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Its all about what are standard business practice's in a given market or demographic… And understanding how our banking works here…. the concept of such a huge amount of americans that cannot get bank accounts is probably pretty foriegn to the AU investors. And like you said the amount of fraud is rampant.. Title companies and closing attornies by and large will not accpet CASHIERS checks anymore and will only accept Wire transfers for settlements.. Too many fruadulant chashiers check. then the fruadster gets put on title and its a mess.
I wonder if ths would work… A nominee that is state side is included as a non owning member of the LLC and then gets the checking account. after a little time. this person resign's from the LLC and is taken off the the bank accounts signature card.. this happens all the time when business are sold or people come and go.. there by leaving the aussie investor as sole owner and only one on the account… Just spit ballin here
In addition each state has different level of information accessable by public record search's. Especailly what you can get on line… On line searchs by and large will not be adequate to protect one against unknown liens IRS etc etc… Just for instance in Oregon Seniors over 65 can defer their annual property tax's until thier death or the sale of their home it has to be their personal residence. And the only way you will know if there are deferred tax's is to call a special department at the county tax collector and get the info its not avalaible on line. I learned the hard way on this one I bought a court house step foreclosure only to find out about 10k of senior defferal… We still did fine on the property but it was a surprise
yes public record will disclose liens mortgages tax's etc.. however a title search by a title co. or title abstractor is the only 100% way that you can be sure your buying a property with clear and marketable title.
what happens in the US market is that if your buying from reputable people they will basically know the condition of the title prior to marketing and then you order the title work to check liens etc. you do not do that up front. AS all contracts in the US are subject to seller providing whats called marketable title.. Its the buyers option to kill the deal. the only cost you would be out would be the cost of the preliminary title report 200 bucks or so.
NO LLC does not protect buyer from Liens or encumberances.. Its simply a vesting method.. Like buying in your personal name.. a coperate name.. and LLC name. the only protection an LLC gives is for liablity from someone sueing because there is something wrong with the property. Or for privacy issues. or to cirumvent the title seasoning rules.
Andy the reason the Aussies can collect weekly rent is very simple.
The renters are not like our renters here in the US that are so credit challanged The Aussies by and large do not use or accept cheques their tenants all have electronic banking so they just set up electronic transfers for every friday or whatever day of the week that is agreed upon and the money just shows up… Now our tenant base especially in the Mid west and South and in the class of property most turn key guys work with as you know probably half do not even have a checking account and can't get one.. They pay rent through Money orders delivered to your office or cashiers checks or CASH.. And they rarely pay on the same day every month…
I think this is one of the things that frustrates AU investors is when the rent is due on the 1st they want to see funds in their account on the second that is what they are used to and of course its just a learning experence here in the US.. AS you know the majority of Property managers either pay at the end of the month for rent colleceted at the first or they pay the next month as by law they need collected funds ( good funds) before they can send checks or transfer money from their client trust accounts.
typically liens encumberance's mortgages etc are the reponsability of the seller to pay at settlement as you allude to. It would come out of the sellers proceeds.
To see if a loan is assumable or has an alienation clause ( due on Sale) you would have attorney or title co. pull the existing mortgage or trust deed from public records and reivew the language. Most institutional type Mortgages or Trust Deeds will have an Alienation Clause.. And many private mortages or Trust Deeds as well.
However there is nothing keeping you from buying a property SUBJECT TOO any of the above and its your closing attorney or Escrow company that should be advising you if these exisit.. If you are getting title insurance and 90% of the buyers do.. You will get what is called a Title Commitment or Preliminary title report, depending on where you are in the country different areas use different terminology. this report is prepared by the Title Insurance provider and will list all liens encumbrance's Mortgages Deeds of Trust back tax's excetra.. You simply read this document and ask for any all of it to be paid at settlement. Pretty basic stuff as long as your dealing with reputable people.
Now there is the model of buying property by simply changing ownership in an LLC.. which does not afford you the same protections. ONe should then order their own title policy and make sure title is in a condition that you approve before you take ownership of property via a sale of an LLC interest.
JLH
Freckle, Here in white bread oregon the crime rate is about as low as it gets in the US… seriously look it up.. I don't lock my car I don't lock my house at night… We build houses here and bring in 25,000 worth of lumber with no security.. In the South or in Detroit it would be stolen before you could nail it up… Not the case in Oregon. WE have Honor box's at many farms.. they will put a little stand out on the street with whatever they are selling tomato's flowers etc. with a sign that says what the price is and a can to put your money in..and this is still going on in the metro area !!!!!!!!!!!
Andy,, the Aussie's are much smarter than us… they charge by the week because???? well there are 52 weeks in a year. If you rent by the month you get 12 months of rent or 48 weeks worth… Now that that light bulb went off I bet you will start charging your tenats by the week as well. Hell give them a small discount, your collections go up and your return is another 10% higher…. Brillant those Aussies.
Frekle fleas on a dogs back is the least of anyones problems in the US……. Its dog EAT dog here
Yes I have been a fellow panelist with JP at investor events in LA… Peak is a private lender like I am, I was speaking more of a larger institutional lender.. If you look at the Scottsman guide you will see very few lenders will loan under 100k and some will go to 50k. I think what the last post was asking for was a refi of free and clear property.
