About time a US bank realized the value of the off shore investor putting 50% down… vis a vi credit risk..

Just tough for US banks to think of making any kind of non recourse loan that they have to portfolio.

I assume this is a local commercial bank not a national lender?

I have been working on my local commercial bank for the same product.. And I think they would do it for sure if it was one of their REO's… and maybe right here  in Portland in their lending Footprint   ( Footprint is the new go to term for banks)..

JLH

Carl,

We just closed a few transactions with a Perth Accountant that represents a group of Doctors. This accoutant does not take any fee from the client he does charge an hourly rate for his time working with us, however thats nominal. The professionals that he deals with want to walk in sign one document wire funds and leave, then collect their checks each month with no worries of property mangement or any other rental issues.

Its taken us a year to find the right investors for our program however just like the States there are those that want it all taken care of and not worries from 6k miles away.

The other very intersesting thing was these doctors used their Super funds. And according to the Accountant from Perth. The typical turn key investment does not meet the safety threshold for super fund investing, too risky,,,, Our fully managed product with its monthly return that is consistant and not subject to vacancy and mainteance, In the MIND of the Perth Accoutant meet the Aussie superfund cirteria.  Probably like our IRS rules you can do what you want until the Gov checks into what your doing.

Anyway we are excited, Our Net returns are 9% guarenteed with no down side plus equity…. Which is really hard to beat over time….

I was just about to give up on AU as most investors were looking for the 10 to 12 % or higher returns… and willing to risk it on their own.  And as we own hundreds of rentals in multiple states I know that most individual investors over time have a really hard time making anything over 10% and most rest at 5% or lower.

So red letter day for us today.

JLH

Slight type only 3.2 billion )))

Of course one could buy all of Detroit and throw in most of Ohio for those dollars   forget the exchange rate

Nigel

I have been licensed since 1977 and am a re broker in 3 states…..

There are far more credible re agents that are qualified to give advice buying these in expensive homes not rocket science…

Certainly more than the Johnny come lately OZ marketing companies that out themselves as experts and have never even seen the properties they promote

There are only amfew ways to source these properties no super secret there….one just needs to buy one of the guru books and most strategies are talked about there…..

I personally have probably sourced properties over years in every conceivable way. For instance

1. Court house steps. IE foreclosure auctions have bought 100’s this way in many states

2. Bought bad mortgage debt and did the foreclosure myself

3. Bought a few out of probate as well as through banruptcy court

4. Tax sales and tax deeds

5. Fisbo and pre foreclosures

6. Reo brokers that give you first look I would imagine your Texas partner has this connection

The reo brokers have always been great source although now a daysnbanks and fed want yo see properties listed for a few weeks before they entertain non owner occ buyers.

Now the fed is going to start to package up properties only for investors and sell in 5 mil blocks or bigger

Another subject whats going on with economist saying OZ real estate is over valued and could crash?

With OZ folks taking on debt from their homes to buy us properties this could ,
Lead to same storm we went through

What I would do is figure out what city you want to focus on then,

I would engage a Licensed Real Estate apprasier… Just give them your criteria they will narrow down your focus 
 I think an apprasier could give you an over view of their market for 500 bucks or less. we pay 175 for drive by apprasials and 350 for full apprasials.

I have been toying with this idea since I first started on this site a year ago.

maybe take the 10 most popular markets and give a general run down based on zip code. maybe like a Red light , yellow light green light approach.

Like Red light would be war zones of any given city, In most of the mid west markets I know those areas just off the top of my head based on my thousands of hard money loans I have made over the years.

I wonder what this type of report would be worth… Real time data and opinions on vairous markets with No product to sell.

My other thought was grading US turn Key operators. Lord Knows I had to wade through them in my lending days. There are good ones then their are ones you want to run from, I suppose thats the same with the Aussie buying services.

WI

Careful with Zillo,,,,, It gives good information but you do not want to base your opinion of value on Zillo… Zillo is famous for being either way over current market price or way under.  You can very well pass on good deals because your basing your values from a computer generated system.

Terrafirma,

You sound like a US Realtor… And yes a realtor will make their 6% or split 6% with listing agent brokerage house etc. There is a whole industry in AU based on companies that act basically as Realtors, but they charge a fee from the buyers… Like a RE broker here in the states that works on a buyers brokers contract. And of course a RE agent is not allowed by law to pay referral fee's to non licensed companies or persons ( which most if not all of the companies engaged in this activity are not)…
And it is common for these companies to collect a fee from the turn Key operator as well as from the buyer. So their disclosed 3k fee could be double that or more when they get their fee from the seller, especially if its a turn key operator.  So all this is just added in the price. Although they do more work than most realtors do, they set up the LLC 's and help with ITIN numbers and bank accounts… so on and so forth… And then they  promote whatever ever market they have a US wholesaler in.

And those fee's may be in addition.. In most states you can set up an LLC for under 100 dollars.

