Forum Replies Created
- quickchick wrote:Well, lawsjs,
I'm not sure whether to defend ourselves or not even bother.
Anonymous people with a largely unknown track record, apart from what they have chosen to disclose online, are ok to throw mud at people they do not know.
And people like us who have and are, putting a lot of time and effort into specialising in a new investing area in addition to a long history of success and education in Australian property, should have an even playing field.Let me start by saying, I think it's great that you have invested leveraging off someone else's knowledge. A wise move, as many will agree. I have no reason to have any problem with your US agent or the service she is providing, although I do not know her at all.
Our lack of experience is relative.
If you are familiar with the steps in becoming an expert, they go from not knowing what you don't know, to finding out what questions to ask, to learning from personal experience, and applying their ongoing knowledge to explore further questions as they arise. We are partnering with, and being mentored by, people with a proven track record on the ground. We are learning new things every day. Dare I suggest, our ignorance is way more aware and well advised than others'. And no, I am not throwing that as a barb to you personally.
Our connections can save people time (how long does it take to arrive in a new city and meet competent rehab people?)
They can help people earn a good profit with well-managed risk, and we will keep them updated frequently and personally monitor the progress. All work is done with registered contractors, and our clients only buy through qualified realtors who have expertise in their field. And the property is in the name of the client's LLC.
We are on the ground, and have the knowledge to research all of the requirements for a good cash flow property. We are driving through neighbourhoods we have already researched, and already have very good personal knowledge through our 16 months of research and personal experience in this market. We will not misrepresent any investment for the sake of making money from someone, but will only put forward a deal that we would consider worthy of our own purchase.We are not charging any upfront fees.
I take issue with you slamming our endeavours with no knowledge of us as people, as investors, or how much work we have put into this venture. And as to our posts conveying a lack of experience, an E2 visa is not only about investing $100,000 minimum in USA. It is about employment created in the USA, about leasing space, about a business plan that US immigration considers is likely to be boost in some way to the local economy.
I could go on.
Last but not least, we are honoured to be insulted in the same paragraph as Steve McKnight.
Ruth
propertyinvestingusa.comHi Ruth,
I am curious,,, If you cannot hold a job… and your not a real estate agent, and your do not charge up front fee's how do you make your money????
Are you buying your own wholesale houses then rehabbing them and selling them to others… ?
and how are you making out with the huge competition there in PHX I know the market has really moved in the last 6 months and rental yields be them gross or net are far lower than they have been in the last few years….
However for this to happen means there HAS been some capital growth… What the question is is it just the heard mentality, with no real basis under it… I know the Canadians are buying the heck out of the area.
Rental vacancies are defiantly and issue though in this market for lower end properties…
My good friend from Oregon has one of the bigger PM companies there over 1000 doors and its an issue he has picked up a huge swath of clients because of so many vacancies.
But I suppose a lot of the Canadians are really buying second homes and really do not care to rent them at all just want them avaliable when they want to get out of the frigid weather.
So anyway just curious on your revenue model if you care to share…. I am sure those considering using your services would like to know how your compensated.
As a licensed Mortgage Banker in the US… I can tell you in 2 minutes what you have if you care to scan and e mail me your documents.
Mortgage investing in the US is as big a bizzness as buying the asset… Same caveots apply though, no thy people who your doing bizz with,,, check the collateral, check neighborhoods etc.
If we were looking at a fraud scenerio here this is how it would play out.
Nice Spruiker comes to you with what is a really great theme to Ozzies some very very high interest rate that gets you excited… why invest in something for 8 to 10 heck I can get 17% no problem.
This person talks a great rehab and flip game ( remember I have done well over 2000 of these loans in the US the exact transaction you did) and i have been fooled more than once as well so don't feel alone.
I do not know the dollar amount your talking about.
but if it was a modest investment 20 to 50k or so.
I suspect the property was probably bought for wholesale,,, and that the Spruiker in this case never did any work… probably pocket half or more of the cash you front originating this Lein over the property and has just gone walkabout never to be heard of again…
Your collateral maybe in one of the not so nice areas of the US in need of a lot of help and or be so far gone as not worth putting any money into trying to foreclose and take the property over…
so thats worse case scenerio.
