Forum Replies Created
I think one of the important aspects of this conversation as it relates to WI is that she has sufficient MASS or SCALE… I think she mentioned that she has 8 properties to date, So probably a 400 to 500k investment on her and her husbands part….
As well as based on what she has shared she has bought in the easier to manage areas of Atlanta and did not go for the cheapest thing on the market, And this is a big AND,,, last year is not this year in the market, All those who were trying to time the bottom well you missed it by and large at least in the Metro ATlanta market…WI I and others timed it well just because they made a decision to proceed…
So WI has again by what she has stated on the forum 8k to 12k coming in monthly gross ( if everyone pays) and or more.
With this kind of financial commitment and investment you have the scalability to run this as a little business… And here is my point I bet WI spends a pretty good amount of her month e mailing skyping and other management duties managing her managers. And running her small rental business… I doubt seriously that she just sits in her easy chair collecting her rents as is portrayed buy the Turn Key companies
And yes if they have to travel to Atlanta 1 or 2 times a year for the 5 to 10k a year that would cost, its just the cost of doing business. so you add in those cost to Property management, vacancy when and if she will have any,, and on going repairs… TAx’s insurance. etc etc. And its a nice cash flowing business, but it is a business and needs to be treated as one.
Where this model goes Squirrly is for the investor that buys 1 or 2 properties.. There is no scale and no mass.. So fixed expenses travel expenses they cut into the return in an inordinate % of gross rents… if you have one property and you pay 5k to come and look at it before you buy it. there went year one 50% of your rental yeilds.. add in other costs and your brake even or negative geared year one.
So I think the comparison to the TWH model for the smaller investor the one that would like to dip their toe… Is pretty easy,,, No need to come view your Note purchase as you do not own the property just the debt with equity, NO closing costs or any other fee expect the purchase of the note… And thats kind of how it goes in our market here in the US. I have only had 1 client actually physically visit there Note purchase out of over 5 million dollars worth of note sales in the last 12 months… I mean the CPA and doctors from Perth invested with us specifically because they did not have the time to spend 2 weeks running around the US….
At the end of the day of course the US welcomes the OZ investor and love it that they are coming here and spending money on properties hotels food rental cars… Airline tickets.. Although Qauntas probably gets the lions share of those fees.
Anyway something to think about.
WI:
Perfect,,,
thats my exact point.. by better properties and one has a chance… buy low end and its not the same story….
If you do not have the time energy or expreince that you do our Model is a great alternative instead of doing nothing.
And just like the US there are always those that want to do it themselves have the time to write skype travel deal with the day to day but if you don't and don't wish to then, I think we offer the next best option as oppossed to thinking some turn key operator is going to take care of all your needs… Depends on the person right?
next trip if your coming in our summer try the Northwest,,,, Hotlanta is just too darn hot in the summer…
Off to NYC today myself
JLH
Freckle as always great comments.
California though with all its trouble is still the number one target for US Captial.. and the cash flow is the lowest in the country.
Its based on history,,, and weather,,, and proximity to mexico.
I just spent last hour writing back and forth with my contact… We are honing in…. I relayed alot of what you said as well.
its a logistic s nightmare buying this volume of homes.. its not like buy 100 apartments units and having to redo them all.
thats why I only buy about 5 to 7 homes a month in any market it keeps me on top of whats happening.
I am thinking reading the Post about TRR and how they have done 300 plus homes in a couple years. yet reno's take 3 month or longer… they are just overwhelmed understaffed and really not very proficiant… So does not really matter what their fee is… if your hosue is sitting vacant for any matter of time its a SITTING duke.. and like what happend to this same client one house got trashed already,,, thats because it sat too long or the neighborhood was not the best.. big volume players will not always buy the best properties… So I have no doubt that some of TRR clients are on the luckyside of thier learning curse its the poor folks that have to pay for their learning curvee or basic lack of knowledge …
OUr teams average a lifetime in each market IE born and raised there,,, and that makes a huge difference when your cherry picking for our product I do not want anything that is going to get trashed… we protect our investors that way..And if there is a problem we pay for it .. never a cost to the investor.
these hedge funds are going to come… will be intersting to see how they make out.