Many of the properties are selling for less than the minimum loan amount that lenders will go.. So no matter what you do you can't get a long term loan
Ok I get it overseas deals to you mean over the pacific to Australia not to the US.. There are all manner of "how to assign" class's and written articles for the US. Be pretty tough to do without being on the scene and being able to pull the trigger quickly.
Anyone can wholesale properties, although being in AU you will find it very difficult to do this as the local US boys will beat you to almost every deal.. What you could do if you have a significant amount of Cash is provide funds for a wholesaler…as an investor. However extreme due diligence must be performed on anyone you would invest with. the US real estate market is rife with charlatons spruiekers, crooks, liars, cheats , thieves, felons and all other manner of bad business people.. There are also great people to do business with however you must find them and you will want to do the following on anyone you would provide capital for.l……. 1). Criminal background check ( there are services in the US that do a nationwide search for 50 bucks).. 2. credit report 3. Banking references with proof of funds IE copy of bank account records. Lawyer and CPA references are no good these are for fee Vendors that will just talk the party line…. When I ran TWH I had all of those avalaible for our client investor upon request. I would think if you had 250 to 500k you could get someone's attention including mine:)
Andy, Not mold it was feces and other garbage. the adjuster would not go in the house. and had the bio hazard company come and clean it before he would go back in and give me the insurance quote for repairs.. the bio company took the sheet rock out. It was the worst I have personally seen.. and it was one of my personal properties. that I paid 130k for.. So not in the hood or anything….. Although systems thefts happen all over the mid west and south east.. I was sitting at my closing attorneys office in Stockbridge ( which is a suberb of Atlanta and definatly a nice area and asked him why it was so hot in his office.. His reply
Our condenser units were stolen last night!! I did have my first theft in Oregon by the by this year as well someone walked off with the condenser unit.. And that was a 300k house.ENG Don't look for lending requirements to make some sweeping change.. The underwriting guidelines for Owner ocuppied will stay were they are for the long term.. Heck with FHA loans its still only 3% down.. and rates are great.. You just need decent credit a Job.. The NO money down loans and bad credit loans just are not coming back. One would have to be a fool to bring that product to market for homeowners. And the banks have long memories. In my opinoin if a young family or single person or domestic partners cannot coble together 3% plus settlement costs they should not be buying a home and should stay as renters. And if you have bad credit its because you can't manage your income vis a vi your expenses.. ( with the exception of Medical debt) … So what this leads to is that there are whole sections of many of the markets that is popular for turn key investing that will NEVER come back to home ownership and will always be trashflow housing period. Any one who is buying properties in the credit challenged low end demographic will have a rental for ever basically. So to buy those types of homes with the idea that banks are going to lend again and you will make some big capital growth because Owner ocuppied will suddenly be able to get financing and move back into these neighborhoods is really and ill conceived notion. Those US citizens that want to own homes will be looking at nicer neighborhoods where there are fellow home owners not neighborhoods that are 50% or more rentals. Now granted the Trashflow houses will give you the higher yields however the Capital Growth is going to be in the properties that are much nicer than these and as such an investor has to pay far more than 25 to 50k for them… Just like my TWH company ( which by the way I just got bought out of last week Yah) our GA portfolio was sold to a hedge fund. Here on the west coast housing for owner occ's has rebounded substantially, however we are talking medium home prices 250 to 275.. with a really nice sweet spot at 350 to 425k.. And new construction is red hot in Portland Or. In the last 18 months I have sold each of my new builds prior to completion. I have 11 houses going now and 7 on the market at this time of the 7 on the market 5 were sold in the first 30 days of construction. When you look at middle america markets you will see new construction in the low 100's to mid 100's this is were your first time buyers are going to be buying.. Same in Texas and Florida.. they are not going to be buying in beat up old rental neighborhoods at least thats my personal opinion on the subject.
Every bank in the US has to follow the Patriot act.. NO bank can just make there own rules. If they do they will get their hands slapped.
Freckle its blackSTONE not blackROCK… I live in Oregon but I do not partake in the Oregon state Pension fund. It is really going to be interesting to see how this all unfolds. Blackstone and other hedge funds could be just like banks where they unload properties at huge loss's.. The Hedge funds were late to the game.. When i bought atlanta I bought my houses with my investors for half of what blackstone paid.. I am not sure they have any huge equity gain.. Now they bought a billion in CA and that market could resuce the whole enchilada ( US term of Mexican origin)
Freckle, Blackstone is now securitizing their lease agreements to raise more capital.. So they raised capital to buy the asset then put a tenant in and wrapped up al lthe lease's and borrowed on them.. B Stone could be heading down a deep dark hole when rents fail to appear.. And anyone who has owned US rentals know that rents are anything but a certainty compared to AU and other countries.
they do certainly exist. one just has to pick the right neighborhoods.. If you get suckered into 15 to 25% returns then you will be in the Ghetto in Detroit and good luck