Best, is you just have a little communication problem… this reputable wholesaler flipper that you lent money to, will be getting to you really soon,, the house did not sell for some reason its fully rehabbed and rented and it will just be days before the rents are put into our account. ( which unless you have an assignement of rents clause in your Deed of trust or Mortgage) he is not obligated to do this.. He is just being the good borrower and offering it.
So probably somewhere in the middle I imagine is the story.
Like I said if you scan and e mail me the Note and Deed of Trust or Mortgage that was recorded over the property I can tell you in 2 minutes what you have and what your next steps would be… Also include the address so I can see where in the US this loan was made and if its in a good enough area that would warrent you spending any money chasing.
If the loan was in a Deed of Trust state its very simple straight forward foreclosure,, Like GA takes 60 days and 1500 buckaroos and you have the property back… New York it can take 3 years and thousands… florida same.
If you can get to the borrower there is also a document called Deed in Lui of Foreclosure if you can get him to sign it and record it your done as well property is back in your name debt is extinguished. Try not to use a quit claim deed that can cloud the title going forward.
I will leave my e mail below if you wish me to assit you in the basics
clairvoyance Mr. Cheeves
Cheeves
Interesting,,,,what I saw on some of Steve Mcnights buys were Mobile homes and single wides at that for dirt cheap.
But put those mobile homes in a nice Mobile Park and that is one of the better investments in the US… the ones that run really well and have great upside and such will trade at a 4 to 7 cap rate max… You can find MH parks for much higher but they usually have large vacancies or are all trash tenants that are really hard to collect from.I have owned a few over the years can’t say I have not,,, there is no financing for them. and they are tougher to maintain because parts are not standard and there is little to no upside and attract the very bottom of the tenant pool which is never my personal desire.
I think we need to remember that the market in Lehigh and coral got all the way up to 220 to 250k then had one of the great crash’s of all time where these house’s got all the way down to 30k like the few I bought a few years ago…Of course you had to buy them direct at auction at that price… Most investors could not get them for that price,,, I sold my two in the 70’s to GB buyers… After pay rehab and 3 layers of marketing guys… One in florida one in Detroit and the guy in GB tacked on 10 or 15k… those GB resellers are really agressive in what they want to make.
I think the theme here and of course I have been preaching it for as long as I have been on this site, is to buy better areas, you see that in what Alex is doing,, now your doing it…
And others will follow as they read about the trials and tribulations of buying the lowest end properties in the US…
emma171 wrote:I wouldn't touch a house at auction in GA…. Not a chance in hell…. Subsidence? Structural, termites and just a different breed… Vegas is so much easier… I might add that I have since the above also realized I do much better at REO purchasing….. By miles… In Vegas I used to laugh at how many we're just crazy over bid on ….. I will hit auctions now in Vegas when the REO's go.?… I will take my blow up pool and iced drinks though!REO's are down in Vegas with senate bill 248
Once they work that through there will be a lot of them.. there are over 250k mortgages in Vegas proper that are 30 days or more deliquent
courthouse steps buying is a business like any other,, very hard to make it a part time or passive investment… YOu need to buy some volume to average out your good ones with your lemons.
I have seen a lot of strange things at auction but never a blow up pool
Here in Oregon where its raining all the time its more like and umbrellas
but you do realize its getting competitive when mothers come with babys in their strollers and 200k in cashiers checques
emma171 wrote:POSTED THIS BEFORE AND VERY OLD INFO BUT A GOOD STEP THROUGH….In Atlanta you just have to add termites to the equation……
Version:1.0 StartHTML:0000000149 EndHTML:0000014617 StartFragment:0000000199 EndFragment:0000014583 StartSelection:0000000199 EndSelection:0000014583 This is an update as to the auction procedures having now sat down with the title agent who has been emailing me the list of liens and upcoming properties. This email is to provide you with as much information as I have (any errors are with full disclaimer that the below is given to the knowledge I have at this point). It will hopefully allow you to make grandiose decisions as to whether this may be a route for you. Remember, there is no real estate agent involved with the auctions – nor are their contracts – this is walking up, buying a house with cash up front, paying off any liens, getting title, cleaning it up, fixing it up and renting or potentially down the line flipping etc.
