Exception to the rule. Just go on E bay and que up any one line  course and you will find hundreds of them for sale.

Starting with Carlton Sheets, Robert Allen, Real Estate Universty, Armondo Montalongo. etc etc. Really like the Infomercials over here with the Aussie guy, He kills it we americans love the accent.

And various others selling their info for all kinds of different investing plays in and around real estate. Just like Books on how to invest in the stock market Or lately the seminar circut going around the states on how to use Options to make millions.

whats a "spruikers"

[  My point exactly. As an out of country investor your darn lucky you got your money back much less a profit. There is no cream in these deals unless you live here and can due heavy due diligence period.

Please see my long reponse to how TAx sales came about and how the pro's in the US approach these.

No one is going to invest on line out of country and beat the locals, Just not going to happen. Of course you can buy all sorts of courses and the folks selling this info. The reality is those Lotion and Potion sellers are just that making their money selling retread info. Ask these guys to prove they invest in anything other than advertisements hotel rooms and books.

The investor from China who is retired and young is right on with his advice by the by.

quote=petejac1]More of an update and also something I learnt from the Arizona Tax Sales.

I had 4 Liens redeem in Arizona and received the cheques today, 2 of these actually cost me $10 in fees as they redeemed straight away, 1 I received $0.60, another $3, and 2 again cost me $10 each.

Look like I prefer Florida for the min of 5%[/quote]

There are hundreds of these type of programs floating around can buy one on E Bay or Craigs list for pennies. At least the Written material and probably the tapes as well.

Years ago when you had to do the research by hand at the court houses using the old recording books it was much more difficult however it was worth it you could get some really great buys at the Tax sales. We bought many a property that we sold once the redemtion period expired for 10 to 30 times what we paid for it. And by many I mean 100's but that was my fathers bizzness from late 50's till the computer age and the guru circuts.

 tax deed or tax sale investing is as old as the Tax system and what you have here in the states by and large there will be some group or entitys or individuals that buy these basically for a living. They will dominate the sale, are highly orginized and know what they are going after. Then you have the seminar students that usually pick up the crumbs. You will always get lucky and get a few redeemed however you will also end up with many that never get redeemed. That is because the property basically is worthless has been worthless for 50 plus years and will alwasys be worthless. The investor never quiets title then lets the next newbie buy the tax deed whereby the first newbie lost their money and cycle repeats for years and years and years until the next guru's seminar hits the circuit.

So for some one like Judith who has moved to Lee county she stands a chance of being able to actually identify the properties that would be worth owning. Lee county has 2 Major Subdivisions LeeHIgh Acres and Coral Gables. I belieive Lee High has 750,000 platted lots of record that have a tax bill every year. Coral Galbles around 500,000. These lots were built back in the 1950's to attract snow birds and were built with little or no governement environmental controls. Ergo Long roads to nowhere were there are houses dotted here or there. One will use a well and septic on each individual lot. With the exception that city sewer has gradually been picking up service there. Back in the 1940's and 50'S Florida was a Mosquito pit and to entice Northern development the state allow almost any type of development on the hopes of getting people to move. This is where the Term "I bought a lot in florida site un seen but its under water" This was very famous saying in the states.

So with Lehigh and Coral gables throughout the years these million plus lots traded at 2k to 10k to people that actually wanted to venture out and place a home on a cheap lot. Then we had the big run up in 2000. Lots at the peak of 04 05 06 actually got up to 75k to 100k plus. builders mainly from SouthEast swooped in and started building Spec homes by the 100's. Remember Well Septic good to build and these homes traded at 200 to 300k. size of each home somewhat limited by Septic requirements.