So you will see some of these companies work many markets and have many US turn key contacts. Others may just work one market.  So there will be Bia's to were is the best Cash flow US market…

but for now we love the cash investment into the states and welcome these AU investors with open arms. At least thats my opinion… Just would like to see them get a fair shake… As some of them really get abused and end up with some real lemons.

Now if the AU company actually closes on the property using their own funds then of course they can and do charge whatever ever they want and or whatever the market will bear between willing buyer and willing seller.

I suspect one of these days there are going to be complaints lodged with states Attorney General's and depatment of real estate about all this un licensed activity and there will be some companies that are shut down, if they are just making fee's for connecting the buyer to the seller. This did happen in Rochester NY… I think its pretty well documented how many AU and GB investors got taken to the cleaners by some really bad actors.

And of course they can couch it any way they want, and call it a consulting fee etc etc… Many US property flippers over the years have run afowl. with these states department of Real Estate and gotten their hands slapped or fined for selling RE without a license.

It is a unique niche and there are companies here in the states that do the same.. Most are based in LA,,, and have radio shows and then recommend certain turn key operators and they are compensated from the seller. I know of one company in Irvine that does charge 5k up front for their consulting fee's. They have a direct tie in to Armonda Montolongo's data base, I have loaned them money many times in the past.

There is another radio show out of San Diego and those guys Jay and Bill are licensed REMAX agents have also made loans to their clients.

So the AU buying service is just a copy cat of what has already been happening in the US for the last 15 years or so.

John,

You can go on line and buy cruise certificates for next to nothing. I bought 20 5 day cruises out of New Oreleans for something like 2500 bucks. The person you give the cruise cert. just pays tax's, but its a nice fancy folder with big picture of the ship, and let me tell you your demographic loves those booze cruises out of Oreleans.

I use them here in the states for Open house gifts for realtors when I am opening up one of my new constructions for the first time. Let me tell you it works.

Now with tenants it will be interesting to see how that goes…. check it out, its something a little more tangable then airline tickets and a hotel. Alot of these tenants especially sec 8 may have never been on an airplane before,,,,, And Aussies I am not kidding. And many of these tenants will live and die within 10 square miles of these homes and maybe take one or two trips more than 100 miles in their entire lifetime. 

I learned these little factiods from the used car dealers in the towns I made hard money loans in. I always wondered how the heck they can sell these cars with little down and no credit….. Answer there car never moves more than those 10 square miles and when they don't pay they can find it realitivily easy and reposses it.

I am going to try your approach with  the cruise certs. as our inventory is within 3 to 5 hours of Orleans or Cape Canavral…

Lets compare notes.

In addition the sellers of these certs. will give you big poster boards and brochures included…. I use them in the Open houses when the agents walk in to drop their card for the drawing there is a nice big 2X4 poster with the big ship.

Let me know what you think good job on being creative.

Alex I am born and raised in the Bay Area and Lived in the Napa Valley for many years… So we have a little heads up on the vino world

USA investor,

Here is the biggest issue you are missing, You are just not familar with our tenant pool, I am not defending or being critical of what a PM charges,

If you change property managers the tenants will stop paying, as they get confused, they have trust issues, many of these tenants have lost homes that were forclosed right out from underneath them, ( as we all know)..

The next thing they will do when the knew prop. manager shows up will be to present them with a laundry list of repair items. and they will only pay when those get fixed ETC ETC ETC.

Just ask anyone who actually owns a large portfolio of SFR's this is a huge issue, and your giving bad advice if your advocating changing property managers constantly because of what you precieve as performance issues. This is not Austrilia you cannot expect a PM industry to mirror your industry and charges.

Property management on a small scale 100 to 200 units is a thankless low paying job that agents just jump into searching for cash flow as the sales market is so bad, This is why this Poster is talking about providing a turn key product they make their  money on the rehab and most likely a mark up on the property, As this is the american way we like to make a profit when we put deals together. Property management is just a necessary evil that comes with selling Turn Key. If you don't your clients get really poor service then you have really pissed off investors that will not do business with you or refer people to you. Its certianly why a company like TRR has gotten into the management side. And like I stated many others its a necessity.
 

Realize all these sales that are happening are for extremely low prices. Look at a 50k transaction for a RE broker… They gross 6% thats a whopping 3k split that with another brokerage then pay your cut to your broker and your working a RE transaction for less than 1k. And having all the work involved. have to sell a hell of a lot of houses to make a decent living if your going to be selling to Investors. The Aussie selling agents make far more than this per transaction and they just middle man it and have no RE license etc.. Do not pay Multiple listing fee's RE board fee's E&O insurance etc etc.

One thing we do have here in the US is a free market and everything is negotiable, I just do not think its prudent to negotiate the key item to success and that is PM… those that go cheap on this and have the PM just walk away from the property will understand this when they get a 5 to 10k bill for a house thats been vandalized, Airconditioning unit stolen etc etc.