I try and show clients real examples. What I find exciting is that even though prices are higher than they were 2 years ago the big difference today is that on commercial property which includes apartment complexes we can borrow 60% as non-recourse loan. That means that the loan is only based on the asset. I am talking about loans from  commercial banks at rates around 5%. So from my point of view this is very attractive especially when you look at the cash on cash returns.

We recently brought an office building with fantastic returns and by the time it is fully let the net returns will be around 17% with a cash on cash of around 35%. Now I am not saying that all deals are this good. But if you can buy an apartment complex for $350,000 with a cash on cash return of 14% it a great deal compared to anything you can buy in Australia.

My clients are generally already experienced investors and in most cases have purchased in America before. They are generally looking for good opportunities with both cash flow and growth. I generally will not deal with someone who is buying in America because they cannot afford Australia. I explain that if you are going to invest in America then you need to build a separate income stream.

I think there are great opportunities in the United States however due diligence is everything and the quality of people you deal with on the ground will make all the difference. 

You are good Freckle  lol

However if in America you can buy properties with strong rental demand and you have positive cash flow what is the risk

Well personally since I can borrow 60% of the value as a non-recourse loan I would buy an apartment complex in the United States for around $700,000 and be getting both growth and positive cash flow from day one.

I believe that it is a great time to buy in the United States. The economy is recovering and there is no doubt that both prices and rental demand are on the rise.

If we look at commercial property and that can include apartment complexes you can fund the property with 40% down and borrow 60% as non-recourse finance. hat means that the loan is only based on the asset. At the end of the day the banks consider that this is a low risk. You are putting up a 40% deposit in a rising market. From an investors point of view you could buy a property in America tat you could not buy in Australia because from day one these deals are positive cash flow. We recently brought an office building that will return 35% cash on cash. The net return on many apartment buildings will return anywhere from 12-17% and the cash on cash returns to be far higher. I believe America will be a great market to invest in over the next few years. At one point it may have been a little cheaper but the ability to leverage is a game changer.

I would certainly look closely at Jamies comments. I do not have a problem with apartments especially in Brisbane. However there are few CBD markets that have performed well as investments. You to buy an apartment that would appeal to an owner occupier because they will in most cases have a solid capital growth. But stay away from small apartments and overall stay clear of the CBD there are plenty of inner city suburbs that will be a much better investment.

Any company that promotes city properties in the city Docklands  area should be very careful. There is a huge over supply of these sorts of properties with as many as 4000 coming out of the ground. Many are small apartments which will almost certainly go backwards in value over the next few years.

The reason so many of these groups are promoting these third rate investments is because in many cases they are getting as much as 8% commission. There are plenty of much better investments in Melbourne and else wear.

Well there are still much investments around than car parks

That is certainly a big problem in Australia as most quotes are gross returns. Only net returns matter

If my view if you are targeting $30,000 houses you will not get much. I tend to focus on Florida which is a good market but generally to get anything worth while you need to look into the $50,000 to $70,000 range. Because we get them from the bank they are under retail price.

However Australia is full of US investors who have lost money. Most of them just do not know it yet.

The secret behind investing well in the states will be determined by who you are dealing with on the ground. American have a can do attitude however may of them talk big but do not deliver. The people on this post are experienced as am I . You would do well to get someone you trust on the ground and then take there advice. Do it on your own and do it at your own peril. 

I tend to agree with Jamie

It is important to remember that interest rates are at record lows but will they remain at that point. Unlikely. So you buy a property in a poor area with little or no growth at 6% but then in a year or so rates go back to 7% guess what it is no longer positive anyway and you are stuck with a second rate investment.

Look at better areas I think Brisbane is good value at present and buy the best you can with your money