Fast foward to 07 08 and beyond when the market crashed. These homes dropped incredibly. Lots went back down 2k to 10k each take your pick ( of course Sewer avaliable lots cost more) and the opening bids on 06 houses at the courthouse step's were starting in the 30k range. In fact last August I bought 2 there for 35k and 37k repecitively. Nice 06 house's that had 200 to 250k mortgages on them. At one time I bid on a group of 100 houses at 85k from a bank and was glad we got out bid. I bought those 2 to test the market. We did maybe 10k rehab. I paid the bird dog who bought it at the sale 7500. ( I live in Portland Or.) My other bird dog who lives in Detroit was paid 5k. A promotional company from the UK ( a lot like the guys who are pitching turn Key in Aussie) they made 10k or so and I think I made 5k as the money investor. So at the end of the Day the End buyer looking for a cash flow turn key investment paid about 80k. This is typical on Turn Key programs that I fund the acquasition for.

Anyway back to tax investing I digressed. So as for long term in Lehigh or Coral Gables values will remain low for generations and the end value will simply be a function of what an investor will pay for a property given a CAP rate. And or what will a retiree or some young family be able to afford for Owner occuppied.

I was on a State steering committee in 1980 from Califorinia, It had to do with what does the US do with the Millions upon Millions of platted lots that dot the country when they were platted legally the requirements for services ranged from Nothing pure shadow plats but legal lots with tax ID's and tax bills but no way to build on them. To a Development like Lee High were they pushed the roads in graveled them and allow Septic and Well on an individial lot.

The issue is its not sustainable. There is no way you could build out these subdivision in a normal sense there is not the infrastructure to handle them.  IE Roads Water Sewer. Can you imagine 1,000,000 individual wells an septics surround Fort Meyers. All on 100 by 100 lots.

So States that have huge tracks of these what are Called Paper lots are:

California  specifically Riverside county and the next county north out by Edwards airforce base there are millions of lots there that are legal but when you fly over you will just see desert rats in their mobilehomes scattered about. There was a chinese promoter in San Fran. Who sold thousands of these to Mainland chinese in the 90s he would buy them at tax sale for 100 bucks a lot then sell them over there for 10 to 20k with the promise of Edwards airforce base and the "Space shutte creating the next LA.

Arizona:  has millions of Shadow plats and a very vigourous tax deed season.

New Mexico: as well

Then there is the above mentioned Florida.

If you live in any of these states tax sale investing can be very lucrative. We used to buy 200 properties a year in 3 counties in CA. however when tax sale investing went on line. Prices got bid up to high and we exited the market. In CA of course when you buy you own like a Deed foreclosure. As I stated above In the states that have the Tax Liens the locals pretty much know what the good properties are and they will bid down the rate of return. I have attended sales were large intitutional type bidders will buy rates down to 4 to 6% and buy millions of dollars worth in one day, however they have their staff there with their lap tops and they know what to bid on and what is junk.

Hopes this gives a little background that you may not get in a seminar trying to sell you their system.

[email protected]

[
Please e mail me @  [email protected]

We lend on a lot of these assets and I can give you some insight to your question.

For the entire audiance

In a downturn Condo's become the hardest asset to sell. The HOA's many times go broke. Back in the 80's there were restrictions placed on the developments that required a certain amount of Owner Occ before US backed loans could be used on the project. Those rules loosened along with everything else finance gonig into the 2000's.

I would be happy to speak with you off forum about  small multi family as well.

 ?To All:

buying at the court house steps "aka foreclosure sales" is a very risky proposition for the average investor. In the states there is  for lack of better words a little Mafia group that will control the sales.  From buying people off to bidding a newbie up with no intention of buying the property. The regulars protect there turf vigoursly.

Tax sales are not the same. still competitive but not nearly the amount of intrigue. The folks that bid at Foreclosure sales do it for a living and are there every day.

Not that you could not get lucky but  an out of state investor has little to no chance of scoring a real good deal when competing against the folks that do it for a living. 

so good advice from Act Today

Highincome,

when you establish an LLC you have to have a registered agent for Service that is located in the state of your LLC. If you get sued its your resident agent that gets served. And you will get sued personally as well no lawyer just sues the LLC.