Now those steps explained in detail:
- The properties that are sold at auction have the potential to be great bargains.
Example: 1905 Emerald Green, 89106 went under the hammer for $40,100 at auction, 2 days later it was listed back on the market for $52k. 1925 Emerald Green was a bank foreclosed property that, whilst 100 sq ft bigger needed a lot of work and was listed for 64k… Just 6 doors down!
- There is NO due diligence time frame, no inspections, no walk throughs, no anything… You can peer through the windows and guesstimate from there. The roof could be collapsing, the a/c may not work, squatters could have broken every single item in this property and you should probably assume they have.
- We do not know for sure which properties will ACTUALLY come up for sale on the day, we have a list that we subscribe to that tells us up to 2 weeks out which properties are SLATED to come up but we do not know at this point:
- whether there are known liens that make it inadvisable to bid
- whether it will be postponed
- what the Trustee’s opening bid will be – which may be 20k over any rational bid you would want to make….– the Trustee represents the primary lien holder… At this point, title is actually still in the Owner’s name who is being foreclosed on and as most of you know, this is the final step before title reverts back the bank and, if the property is passed in at auction. The auctioneer will call initially upon any beneficiaries of the current owner as to whether they wish to bid, they will then say the Trustee’s bid is “x” and if any other offers…. If none, this property will officially become a foreclosed property and appear as such ultimately on Yolanda’s list.
- The night before the auction, we receive the list of known liens from the title agent that provides this free to those who are willing to use them ( – I am happy to make that swap!)… This will be as close to a preliminary title report as you can get and with the exception of HOA fees (which it is NOT recommended to bid on as apparently you should always triple the amount of $$ stated on the lien) the agent felt comfortable that it is highly unlikely (although not impossible) for a big unknown. He has said that National Title Agency will guarantee that you would not ever lose money on your purchase as a result of a lien not discovered or revealed… You may not make any money but at the worst case they would have too much to lose based on that. These and any other liens discovered must be paid off by the successful bidder during escrow* before clear title is presented… These liens will show up on the closing statement provided by the title company handling escrow* (*rough approximate is “settlement” time frame in Australia handled by a solicitor).
- On the day of the auction, the properties come up in random order – there are between 100 and 150 each day and you just have to sit there, listen carefully to the auctioneers very very fast prattle and wait and hope. Any of the following may happen:
- The property is withdrawn from the auction (lienholder and owner having worked a deal)
- The property is postponed from the auction (twice I have had that happen whilst on my “dry” runs)
- The trustee starts with an opening bid that is waaaayyyy too high (think reserve price by bank)
- The beneficiaries of the current owner comes in to bid on the property
- You are outbid
- You win
- To BID at auction you must have a representative acting under Power of Attorney (POA notarized) for and on your behalf with the POA held in the name TITLE WILL BE IN – if that is under an LLC you must have the POA made out to the LLC etc…. POA would in this instance be granted to SelectUSAProperty LLC and be highly limited!… That POA would either
Have cashier’s checks IN THE NAME THAT TITLE WILL BE to match up to the full and total amount of the winning bid – the POA will sign these to the Trustee and be given receipt … This should be to the PRECISE dollar (no change) – so the object of the exercise is to bid by a minimum of 1 penny (1 cent) above the bid before…… Trust me, I have seen these things go to 81 cents to win!
- EXAMPLE: The maximum you decide you will bid up to on Property X is $50,101.51. You should have cashier’s checks as follows: 3 x 10k, 4 x 5k and 5 x $20…. Take $5.00 in small change as well….
