3 to 5 years.. and where told as soon as things get better they can refi… This is just not the case and is ABSOLUTLY FALSE… These 50k and sub loans have never been easy to get Unless they are owner occ. Or maybe second homes… NOT investment properties and certainly not Foriegners.
So my advice to those that have bought property this way is to either start paying your mortgage off now with higher payments I am sure they do not have pre pay penalties… and or be prepared to pay the balloon in cash..
DO NOT BUY A VENDOR FINANCE on the hopes and representations from any marketing RE salesmen etc that is telling you that lending will get better in a few years just not the case
JLH
Alex,
thats why I contend that those that have bought property with short term Vendor financing say 3 to 5 years.. and where told as soon as things get better they can refi… This is just not the case and is ABSOLUTLY FALSE… These 50k and sub loans have never been easy to get Unless they are owner occ. Or maybe second homes… NOT investment properties and certainly not Foriegners.
So my advice to those that have bought property this way is to either start paying your mortgage off now with higher payments I am sure they do not have pre pay penalties… and or be prepared to pay the balloon in cash..
DO NOT BUY A VENDOR FINANCE on the hopes and representations from any marketing RE salesmen etc that is telling you that lending will get better in a few years just not the case
JLH
Steamline:
I think your experince is what most investors are going through be it foriegn or domestic.
Gross returns are just phantom,,, its net return… then you add in your cost to come and visit excetra and your neg geared right there.
Richard makes a great point… and one I made… there are very FEW if any Mortgage brokers that are professionals in the US that are going to work on 50k mortgage loan… With the new commission rules and full disclosure of Yield spread premiums Mtg brokers in the US have seen their incomes come crashing down… Thats why many either left the business or when to work with a bank for a wage paying job.
Well Pat this is good news
TWH owns almost 50 of these just in Metro Atlanta that we bought in the last year…. And we are in them with our partners for half or less than this number.
If prices continue to rise my 5 year plan maybe a 2 year to 3 year plan… if we can sell for 100k average for our portfolio and we will have achieved at Plus 20% NNN NET NET NET no baloney no LLC no traveling cost etc to our investors…Plus we will make a nice profit on each one… Love it when the plan comes together so nicely…… That will be a happy day sending those checks to my investor partners…Only when they win do we win… As for our investors… Never a worry never a phone call about the property just the same boring check wired into their accounts each month like clock work…. Never talk to a property manager… E mail me once a quarter for an attaboy or hows it going … I just love this scheme I really do… Ok off to an Investor lunchin where I am guest speaker…..
Lets keep the pressure on Atlanta and keep those prices rising… The US companies are doing it in a big way now.
JLH
Although I am judging by pic alone
Looks like nice one to me
Alex,,, you are a lethal weapon
TZ
For certain the average OZ investor has no clue how dangerous our Ghettos are…
And not sure how it is in OZ IE are hand guns legal or not… But you just never know when some gang banger is packing a 9mm and is going to pop a cap into you…which usually leads to death.
The number one cause of death to the African american age 15 to 25 IS MURDER by GUN… This over sickness car wrecks etc.
JLH
streamline
What your realtor is referring to is a blanket line of credit…This is only going to come from a locallly owned commercial bank you will never get one from a big national bank
Credit rating is not the issue… its non foriegn citizen… I have sold properties to foriegn citizens that moved here and got their loans for owner occuppied no problem
And second homes. same way.
but rental properties there is really no way. the reason being the banks would have no one to go after if you stopped paying
and 50% of the foreclosures are from rental properties IE landlords ripping rents and walking away from the property. this happens for mainly one reason… Cash flow is never what was expected and being a landlord is far more difficult than imagined
so they walk and stop paying the mortgage payments, yet stil collecting the rent.Joel,,,
what do you mean something goes wrong with the property in one year….
All the proformas from the marketing companies show little to no maintenance reserves and or vacancies are you saying something could go wrong?
Mihovi
Not to split hairs and since I am 95% bald I have no hair to split… or at least I can spare…
Atlanta Metro is 3 times the size of Detroit… and Charlotte is probably close to the same.
its really comes down to price…… and demography…
The exception to this is small mid western towns.. And even some small Western and Eastern towns…
You can buy a nice little house in some small town in Oaklahoma for 10k that will rent for 400… never have a worry about vandalism etc etc… But there is no Cache' there and no up side… there are thousands of these small towns from the rockies to the Eastern seaboard were this is possible.
I have started to invest in one I like… I used to make loans there now I am buying.. And I just bought a nice older duplex for 4500 and it will take about 10k to rehab… Each side will rent at about 375.00… No real upside but nice cash flow and no vandilism and or ghetto type problems town is 97% white with the rest mex and Black…… and some white trash which as we all know is just as bad….I have not decided yet whether I will bring these into the TWH family of properties.
JLH
Alex Nigel,,,
this goes to a philisophical point…. And Freckle would like this….
Alex is 100% on about US investors shying away from certain markets detroit being one… And again its inner detroit but inner detroit is a huge area…
So where do you think Detroit would be right now if foriegn investors especially the GB companies that set up there… If these companies never went there…. You would have a town in even worse shape… financially and another probably 20,000 vacant homes there is already 45,000 homes in Detroit that could be knocked down tomorrow and there is still plenty of housing for the population…. Towns shrink,… industry moves,,, The whole Rust belt did this when steel manufactors went off shore…
Or small one industry towns the industry closed up,,, there are all sorts of cities and towns that have had this happen to them over the past 50 years nothing new here.
But at the end of the day its a false market… when and if the Off shore investors decide Detroit proper is too dangerous and stop buying there whats going to happen another huge crash… prices of these homes are already Sub 5k to the wholesalers that are providing these to the off shore marketing companies…
These houses over time will just get shuttered and knocked and burnt down is what will happen…
And no amount of money for one investor will save their investment in these areas that are dead or have been on artifical breathing which is what I call the off shore investor that buys in the hood… you had a dead patient now you put them on life support they can live forever but at what cost.. and when should you pull the plug, these areas are already brain dead….
leonR
Leon,,, Downtown detroit has actually improved since your day,, GM built a big office building and I think it Harrahs built a big casino.
And the police are there in force one on horse back on every corner.. So the downtown core your relativly safe in.
go a few miles and you do not want to be alone at night regardless of ethnicity…..
Investors buy these on a hope and prayer and they just really want to beleive that a nice 40k brick home in detroit that looks great on paper will be as stable as an investment in other areas…
Each city in our wonderful country has its Ghetto hoods, whether they are white , Black, Meixican, Vietnamese, cambodian,,, Korean, Cuban,
and the list goes on just depends on where your at in the country,,,,
The very most violent crimes right now in the US are at the TEXAS Mexican border…. Its mayhem there… Yet dallas and Houstan investors like…. So its area specific for sure…
Slums are slums are slums no matter where they are at.
Alex now your talking Aussie language rentals by the week
… I think in OZ they do it by the week because they pick up 4 weeks of income that we lose here in the states renting properties by the month… Its brilliant really the weekly rate…
Weely rent in the US is synonomis with a boarding house type environment or a motel that has been tuned into weekly monthly rentals…. just have to really stay on collections not something that a out of area owner could possibly do well at.
If your trusting your investment to a 3rd party property manager then and your marketing company has no responsiblity to the properties long term running costs.
then a physical inspection is warranted… Its really just rolling the dice on these low end properties.. You could get lucky you could have a nightmare.
… 