JLHJ
Mihovi,,,
I hear ya,,, your first post said that you thought he was reputable.. and I am sure there is no way for you to know other than hear say…
AS you and I both Know the inside story, Richard Davies has been totally abused by Andrew and Jeremy and I can wholeheartily assure you they both knew exactly what they were doing, and I would have no doubt that Jeremy is not caught up in the PM fiasco as well.
This is not the first time I have seen or heard of this… I have been witness to other PMs who worked there company up to 200 to 300 units.. 200k a month gross income ,,,, And one day they say,,, hey this is 200k a month a few months of this and thats real money and off they run with 500k or more,,, happens more than we would like to know in the US>..
I know the OZ investors would just not fathom this… But you get into the inner city type thugs be them black or whites and you do at your own peril no doubt. Prison is full of them…
I deeply appreciate all that you have done for Richard,,, I know you have sent your people there to send pictures at no cost to Richard and give a true assessment.. I did not mean to paint a Jeremy burgess stroke of paint accross your bow…
<moderator: delete> now it appears that the rehabber which was probably his buddy just stole the dough.. Good possiblity the house was never rented and teh Prop manager never ran off with anything.. You had the black keetle calling the other black Kettle BLACK.. its a thang Yall.
I know I harp on this but if these folks had invested with TWH they would have had properties hand picked for them by their co owners that would stay in the deal till the end.. .Never ever have a cash call for any reason.. pocket 9% cash on cash after all experenses never need to spend money travelling her,,, never need to set up LLCs or do US tax returns… such a low cost set up that you add those basic cost into doing business the way you folks do them and that probably brings the yeild into the 11 range or more NET…. And not one freaking worry ever…. Still can't figure out why more Oz do not jump at this scheme and wish to take the total risks with really not knowing what they are doing…. Oh well…. Lucky me i have more US investors that I can handle.. But its almost like a chanllenge for me to at least get a few more doctors like the ones I got in Perth… Who understand risk reward.
This Hedge fund I am meet with today comes through and its by by baby ( thats what lon Simmons used to call a Willie Mays home run) now I am dating myself…. I will be too busy other than to poke around on here for fun….
At the end of the day though I really do not give a darn if I get any business from this site as i do not need it… but I have meet a few really special folks that we communicate and not all about real estate I give them travel advice and this like. And if Asked I will continue to help those who got into bad situations, I am good at digging to the truth very quickly and for no cost.. once I do that then its up to the OZ investor.. Just like the little lady in Phoenix who got royally screwed… I led her to a soluction but she thought we were going to do it all for free,,,, I worked for free for sure but the PM show was coming to the rescure to boot a free loader out of here house and turn him into the authorities because he stole 20k from here… She did not want to send 200 dollars to his trust account to pay for incedential fees. ludiricst really,,,then she rags on me that she thought this would all be done for free, not sure what planet she is on. we spent hours just getting her realtor to call her,,,, this had not happend in 3 months. I called and threatened her to her broker low and behold she reengages… what a mess.
any way nary a thankyou from this young lady she was pissed over the 200 dollars my Pm need to start eveictions…I doubt the matter got settle for 5 times that and her homes were probably were in even more desperite shape….
So one gets burned out trying to help and then get's lumped in with the spruikers.. when in fact she had me.. One of the top folks in the industry and my PM in Phoenix that runs almost 1500 units peronsally looking at her props.. Now you cannot get any better action that than.. but this aint the charity.. I will work for free guys on the ground need to be paid.. hey they are doing battle duty no doubt my man Bob went in with gun loaded and unholstered to confront this really nice tenant this really nice lady in ozz had.
I do not need any thanks at this point it seems it s not really in the oz culture maybe you feel pm and re agents should just do this all for free or something…
but you buy incitey hood properties and these are war zones with murders every day of the year its a special person who can work those hoods. 'and the biggest issue folks is they get scared and burnt out dealing with the lies and really tough tenant base.
JLH
Jeremy burgess despite what Mihovi says is not a reputable wholesaler as there are very few in Detroit in my humble opinon.
Detroit is just fraught with danger from all aspects.
We did 2 deals with jeremy and he showed himself to be of low character and not trust worthy..
In a flipping scenerio he will not give 2 hoots about your issues… And of course Andrew was just another long line of Aussie resellers that have no clue as to what they are doing they sit in OZ and trust THEIR GO TO TEAM all the while they have no clue as to whats going on.. how can they, they are 6k miles away.
we have a saying greedy people are pigs and pigs get slaughtered, this saying is so true in this low end rental yield business,,
As reputable business folks we hate to see something like this happen to Richard, but when you deal with non licesened people there is always the risk…
Wholesalers in the US are no better by and large,, <moderator: delete personal comment> but have no remorse if you lose all your money they are just selling a comodity..
