Dream on ,   ( and I do not mean to be rude) if one could make that kind of return the whole of the US would be weathly beyond dreams and Oz investors would never get a deal. Do you really think if you could make that kind of return that the US investor would not own every property avaliable. These are just not realistic or sustainable only in a sales brochure and in your wants and wishes.

Just real world experiences after doing some 250 loans in Detroit and foreclosing on 8 or 10 properties and ending up owning them, As a lender we definitely get the worse end of the stick when borrower walks. We got out of most of ours because we stopped lending there in 07. Before the big melt down and the credit crisis.

I think the stats stand on their own about Detroit there is huge negative population growth, unemployment, of which a good section of the unemployment are those that are terminally unemployed which does skew the numbers up ward.

In its day I liked it enough to do hundreds of loans so there was a day that we enjoyed it, that day has passed, as well as most big inner cities, Same thing with Chicago, Pittsburg, Philly, Fort Wayne, Cleveland.

The outlying suburbs are, as you say more stable and there is I am sure decent returns. Just hard pressed to see how your going to have price's come up substantially unless the Aussies or Brits create a shortage and drive up prices. Because it sure is not going to happen from US investors. US investor's still go into Detroit only for the price point. buying houses for 1 to  5k.
and trying to keep them rented and repaired. their price point it so low they risk the other factors, and if you get a bunch of them like you probably have you make a business out of it.

My point is that it can be very iffy for a out of state or foreign investor to Make ANY purchase in the US, and only have 1 or 2 properties. Even in good areas or areas we think are good there is going to be management issues.

And because these houses by and large are REO and usually vacant when they are purchased, Folks are buying these all on proforma financial data prepared by the person who is trying to sell it and is trying to make as much profit on the front end as possible, hey thats capitalizm and the american way. 

When ever I buy or sell Plex's for instance and those are almost always to experinced investors, people tend to buy single family then move up to multi. First thing they request is 2 years of tax returns and P and L's with actual expenses. And then run the numbers to figure out a cap rate that they are comfortable with then fashion there offer to purchase accordingly.

Whats happening here in the single family Niche is investors are buying properties that have no historical data as to that specfic property. so there is no way to know for certain what you can expect in vacancy factor and on going Maintance.

My comments about cold weather are that houses by and large will cost you more to maintain in a cold weather environment.
Also as such one needs to be careful what they buy if a house is poorly insutlated and has abnormally high UTL bills the tenants will not stay long. Thats why I would not buy a rental in cold weather area that is much bigger than 1500 sq ft. You buy a 2k sq ft home or bigger sounds great but expensive!!! to heat and cool. And tenants are on fixed budgets by and large so those are little things one needs to be aware of.

I think as you read the above posts and as smart as the aussie investor is. once you factor in vacancy factor, as in it takes 1 to 5 months to rent a house there is no way these houses return 15% Net returns.

That could pick up as you get tenanted, but what happens when the tenant leaves and its 2k to rehab and you sit vacant another 2 to 3 months.

these are my points, the proformas offered by these companeies that really have no long term history owning US rentals are all just hype and best case scenerio. I would bet anyone here that if you do better than 10% net return your doing fantastic.

Not that that is bad its great but its not 15 to 20 like is bandied about on this site. And especially if you take into consideration your travel over here setting up your LLC 's and such.

One of top rental return clients has been e mailing me. bought in Feb for 94k.  took 2 months to do a 2 week job. Just got rented middle of July the rent that was represented was 1600 it ended up renting at 1400 which is still really good. However the 12.56% net return was based on 100% occupancy which of course it never had and rent at 1600. So this deal will be far south of 10% acutal return. Although I really liked the house looked nice

to put that into context. You can buy tax liens that never redeem and you just loose your money and the properties are worthless and not worth perfecting title on. Happens every day of the year in this business.

when you go to the sales you wil see who the players are they are all set up with their lap tops and have 3 or 4 people they do it for a business. the average investor is just throwin dice

Ah the old lease to own game with the "I hope they quit paying mantra"  I think for long term holds these can be good in general however I have done at least 50 of these over the years and can count on one hand and 2 fingers those who actually could buy.

but they by and large make good tenants. And 10k down I think is puffing most people with 10 k will buy outright not just lease, On reason is so many landlords have scammed and stolen money from Lessors its an epidemic.

Seller gets the 10k down renter pays 800 a month, land lord defaults it takes a year or more for mortgage company to figure it out and foreclose Landlord never makes payments pockets the 800 a month never pays tax's etc. gets the down payment they end up making 20 to 30k , the poor lessee gets a notice their house is going to foreclosure and they get booted after its done and loose everything.