OR….OPTION….RATHER THAN HAVE ME PHYSICALLY TAKE THE CHECKS….:
YOU CAN USE A COMPANY THAT RESIDES IN THE SAME BUILDING AS THE AUCTIONS TO HOLD YOUR FUNDS….Their name is: US LS…. They are a Licensed Escrow Agency – the president is a guy called Mark Gross. Their website is http://www.usls.biz <http://www.usls.biz> and his email is [email protected]
… From what I know they would work like the trust account at Silver Canyon… The company is licensed and bonded and charge $300 per transaction… So, let’s say that you deposited $75k with them and gave SelectUSAProperty LLC POA for a property that you won at only $60,500k, they would charge you $300, cut the check for $60,500 and you would have a residual balance with them of $14,200. You can log on to see this balance etc. Please note that I do not have ANY personal experience of this company and can not vouch for them beyond knowing that some of the wholesalers are using this company as their fund holding mechanism. Please do due diligence – they are bonded and insured but I am guessing so was Enron!- After the hammer drops – assuming you are the winner…
- You are presented with a receipt (Actually immediately after it would be presented to the representative from SelectUSAProperty LLC … Me… )
- Receipt is taken up to the title agency company to open escrow (situated in the building inside and upstairs from where the auctions are held) and open escrow just as “normal” as we do with a foreclosed property – in 7 to 21 days you will receive the deed, we take the deed, clear and pay off any liens, pay title insurance and other title closing fees and title is then transferred to you…NOT INCLUDING THE LIENS, BUDGET $1250 for TITLE COSTS AND TRANSFER FEES INCLUDING TITLE INSURANCE (protecting you from any further liens etc) on a property under about $80k
PERSONAL OPINION ONLY ON STRATEGY (IE DO NOT NECESSARILY AGREE OR FOLLOW THIS AND DON’T SUE ME FOR THE BELOW….)
… Strategy is the BIG thing… If you choose to go down this path, and please this isn’t for everyone – NO DUE DILIGENCE is massive…Firstly…there is little point in trying for just one property…the chances are it doesn’t even come up! Basically about 2 weeks out my personal recommendation and thoughts that are merely OPINION only is:
- Choose zips/areas/age/type of house that you either know well or discuss with me
- Pick 10 properties from the above that WE KNOW WELL – we know what has sold, we know what it rents for, we know the street, the neighbourhood etc… And ones that you would feel very comfortable bidding on that are slated to come up 2 weeks out do as much indirect due diligence as possible on these in that time frame including me attempting to peer through any windows, talk to the occupants and ask if I could take a peak etc (they may WELL still be occupied)….
- Choose CAREFULLY the MAXIMUM BID you would make on these…. I tried to think of it like this: The MAX bid should be calculated roughly as:
- what is a known BANK FORECLOSURE COMP on that street or close to (not MARKET… We don’t want market comps, we want a bargain compared to bank foreclosed – or at least come in on par)….
- Calculate backwards ASSUMING THE WORST as per the following:
- Clean Up – these aren’t tidy houses – these have tenant leftovers/garbage in them…. $1,000
- EVERYTHING broken or needing repairing:
- A/C = $4000,
- Repaint whole house = $1,200,
- Carpet = $1,200,
- ALL appliances = $1,200,
- Light fixtures/labour, broken heaven only knows what = $1,600
- New garage door and opener = $1,000
- New Water heater = $800
- TOTAL = $12,000 = your max bid is a recent equal bank foreclosed comp less 12k!! That probably gives you something BETTER than a bank foreclosed because even the foreclosed properties need about 4k of work!
- Assume that of these 10 that you have mulled over for 7 days: 3 will have cost prohibitive liens, 3 get postponed, 2 have a Trustee starting bid over your maximum and 2 may actually go to bid….
- Further assume of those 2, you get out bid on at least 1….YAY… You MAY get the chance of buying one but you have no idea which of your original 10 that might be!!!
- Make your bid (in increments of 1 penny or 1 cent over the person before you!), stand firm to your maximum amount and cross your fingers. I personally feel that we are retail purchasers – the wholesalers HAVE to make a mark up and I feel that is our edge… We aren’t there for that so we SHOULD dollar for dollar probably have the capacity to outbid them
Emma,Great post couple points of parlimentary procedures:
1. State of GA has by law 45 days to send the Trustees deed to the buyer and they take much longer in a many cases I had one that went over 90 and know of others that have gone over 6 months…. Never had one in 7 to 21 days… those are west coast time lines…..
2. Not all Trustees will take checks made out to an individual and then signed over… I have won many sales because I had my check correctly titled… Some will only take the check if its made out to them.. Or some other nominee they name,,, you find this out with experince. Here in Oregon there are about 10 different services and they are all different you just learn who wants what.