Its the whole reason I started TWH… to make sure this would not happen..Of course the OZ investor does not get it by and large but he US investor does.
JLH
I think the lesson here is :
One ; WI from what I have read this year has traveled to Atlanta 2 times ( of course correct me if I am wrong)… So that is 2 to 4 weeks of travel.. this probably cost at least 3k or more per trip.. Not sure how many houses she owns.. but lets say she has
4.. and lets say her cost to travel and her other soft cost accounting lawyers etc. plus I am sure she has had some maintenance, and maybe a vacancy and maybe a letting fee. So this could all add up to 10 to 12k in one year.take the 4 houses in atlanta probably rented average 850 to 900 a month.. thats 3 months of income per house per year.
And this is the honey moon period, right after an investor buys them and rehabs them,,, maintenance becomes more accute there will be vacancies and based on her e mails she is hands on and will fly over to Atlanta to deal with these issues.
So yes the gross yeild is what it is
its what is the net yield I still do not get how the Aussie can think in any terms except Net yield who the heck cares what the gross is … Its all about net..Just ask the people that posted that bought 4 houses from TRR and have had Zero net yield and probably have had negative yield they will never come close to what they thought they would get,, will probably exit the market and I will bet dollars to donuts will take a capital loss..
WI will continue to come to the US and and have this over head,,, yes its a tax deduction but its still time and money..
Now if the market turns and we all sell for double what we paid for them you will recoup…
My point is the NET yields are just fantasy because you want to beleive
wait until WI has a condenser unit go missing or a house trashed,,, It happens to ALL of us in the business…..When you play in the Blue color trending to lower neighborhoods and if you do not know what that last statement means then keep your money at home…Please we do not need anyone else losing their hard earned dollars chasing a fantasy dream.. At least I do not need it.. Some spruiekers do and other johnny come lately OZ resellers.Its funny,,, any true investment property that is sold in the US no buyer will buy it without full disclosed Pand L for the last 2 years backed up by tax returns, Sellers disclosures and the like ,, I bet non of the OZ buyers even know to ask or know what these are. you have this whole SFR industry where every one buys on promises and data that is just bull crap to say the least.
JLh
Basically the hedge funds with by and large by properties where no OZ investor will buy.. because Oz investor is still deluted with these returns that are just fanatasy,, and only temporary at best…
These guys will buy the better inventory take the lower yield they are all buying for capital growth and a nice sustained yield,,
we do not have the option of 5 to 7% bank type rates of return… our bank rates our .05 that kind of thing like Japan.
JLH
Freckle I saw it in my lending business big time,
hege fund come in with 20 to 50 million and basically lose it.. Here I am hard working guy build my company to 30 million,, and they come in and undercut us then lose it all and down the road..
it was tough market when it crashed but you take institutional money and if they walk they just exit, no trying to maximize their loses like I did.. Same theory of whats happening with our banks last 4 years.. cut and run
your right can leed to a bust cycle,,, However this time around they are much smarter,, They will not go into the hood and ghettos like Detroit rochester, most of Ohio, And generally any inner city low value properties.. they are focusing on CA. which is nirvana in the US for REal estate,,, and the better markets and targeting properties at 60 to 150 with 4 to 7% net yields max… This is a good combo they will cream the inventory.. prices will rise.. and it will lead to a recouvery of sorts.. thats my thoughts at least.
The off shore investor had a free run for the last 3 to 4 years.. Unfortunatly a lot of them were very greedy and only wanted 20 to 30% returns and they are the ones you never hear from Save Richard Davies and few others.. Like the one that bought 4 props. from TRR…
Its a fine line here … I will get my 1,000 doors of that I am sure,,, but I am very careful my investors demand it..
JLH
there are already major enviromental issue cropping up.. And you know the US.. just think about the spotted owl..
this aint Canada,,, some judgle could stop this in a heart beat…
but I think there is a play here but its more of a business play not a long term passive investment play..