YOu may ask who would do this, Answer many many landlords. That is why in deeds of trust or Mortgages their is an assignment of rents clause. And why the lessor if they go to an attorney will record the lease.

Now if your the seller and they record the lease, its not so easy to get ride of them you need to do a full foreclosure which in Michigan is a pain and 1 year and costly,

most of the guys i know in this bizz do what we call sweat equity they do these lease options and let them move into a house pre rehab for 1k down and really low payments. And some of the tenants actually fix them up some just live in them.

but the reality is 60 to 90% default over a 5 year period.

Hope that sheds some light on the lease to own program

Can you say strategic default.

if it does not effect your perosnal credit this is what most propert owners in our shoes do.

I am not advocating it just pointin out whats happening

Dan, I have a heck of a time explaining my model of first trust deed ownership with 50% equity, the few folks I have gotten on webinars just could not grasp the concept.

It woudl be intersting to know what the security instrument they use in Au to secure a real estate loan and if they sign a promissroy note

gary, the difference is that is what we paid for the property and did a total rehab, and we are bringing our investors in as partners not flipping the house to them. these houses have

1. New roofs
2. new heating a airconditioning ( Brand new from Factory)
3 new sewer line plus all new pecs plumbing.
4 all new electrical includeing the breaker box.
5. new bathroooms
6 new kitchens.
7 new floors and doors  and carpets.

Other than the bones of the house they are brand new. Completly different than the average rental you will buy from any other company 95% of the time. This house would sell on the rental flip at close to double what we are bringing our clieint into the deal heck we spent almost 30k rehabbing it.

JLH

The south east is the New detroit , just check it out, all the auto manufactorers are or have moved south. No big union problems.

Largest Nissan plant in the world = Jackson MS —Largest Toyota plant under construction between Memphis and Tuepelo MS home of Elvis and thats saying something, I personally have visted both sites. the Toyota site is something to behold at least 5 miles by 5 miles under construction, Out in the middles of no where but it will create thousands of Jobs.

Alabama and GA have seen there share as well as the Carolina's. 

Upper mid west may attrack some new bizznesses but it won't be auto motive.

Detroit has over 50k houses that could be bull dozed under right now. Be very very careful in Mich. Ohio upper IND Like Fort Wayne. there is NO capital Growth there in the foreseable century in my mind. and has not had any since the 60's.

No one knows were the best places to invest are. However those rust belt towns are certainly ones to be very careful with.

If you can get good clean neighborhoods and want your 5 to 10% NET return year in year out they will do that.

Any one preaching 15 to 20% Net returns for year in year out is Puffing big time. You can do that if you buy at the price the folks that are selling you the properties buy at. But by the time the AU gets it the mark ups are 30 to 50% over true cost so there is not near the income potential and certianly no Capital potential.

Its going to take those that dive in to these markets thinking they are going to get this huge return  and then loose their money to figure that out

JLH

Ya'll are going to really think I am an know it all now.

Leheigh acres has 750k platted lots or thereabouts Thats 750,000 Thousand. and Coral about 300k.

These subdivisions were built before there were any real zoning rules.

the lots that have Sewer system have more value. other lots have septc and well on each lot.

Nice product. supply and demand dictates here.

I bought 2 foreclosures 24 months ago for 30k each put about 10 into them. then gave them to a local wholesaler who had a local company that dealt with a british firm. The end buyer were brits and they paid about 85k for each. With the British company making about 15k profit on each the local guys about 5k and I made 5k each.  About how it goes by the time it hits Britian.

Got to watch for Chinese dry wall as well.

I was on a California government committe back in the mid 80;'s that was dealing with antiquated subdivisions. Which by definition are subs that were platted and recorded. But never had the proper amount of roads sewers water to allow a even close to 100% build out.

Le High and coral were the poster childs for these, I spent a week there in the Mid 80's with the local planning staff. There is no way that the infrastructure can handle even a 50% build out.

so when  you go there you will see long blocks with one or 2 houses. then none then a bunch. And someone owns each of those lots in between. Lots have traded there for 3 to 10k per for 50 years. then in the go go times of 2003  till the bust of 07 they got up to 90k, now there back down to 10k and will pretty much stay there.

Houses were 250k then crashed, Actually if you wanted to live there probably one of the best deals in the whole world.

Wholesale prices have risen a little from when I picked my up. but you can still get them for 35 to 45k at trustees sales as is.