3. The trustees sale wipes out virtually all liens,,, Its a big argument over HOA fee's some I bully and get them wiped out others we have to pay,,, all other liens are extinguished that are junior to the lien being foreclosed, Except IRS and or State income tax liens. And then these liens will sunset in 6 months if the IRS or State does not redeem the property, In over 500 foreclosures I have bought over the years I had only 2 redeemed by the IRS. And that is because they had Massive true equity,, IE I paid 22k for a house in Washington that was worth over 400k… And even at that I just paid an additional 180k that paid off the IRS and I still got the home… Same with the other one.
4. It will take you a week to 10 days in GA to confirm you have a good sale… Homeowners attornies are notorious for filing BK the morning of the Trustees auction… If that happens to you they just mail you back your check.. they do not owe you anything…
5. If you have a holdover owner or tenant there are new federal laws dealing with these… If its a tenant and they have a valid lease that they keep current you just can't boot them out.
6. As for having cash with a custodian I would think you could get this done at a bank for free… Just notify them to have a cashiers check made out to who ever and give them the name of the person who is coming in to get it.
Have them check ID and your done… This is why I ALWAYS make my checks out to the attorney or Trustee services if not other wise specsified… Not to an individuals name my included ( again because some trustees with not accept an endorsed check) and the person who has your money has a check made out to an attorney or US trustee there is no way they are going to steal your money,, If you do not get the bid the check it returned, If it is never returned it can't be negotiated and you make a claime for lost or stolen check…( never had this happen of course)7. As emma pointed out,,, you will RARELY if ever lock in on a property and buy that specific property for the reasons she mentioned,, YOu have to have perramiters and pick what comes up… Never know when someone comes out of the wood pile and out bids you… or like emma says its postponed, etc etc.
8. Comman rookie mistakes
1. bought wrong property.
2. bought a second lien thinking it was a first… And there is no do over you hand over your check its gone by law.
3. Property is so thourghly trashed that your 12k rehab is really 30k and there is no profit.
4. Major structural problems.
5. If you were not aware its on a well and septic either of those could be bad and house is not livable.
6. Undisclosed Senior tax defferals that you never knew about and only learn about when it happens to you the first time.
Its a fun exhilirating game,,, and you would be surprised how much money will be sitting at one of these sales.
when its GA and once a month.. and a hundred or so props are going there will be 50 people plus with a few walking around with a few million dollars in checks.. there could be 10 million plus in buying power in this one spot….Good ole boys… Got to watch out for the regulars they will try to control and dominate the sales and manipulate who buys.. If they see a newbie competition they may very well bid up every house this person bids on just so they will get discourage and quit.. Even to the point of buying houses that make no money,, The newbie gets frustrated and pays too much or buys a dog and has a bad experince.
In my mind to play in this game you need to have 500 to 1 mil in cash that day and ready to pull the trigger,, be happy with your winners dump your losers and call it cost of doing business because everyone buying at auction will buy a lemon, thats a given.
VideoInspectors wrote:The topic of this post is why I started my business… Several years ago a UK Investor was referred to me because they had been taken advantage of by not only the company they had purchased nine homes from, but also three property managers in 18 months. The investor had $400,000 tied up into 7 vacant homes in need of rehabs and 2 occupied homes that were in need of repair… it was a very bad situation. I worked with them by providing video inspections of their properties, helped them find a new property manager and a reputable contractor. We went out weekly during the rehabs to provide construction update videos and long story short this investor managed to turn things around. Anyone investing in the US needs an unbiased advocate that can be their eyes and ears in the market place. The US market has some great opportunities but it also has a few unscrupulous Realtors, property managers and contractors. Here are some suggested guidelines… 1)Be sure to always have someone other than your Realtor inspect the property you're thinking about buying. 2)Just as important as the property have a clear picture of the neighborhood you're buying in 3)Do a great deal of research on the company you're buying from. 4)Make sure the taxes have been paid 5)Be cautious if the company wants to place the property in a LLC and then sell you LLC instead of doing a real estate closing 6)Always make sure the property has a clean title / title policy. Be careful and good luck!As well as why I started my company TWH because i saw countless hundreds if not thousands of California investors getting totally hammered by the nice turn key company and there hand picked contractors and property managers.