I looked at starting a building company there, but just could not get subs… thats why they are hauling in the wobbly box's thats what we call mobile homes. or in the Black community,, the like to Say " we wants one of them Mobility homes""" and I know I sold hundreds of them when I was a kid in the Bay area….. pretty funny really…
Good luck to those who invest… Just make sure you can recoup in 24 to 36 months…
JLH
Ok,,
I thats my point I wonder if the OZ investor will engage at under 8% net yields.. I would allow them to buy much nicer houses that have far less Risk… but then they may just choose to stay home and not come out to play at all…
and or they will keep playing in the hood throwing good money after bad,,
be interesting.
JLH
the only liquidity event that those hood properties are going to have
WI,
I agree currency spread is a nice factor,,, back in the early 2000's I was lending hard money in BC… I remember one loan in particurlar that I made 100k CA… cost me 68k US… by the time the guy paid me off the CA had stregthened 20% or so… So I got my 15% yeild on the note plus a 20% bump in principal.. that was a huge earner… Same with the Real Estate I bought in Kelowna. I sold Napa valley home at the peak and bought a real nice place on the Oakanogan Golf club course for about 260k canadian that cost me 180 is US… then sold that and got a bump as well.
The one I missed on though and what orginally brought me to Kelowna was ski in ski out condos at Silver Star for about 60k canadian at the time which I think was just about 40k US… I wanted to buy a few ended up buying the house.. But those would have been a terrific capital growth investment. Just love that part of the world… And recommend anyone coming to the US to check out BC its spectacular… Take the train from Vancouver over to Calgary thats a great 2 day trip.
JLH
WI
Agreed,,,,,mark up is reasonable
Comes down to execution. 3 months to rehab according to the other TRR client is just negligent… Also these TRR clients have one house that never rented. So bad purchase by TRR. And one that is trashed….so their proprty management is human vs a vi US market…
What raises res flags is when TRR cients claim they get tenants in ga. Within a week. They are under pressure b/c rehab is 3 months and there is no way any Atlanta pm can put the best client in in one week. Far too many rentals to choose from on the renters side…
We take 4 to 6 weeks to place tenant. 3 to 5 apps to choose one tenant. Since we have to pay for any vacancy or repairs we are super picky. TRR if there is vacancy or repairs it’s just an oh well e mail to the owner and by the way we need more money.
If the OZ investor ever took the time to run the numbers. They would not be happy,,, just like I pointed out with these TRR clients that have two lemons that they bought from TRR who cares what the mark up was when the properties do not generate any cash flow
I submit to the form that your experiences are the exception not the norm… And you spend extra thousands a year and time to make sure your investments run right most investors are sold this turn Kay nirvana and this is where the heart ache lies
Buy 100 houses at one time. Yes,,
Highly doubt TRR buys 100 houses in one closing……they are buying just like any other investor in that market.. And I will bet you dollars to donuts they are doubling escrowing. Although with the market changes in the lat 6 months that is probably tougher
Short sales and auctions….
Emma,
I stopped going to the Dump years ago…. with any thing but construction debris or yard type debris if its cloths furniture, hard goods whatever… I just move them in the driveway.. Put a Free sign on them <moderator: delete> and its all gone.. No cost no fuss no must they are happy to get the items I am happy to not have to go to the dump or stand and a garage sale all day trying to sell items for Looney or a Twooney…Just thought I would throw that in Eh:)
Agreed on Appliances in Atlanta,, We find the Stove's missing but not dishwasher,,, Airconditioning units are usually gone or gutted, Other than the more exclusive GATED communitys in Atlanta it will happen to any home no matter what you pay for it.
One very important fact that those investing should look at and US citizens do this intensely,, Is SCHOOLS… this is your best baramoter of where your going to have capital growth.. and best tenants and such.. Even accross the color barriers those that truly want a good education for their kids will gravitate and pay a premium for those properties. Take a school district that is inner city and 97% black or hispanic with low scores and your home values will just trundle along at what an investor is willing to pay….
this is how we buy properties in Atlanta by school district and counties…All this info is on line as well.
And of course there are areas where the parents that want the best education take their kids to private schools in the south called Acadamy's these were started after segregation was in acted.. Remember in the Deep south we are only 30 to 40 years removed from race riots and total segregation.
So this all leads to whats called White flight, blacks hispanics whatever move in and the whites move out to their enclave's.
Mahovi that is why I suggest anyone who wants to by inner city should only look at the properties on a Sat. 10 to 4 you will get the flavor really quickly…..
