A simple search on the internet shows there is no end of Australian property spruikers who claim there are endless opportunities in investing in the United States. Likewise, there are also thousands of websites on the internet that are warning investors not to invest there for several reasons. Some of these reasons include; poor rental returns, investing in poor areas, buying overvalued properties etc.

I'm new to investing and I'm currently restructing my finances so I can invest in the United States. I'm not the most savvy investor on the planet but I do believe in good old fashion common sense.

Here are my observations as follows;

Warnings about one-stop-shop property spruikers:
Consumer alert websites are currently advising to watch out for those Australian companies that offer a full service for US property market investing. These are the type of companies that provide legal and financial advice as well as act as buyers advocates in the US. Being careful about using these type of companies is a no brainer. However, my view is that if I pay a one-stop-shop company a fee to do everything and still get the return I want then it's a win-win situation for both parties.

I've currently engaged such a company and they've been very up front with all the fees I need to pay. As a result, I've factored in these fees and determined that I should still be able to meet my financial goals long term. The only warning I will abide by is when they offer both the legal work and finance lending as well. I'm more than happy to take on financial advice but I will only go to a reputable lender (such as a bank) for money. I will also never let a company do my legal work. I'll only trust my personal lawyer which should be a reasonable expectation on the company's behalf.

Warnings about 'not seeing the property':
There is certainly a danger about buying something you haven't seen. However, my view is that a person has two choices. They can either jump on a plane and go see the property for themselves. Or, they can do their own research from the comforts of their home computer and find out if a property is worth investing in. I've recently found that Zillow.com has more than enough information to satisfy my information needs about a property. Furthermore there is also Wikipedia and Google Maps (for street view) if I want to know more about a particular area. My point here is that I'm not convinced that there is a logical need to jump on a plane and waste one's time to visit a place before committing to something. With enough on-line research there should'nt be a need to personally view a place. I could be wrong here and would be interested in hearing the thoughts of others.

Warnings about 'overvalued' property:
Again, Zillow.com has all the historical information one needs about a particular property. If a property was worth 200K in 2006 but is only worth 80K in December 2010 then something suggests the property may be worth buying. Straight away this sort of information tells me that the property is severely undervalued and has potential long term growth. When the US market stabilizes then there should be no reason why the property should'nt be worth more than its current undervalued price.

Warnings about buying in 'bad neighborhoods'
There are some classic consumer warnings about Australian investors buying properties in poor neighborhoods after receiving some poor advice from spruikers. My view is that if an investor is buying in an area that has high unemployment then they should'nt be too upset if their property doesn't receive the returns they were initially after. Last year, consumer alert websites referred to investors who spent little money on buying properties in Detroit. I've personally never been there but I know enough about Detroit to know that it's like a warzone in some areas. My point is that a property must pass the common sense test before an investor should commit themselves. My research has led me to only invest in four states, and very specific suburbs, in the entire continental USA.

At the end of the day, I'm just a 32 year old investor who wants to learn more about overseas property investing. Last month I was completely disillusioned with the whole issue but now I feel I've got a handle on the topic after talking to a number of experts and reading websites like this one.

I would be interested in hearing others thoughts about potential scams and 'over-hyped' consumer alert websites too. I just feel that the current US market is simply a too good of an opportunity to let go. Yet, I'm being constantly bombarded by people who advise me to do nothing and just focus on the market here in Australia.

Thoughts?

Regards,

Runway.

The US state I have come to the conclusion would be best to invest mainly due to the good demographics, high yields, excellent job prospects and possible future capital growth would be Florida. Another key issue is that it is easier to obtain finance in Florida compared to many other states.

The reason I choose multiunit complexes is that they obtain higher yields and the banks are are offloading their REO’s of mulitunits at cheaper prices by the unit than single family homes.

The only things holding me back at the moment are;

1. which entity to set up ownership to obtain finance as well as protecting me against being sued.
2. where to obtain finance for such projects,
3. where to find a good refurb and property management company
4. which real estate or REO agent that can obtain these types of deals.

If anyone in the forum can give any advice/recommendation I would most appreciate it.

Thanks in advance.

Anthony

Hi Jeff,

Can you please provide us with your Tax Accountants details. Like Bev said, it's so ahrd to sift through all the information and dechipher the best moves, a infustry professional may be a good option.

Many thanks,

Zita