Although I got to say these us guys have nothing on the GB and OZ spruikers out there,,, the US guys if they acted as some of these OZ and GB so called property providers marketers or whatever they would be sitting in jail right now. As the FBI would have gone after the ones that are US citizens for sure…
google Northwest Trustee Services… it will give you a link I hit the link I provided and Northwest site came up if you scroll down a little.
Foreclosure.com is more of a zillow type service just general outdated info basically.
Northwest Trustee is the actual Trustee that Sells the property you make your check out to North west trustee when you bid.
for instance in Georgia its all Attornies offices.. These trustees are all attorney owned just fyi.In some areas you can hire bidding services.
Like I bought 2 foreclosures in Lehigh acres a few summers ago… Bidding service was 5k each.. I picked them up for ;mid 30's and flipped them to GB buyers. Pheniox you can find them for 3k or so…
they are hard to get a hold of as of course they get inundated,, and you want to be very careful because your sending the whole purchase price for the house over in Cash… so as I think about it its probably not a suitable route for OZ,,, Unless you had a really good feel for the people your sending your cash too… I can just see it now OZ spruikers setting up bidding services OZ investors sending them money and these guys walk off with your hard earned money and never buy anything…
However you can come over here and bid for yourself…This is were the better capitalized companies get there deals.
JLH
maybe there should be a spot on this site that has the most common links in the markets that are attracting the most interest.
One could look for their city and wha La there is 5 to 10 links,,, county GIS,,, county tax Assessor, Public MLS, Zillow and Trillia ( even those are notorisly bad for true values they provide other details) On line trustee services where you can see real time foreclosures just like US investor see them ( some of these you have to pay and join to gain access others are free.
one that I think the audiance would like to check out is:
http://www.northwwesttrusteeservices.com
just go on sign in and play around you can see whats happening forelcosure wise in the Pacific Northwest and other areas they service.
Just remember this is just one of Hundreds of companies that prosecute foreclosures in the US….. But these are the true sources of these foreclosure deals… these are the guys I buy mine from this is what buying a bank foreclosure looks like, You do not buy direct from a bank you buy from one of these services the banks hired to cry the sale at the steps.
Let me know if anyone likes this would like to get some feedback
Agreed,
this is why when I get my portfolio to a certain size I will only carry liablity… Much cheaper to self insure against fire and other malicous things,
Plus we have a standard of care for our properties that no property manager can come close to duplicating, since we only manage what we own,,, we are right on top of any home that has any issues or would be come vacant.
Problem you can have in the US… Is you can have a tenant leave, not notify you and the house has sat vacant for a week or two and thats all it takes for your condensing unit to take a walk,,, maybe kids get into it.. etc etc.
In the inner city type properties it can be hours literally,,
Even in our nice stuff in Atlanta we do not bring in any heating air condition, stove refer diswasher etc, until the day the tenant moves in.
Its a real issue here in the states… there are places its not an issue like here in Portland Or… or better parts of any of the bigger cities but you have to be in 200k or so and up housing to get that security…As there are mainly homeowners watching out for each other.
WI,
Be EXTEMELY careful of a vacant house…Most policies have an exclusion after 2 months. and some 30 days.
I am sure you will read the fine print…. Many an investor has had a bad day when the insurance company denies their claim based on vacancy.
JLH
TZ,
Nice to see the forum readers are realizing how much data they can get for free on line,
I suppose you went to the Public RMLS website put in the address and up popped the property as pending… Probably to a local wholesaler then being sold through the normal marketing channels… And being pending @ 40k does not mean it will sell for that. Pending is only the last listed price it could have sold for more or less than the pending amount… Only realtors who are members of the MLS have access to the Sold data.. And or the counties GIS system but usally depending on county takes anywhere for 2 to 6 weeks to update.
Assessed values have no true bearing on properties value either being too high or too low…
wi
send me an e mail we have 200 plus doors I work through this weekly be glad to help you
JLH
mattnz wrote:Thanks for the advice Jay.I am a developer here in Australia, (not a builder however). I’m currently getting 30-40% net margin on costs, but don’t see this lasting much longer. Would the banks lend to me as a foreigner for development loans, or am I looking at hard money loans? If you could PM me any contacts, that would be much appreciated.