The reality there is next to no litigation involving single family rentals and for instance I have a 3 mil umbrella policy for liablity which cost me 300 bucks a year. LLC will cost more each year filing a tax return. I can see using LLC if there are multiple partners however not for a single person unless you have a really large portfolio.  there are attorneys in the states that will recommend you have a different LLC for each address or property. And yes it would add a layer of protection but protection from What. In 33 years of owning up wards of 200 units I have never had one lawsuit by a tenant. The only time you will see a court room is in the event of an eviction.  There is just too much paranoia… The caveot being if your very very wealthy.. The other reason to have insurance is that is where a sueing attorney will focus their attention in the unlikely event of a water landing>
However the insurance company pays for 100% of your defense and they are masters at defending litigation its what they do.

[British,

Good advice. Although some states are non disclosure states and the only disclosure of sales prices is through the MLS system. then its picked up by Truila or Zillow.

Most of the Guru's in the states are really just information companies they sell their systems books and tapes, boot camps etc etc. I highly doubt they own much more than there personal residence and whatever 2nd and 3rd homes they may own.

They use the power of their large e mail lists and past student lists to market folks then they take a commission much like a realtor for each deal that is done.

As I am privy to a lot of HUD 1s as a lender to the guys that are sourcing the inventory I can tell you there is usually 2 to 3 layers of payments that are being paid out

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I went to your blog and read some of your articles and I think you have done a very nice job getting both sides of the story.

I am assuming the prices for Real Estate in AU are such that you need huge cash infusions to get cash flow??

And the price of entry is high. This is why AU are looking at the states after our well document RE meltdown.

As a private money lender ( Hard Money) and my Niche' is loaning to REO, shortsale and foreclosure buyers, who then rehab and sell to investors I have a very unique and qualified perspective on what is happening in the US markets right now.

We are in most of the hottest Cash flow markets, from FL to IL…. And my kids live in Vegas so I am there often.

Here are the biggest issues I see with Anyone regardless of if they live in the US or some other country when it comes to buying and holding investment properties in the States.

1. Lots and Lots of choices so it can be paralysis of analysis trying to figure out when and where to invest.

2. finding a quality company to help with your purchase that being a realtor or one of the TURN KEY COMPANIES remember both realtors and turn key guys make no money unless you buy their product. And certainly be very cautious if a real estate agent is only showing you their personal listings, Its human nature they make twice as much if you buy one of their listings. If that was the case I would insist than another agent from their firm represent  you interest in the sale.

3. ANd last but very certainly not least Property Management.

Anyone can figure out and buy a cash flow house in the states there are millions avaliable, and like all business there are stand up rehabbers and investment property sellers and then there are the guys that are in it for the quick hit and you never hear from them again.

However at the end of the day it all hinges on property management, And it does not matter the asset class from High end to Section 8. This at the end of the day will make or break your investment.

In reality most investors do not make anywhere near what they think they are going to make because the cost of owning and running the properties are grossly understated.

At the end of the day its about NET cash flow not Gross cash flow.

These are the minumum numbers I crank in a rental that I would be looking for myself to establish net cash flow.

10% of gross income for vacancy yearly  if I do better great. Most managers charge you first months rent for placement fee or at least half a months. and you will be changing tenants yearly and bi annually for sure just the nature of the beast.

100 to 150 a month for on going maintenance  if a tenant moves after a year which 75% of them  it will cost you 1k to 2k to turn the unit over and ready it for a new tenant. If you do better then that great but your being realistic.

75 to 100 a month for property tax's place like TEXAS are JUST KILLERS with property TAX I know many folks who invested there only to find out the annual tax's where wiping them out. Same with the City of Detroit and Wayne county.

50 to 70 a month for Insurance.  

10% of gross rent for property management.