WI,
I looked at what you sent from TRR and there is address but no cities one would have to really hunt around to find those properteis, do they actually post FULL address?
JLH
Emma,,, what do you really think???
great advice,,,
One last thought on the subject,,, Do you ever wonder why the US wholesalers are pounding so hard on the GB and OZ is because by and large have burned through the US investor, the great majority of these foreclosures come from the US investor that had the exact same experince as RICHARD,, the OZ and GB investor is just new fodder,, and in a year or so. the OZ and GB investors will back off.
The Isrealies are coming in now and some others.. But take the Brasialians who know poverty and tough,, they wont buy any of these properties they buy high end condos…
US investor is back in the game but much smarter than the last go around,, this is why the super low end is there for the picking for OZ investors.. We don't want it… And make no mistake there is far more capital to buy property in the US than in OZ by 10 fold.
These low end areas really just need to be bulldozed,, they have lived there life they are funcionally and economically obsolete..TWh is clipping along at almost a million a month in US investor investing in our model,, 9% and never a cash call and equity this resonates with the US investor.. My investor tend to be 55 plus 500 to 2 mil in their reitrement accounts and want fully managed no worries investments.. If they did not do TWH they would not buy real estate at all.
Now if I can get Alex off his rear and get our Charlotte market opened up I will be a happy camper…
JLH
Always two sides to the story,, the OZ side is the poor fellow was there on his 30 day vacation to work on his units and did not know any better, that buying hood properties for an unarmed white person can and will be hazardous to your health..
Its a crazy world the Black folks live in by and large in the US.. OZ investors have no clue… Just like any other slice of society there are good and bad,,, the bad blacks are just really bad and thats a fact.. Uneducated do not value life as a whole, Terminally unemployed with no where to go… There is some crazy stat that the unemployment rate in Detroit in the black community has a rate of 30% plus with the majority will never work.. The men live off of the women.. the women get Sec 8 rents EBT food cards and all other manner of public assistance…Its a totally matrearical society,, Those of use that invest there and Every one on this forum is working with predomiatly black communites… I mean Atlanta is 50% black so thats your tenant base..
Detroit is just a tough tough town,,, Again not all blacks are like this but on the bottom end of the rental pool its the norm, and why I personally do not believe the risk is worth the reward, and that these are not suitable investments for anyone but people in the business of running these properties.. Can you get lucky and get a good tenant that will stay for years YES,,, can you experince what Richard has gone through absolutly,, I have had at least one call a month and I am sure this is just the tip of the ice berg…..
Even the higher end suppliers like TRR have clients that have fared not much better at least according to the post from a few days ago.. 2 houses doing fine.. one trashed and one no tenant and probably will end up being trashed if its not taken care of post haste… Its just the ugly truth…And it does not have to be this way… Just lower your return sights to Quality properties and these issues are deminished exponentially.
You can invest in Portland were I live and the tenant pool is either hispanic or white,, there are under 1 % of the population in Oregon that are Black.. Hispanics are tough on properties but by and large pay there rent.. YOu get some white trash tweaker and they are worse than the bottom end blacks.. YOu get nice middle of the road white renters in Oregon and its just like OZ set it and forget it… Returns are 3 to 5% max on a cash on cash basis but you will not ever have a bad day.. its why our Multi family is some of the most sought out in the US.. less than 2% vacancy rate and 100% collection rate with little to no eviction issues.
Risk reward capital preservation you the investor need to choose.. go for High yeilds and your rolling dice…
Alex and I have said time and again a happy medium is 9 to if your lucky 11% net returns.. OZ investors get blinded by the sales pitch of the OZ spruikers and off they go taking huge risks… But hey if you got the cash to lose your making some wholesalers day and the OZ resllers lots of money on every transaction…There are expections for sure but far and few between.
JLH
JLH
I like Fort McMurry Alberta for a mining town,,, its got that old swagger to it.. plus huge river running through the town and some greenery.
I bid on a parcel for a shopping center oh 7 years ago so I was up there for 3 days.. got to tour the open pit tar sands mines and ride in the big ass trucks and excavators…
I am sure this is going to be a nice short term play,,, Kind of like a fema village post Katrina….
JLH
would be extremely rare if a company like TRR that is doing 100 homes a year or so would have any direct pipeline to any bank save the odd one… When they say bank they probably mean short sales,, and the for profit auctions.-