Thanks,
Mattthose are stellar returns… take a look at this website http://www.americanrealestateinvesting.com this is a property that I have in Oregon
You will see Intel’s new 10 billion dollar facility within 1 mile… its a path of progress play.. but returns will be 10 to 15X on the dirt and many times that as we build it out… Its too big for me to build the whole project,, we are likely to get about 750 doors…Plus a commercial project.
let me know what you think?
JLH
your timing in certain markets for dirt to build able lots could be good.
doubt you could get a loan….
as the only banks that do these kind of loans are local commercial banks,, and the feds will only let them lend to clients that live in their lending footprint… this is not hard and fast rule but I would say i am 97% correct.
Much like business is done in Mexico you get a US partner..
my e mail is below if you wish to contact me… I would be happy to have a 15 minute Skype chat with you and give you a road map..Alex,
investor financing is there for US investors.
the major difference is underwriting the files.
the borrower needs to be much stronger than in the past, not only with credit score but with substantial cash reserves.
If we recall people in the US were buying houses that had for all intense and purposes NO cash and NO reserves.
Add in the marketing companies in LA and the wholesalers touting the turn key aspects like we all talk about,,, These investors just thought they could buy these houses as investments and the first time they had an upset, like trashed houses or vacancies they did not have the cash to carry through… then the foreclosure cycle started… Lenders got crushed and we all know the rest of the story,
So now the lenders want to see experince, a lot of times they will not lend if the borrower lives more than 100 miles from the property,
and enough provable cash reserves to carry all the investment properties for 6 to 12 months…. Because the banks know from experience that rental income is anything but reliable in these investor areas.Then there are banks making loans on these properties but will not loan to anyone buying from any kind of turn key company,
And these bank know who they are; they just will rattle them off
Marshall Reddick
Memphis Invest
Jacksonville investors.
Detroit urban wholesalersAnd anyone buying from any UK or AU company by and large….. caveat the lending that apparently is happening in parts of texas…………
Location location and then location will determine future values.
from what I have seen in the last year what AU. investors have bought IE super cheap ghetto cash flow homes that will never be cash flow and will only be money pits.
I think the lots are a nice alternative…. NO cash flow but hey you can buy 5 to 10 of them for 20k or less.
No management issues short of maybe mowing the lawns 2 times a year.. and or keep people from dumping rubbish on them.
but make no mistake there are literrally millions of lots in the US at this price that will never be worth anything other than to a slick marketing type company
IE many parts of florida and high deserts of CA. New Mexico,,, AZ….
What I personally bought was 7 lots in Henry county GA,,, in a subdivision that is 3/4 built out and the homes sold for 350 to 425 in their peak… So those familar with this market know these are really nice homes.. they are now selling in the mid 2’s..
I paid 4500 per lot…. these lots sold in the peak at 60 to 80 k they are shovel ready. I could flip them today for 10 to 15k each with absoluty no problem… My exit is 30k…. Holding cost for all lots are maybe 200 a year each….and or I will build them out
bulders are snapping these lots up and have been for the last 3 years..this is why you still see new construction in Atlanta 4 billion of new homes are being built there this year…. prices are lower because they got the land so cheap.
Same thing with what I am building in Oregon,,,,, We are buuying lots for 100k less than they sold for in the peak…. pricing the same home 100k lower than the peak and we are selling as many as we can get up and we are making nice margins. With one project we have 100% bank leverage so our return on investment is infinite.
I am closing on 26 lots next week for 25k each in Oregon,,, these peaked at 75k…. bank is making us put 50% down on the land so 300k to get in then will provide 100% of the verticle financing 4 starts at a time. These homes sold in the 225 to 250 range in the peak,,, we are building a little smaller and selling at 159 to 189k with a solid 20 to 22% net profit per home after all costs.
Bottom line for me is: from the OZ perspective
If you are considering buying some super cheapie house that is just going to give you fits as oppossed to buying some well placed lots… I thnk I would recommend the lots…. YOu will not lose money, on the house you have a very good chance of lossing the whole investment if you buy any of the many cheapie houses I see advertised in OZ
AREIJoel wrote:I am hoping that people will not lower their criteria to still chase the 15% + returns in less fundamentally attractive areas.This is where the herd will get slaughtered in my opinion.