So to do the math on a 750 gross rent. you have  ($75 vacancy or tenant placement this number could double if your property sits just one month with no tenant.)  (%60 for insurance) ($125 for repairs) ($100 for tax's unless its Texas and that number can be much higher) and (%75 for property management)  ($75 preperation of tax return for LLC)  ( $50 for contingencies)   So to be prudent and conservative your NET CASH FLOW is  to round off $200.00 month with a property that rents for 750. And if you buy condo you can have sky high HOA's and other problems with condos. I would steer clear of a condo unless you plan on living in it. And of course this is if you pay cash for it. If you put debt on it your numbers could go down to break even.  I know this is not what the sellers of these properties will disclose or want to dwell on however its something an investor needs to know so they are not surpriesed by the costs.

These are the real numbers and heck if you do better in a year you might average 250 or even 300 and your tickled.

Its going to be many years before we see prices back to 05 06 levels and if ever in some market Like Pheniox and Vegas and Florida. There is simply to many buildable lots that have been scooped up by the big builders and they will be providing new construction for fractions of what they used to sell it for and they will still make a profit. Most large subdivisions in these markets have been sold for 5 to 10Cents on the 05 price. These builders are literally in lots 5 to 10k. And because subs are starving construction cost have come down 20 to 30%. I know this first hand as I have 11 homes under construction in Oregon where I live. I bought 150k lots for 50k and lowered the price of the home by 100k and we are selling them and making a nice profit, our houses are new and are comparablly priced to a nasty REO or short sale with no where near the head aches associated with purchasing those properties. For these reasons. FL AZ LV will be very long time bouncing back . You have to also realize the bubble was a false market. You have Guru's pitiching folks all over the world to buy in these markets hold the property 6 months and make 50k. One investor was just selling to another in many instances then when the bottom fell out prices crashed as we saw and investors walk away from the homes. That market was never sustainable from the onset so to expect big bounce back in prices in the next 5 years on these I do not think is realistic. You will be competing with new construction at all time low prices per sq ft.

This is why when you look at the chart you did on your blog. its states like N Dakota that did not move much. Because no Guru was pitching N. Dakota back in 04 as a place you could buy a home flip it in 6 months.

This brings me back to property management.

I think what happens is a lot of people look at a fully rehabbed house like its brand new and therefor will require little or no maintenance for many years. This simply is not true. Also Vacancy rates are glossed over, no property stays full 100% of the time. Renters in the states move its a fact.  There needs to be a vacancy factor to get true net numbers.

property managers: this is a big one. There are for certain good ones out there. However how much can a property manager do for your property when they are making 75 bucks a month. Property managers make their money on turn over and  marking up repairs. Other property managers will churn tenants like a stock broker churning an account because they either get the first months rent as a fee or half of it for placement. Then there are the horror stories of Property managers just being flat out crooks and stealing the rent money. I had one of my borrowers call me B/C his promotor turn key seller was none responsive and I had done the A and D loan for him so I was the only one he could get a hold of. he was in CA. 5 states away from his investment and he had only gotten 1 rent check in 12 months, and could I help him, I had one of my assets on the ground go talk to the tenant and the tenant was Section 8. Thats guarantee rent from the government its ACH'd into the property managers account 3rd of every month. When confronted the manager said that there has been repairs to the property that equalled a years rent. And this on a house that was just rehabbed 12 months before….. This is just one example.

Bottom line is you need to fully trust your team that is helping find purchase and manage these properties. And you need to be realistic about NET CASH flow…. If someone is showing you a property and there is NO vacancy factor no monthly maintentance factor your not getting good numbers to evaluate your investment….

Clams of 15 to 30% cash on cash returns in my opinion are exagerated and one just needs to use the formula that I have laid out above to get to best case and worse case scenerio.

After watching this whole market come full circle, We are getting back into the equity side of the business as well as staying in the Debt side.

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As I promised, I have calculated the rental yields for all US states. You can see the table here:

http://www.buyingpropertyinusa.net/market-research/price-to-rent-ratio-and-gross-rental-yield-in-usa

Hopefully it will help some investors with the choice of the US state to invest in..

[/quote]

Curious as to why everyone thinks they need to create an LLC to take title to property in the US.

EIN numbers and LLC's at least for US citizens are created in a matter of hours not weeks.