There are 3 phases in any new bull market, and I think we are entering phase number 2 as we speak. The smart investors have all positioned themselves in well in phase 1.
Phoenix, florida and parts of Atlanta are beginning to dry up. The amazing deals are getting harder to come by.
As long as Aussies realise they have probably missed the extreme value buys, and are prepared to take a small hit on yield, it will be ok for maybe another 12-18 months
Joel,
A lot of whats happening is the bigger wholesalers are rebooting their business and holding instead of flipping,,, the light build has gone off, the largest wholesaler in Atlanta Key properties last month stopped their entire flipping operation, they got an institutional investor that came in and allows them to hold,,, its takes obviously a very large bank roll to hold properties when their is no financing. But with the big hedge funds moving in this is a reality,
Colony Capital, for one The Columbia endowment ( 500 homes Pheniox) Colony is looking at Atlanta,,, Another fund larger than Colony out of Silicon Valley is hot on it,,, I have had extensive talks with them….
And all these companies will buy for 3 to 6% Net Yields which will allow for some move up in price…Will they buy Detroit NO,, Will they buy Rochester NO,,,reason being there is no real hope of upside in those markets. Like there is in others.
they will concentrate on the big 10,,,,, CA being number 1,, then Florida, Pheniox , Vegas ( because they all like to go there) Atlanta is on some radars, CA, is really 3 markets,,, So Cal the inland empire and Sacramento and San Juaquin valley,
As a hard money lender in every market your company works in, I have had a pretty special view of the business, and came to the realization 24 months ago that we need to hold not flip, I fully understand brokering houses like you do and the flipping business..
All though in my ever it to be humble opinion here is whats going to happen,
1. PHx like you said hard to generate deals there where you guys make money the wholesaler makes money and the investor gets the nice gross yield the turn key guys advertise… so that market will need retooling or be retired for OZ marketing companies.
2. Atlanta not quite as hot as PHX but a lot of pressure we are still getting our deals but we are 2 players closer to the deal than any buyer and or marketing company , I bought 8 homes last week all great deals just like last year sub 40k for 10 year or newer,, Would I flip them heck no I am keeping them to hard to get.
3. Memphis,,, will always be a market there, tough town to collect rent,, will always be the investor that walks away,
4, KC same if your buying in 25% gross yield areas your buying in the low blue collar rental areas of that I am positive. So this market will be there for years to come.. as the landlords fail investors pick up the houses and cycle repeats.
5. ST. LUis very rough and tuff town,,, in the high yield areas can be as dangerous as detroit. Ditto KC
6. South chicago same thing,,,,
California has and will always be super popular with the Chinese, they invest completely different than OZ investor OZ investor cannot compete with chinese because of different buying reasons and emotions,,, Chinese its status,,, OZ its all about Yeild, thats why they will invest in the worst of the worst US cities not worried about status and style points.
INdy is a tweener I have done hundreds of deals in Indy and am loading up on my hold properties but I have a partner there that is really really sharp,, we are not neighborhood specific we are street specific a lot of re gentrification going on…. But buy in the wrong neighborhood and its just like Detroit..
then you have the Pacific Northwest were I live,
completly under the radar,,,,Smaller markets but probably the closes to OZ in the way the property management runs… As in no headaches tenants stay for long periods,, they take care of the houses many times my Portland houses are better than when I rented them out… But realize Portland is 92% white,,, there are no hoods or pockets of ethnic anything,,, the only ethnic are chinese and Indians that work for INtel or Nike….
Seattle is upper crust CA prices,,, Microsoft and Amazon land, and a faboulus place to visit in the summer.
JLH
Net yields which by and large are overstated by the sellers in the first place
Prices in a lot of cash flow markets could double,,,,,rents will stay static or could even decline as the big players move into sfr
Supply demand. Big volume owners will be looking at 3 to 5% true net yields and. Paying accordingly..
Great for us who bought at the bottom,,,,going to put a big squeeze on the turn key 20% yield players that are strictly marketing companies, it will be good tom weed some of those out is my thought
As stated above this will drive the unknowing into some pretty poor areas and properties.
I think I can leave my e mail
- The properties that are sold at auction have the potential to be great bargains.
