Forum Replies Created
“I do recommend Bank of America if you are building your credit, by getting their get their secured credit card. After about 6 months you should be able to get an unsecured card and then close your account.”
We were told a similar thing.If any Aussie has succeeded in getting an unsecured credit card in the US within the last couple of years, we would love to hear about it!
Our only option is to use family in USA to go guarantor for us, which we don’t want to have to do.We are living in US, with a business visa, have banked with WF for 2 yrs plus had a secured credit card with them for 18 months, and they won’t give any credit to anyone without permanent residency. We have little confidence that we can do any better with any other bank.
Happy to be shown to be wrong though!
Ruth
propertyinvestingusa.comHi Jay,
We agree, DIY is exhausting and slow, the time lag negates some (or all) of the profits as compared to good tradies and labourers who may cost a bit more, (but way less than comparables in Aus!) and get the job done more efficiently.
Plus, we need to use local workers to comply with our visa.
Plus, to rehab without a registered contractor makes it very hard to sell to someone who needs a bank loan, as nearly all will.Ruth
propertyinvestingusa.comI'm not your client yet, Jay!
But thanks, will look at your hardware deals!
Hi Manna, thanks, website should be fixed now.
Hi Jay,
Yes, your comments are not far from reflective of the current market in Phoenix.
Except the one in three profit from rehabs! Much better than that! That is where our own experience in property, combined with our local contacts with long-standing hands-on knowledge in the Phoenix market are a big bonus.
Aussie's will relate to the renovation models used in Australia, where stamp duty has to be paid on purchases, before rehab costs.And the purchase costs and materials and labour for rehabs are still way higher than in USA. In a flat market (18 months ago) we were making money in Phoenix. In a steadily rising market now in Phoenix, there is more competition, but more potential to profit. Rehabs that work in a flat market will do better, in general, with a market that is appreciating. However, we do not base our numbers on speculation fo market rising, but on the market right now.
Good local contacts and careful monitoring of rehab progress, mean that we can get some work done at well below retail costs, which adds more perceived value than actual cost, representing a benefit for the end purchaser.
New contruction is starting again tentatively in Phoenix, in limited numbers in certain areas. It will be a while until it gains strong momentum. And the rehabs are still a lot cheaper for the buyer, than a new house.Some of our clients will chose to do their rehab in their own LLC, and that is fine, we will take a share in their profits.
Ruth
propertyinvestingusa.comHi Jay,
A fair enough question.
We are managing fix and flips, mostly through joint venturing with our clients.
That way, we have a vested interest in their investing success.
Can I point out, the end buyer is the public, generally a home buyer. We are NOT selling rehabbed houses at inflated prices to unsuspecting Aussie investors who think they are getting a bargain.As seasoned investors in Australia, we have a good understanding of the requirements and mindset of Aussie investors looking to invest in USA, and with a very good working knowledge of real estate in Australia, are able to point out a lot of the differences in the way things are done in the USA.
As you would know, the advantage to being on the ground, is that you are able to have a much closer sense of the movement in the market. As time goes on, we will continue to change our investing direction as the market moves.
In the meantime, we are brushing up on some further local education to position ourselves, and our clients, for success.
(Certainly some Canadians are buying winter homes for themselves, how many are purely investing is difficult to ascertain. I don't know if such statistics are available!)
Regards,
Ruth
propertyinvestingusa.comWe have insured empty houses with American Modern, from Aus at the time.They were empty due to being rehabbed, and we paid a premium also.
Have not been rejected by an insurance company, when trying to insure from Aus.Ruth
propertyinvestingusa.comWe have transferred money from Aus to USA via OZForex, straight into our Wells Fargo account.
Took 2 days.
I'm sure OzForex can do it in reverse.If you call OzForex, they'll tell you if they can't send money from USA back to Aus.
Ruth
propertyinvestingusa.comIt's true, not many Americans know what an ITIN is, but in many cases we have been able to use our ITIN and that has worked.
But not in borrowing from any bank.Mihovi, thanks for sharing. You seem to have hit about the same wall, apparently because you don't live in USA, even though you have had a credit history here in the past. But they are not saying it is due to no #SSN. Is it that the banks are very cautious after the GFC? I think so.
Was the Vegas loan attempt thru a bank, or hard money loan? (If you don't mind me asking.)Jay, US notaries obviously have little or no training!
Funnily enough, the 2 different Aussie notaries we used in Australia, were both entirely unfamiliar with US house sales paperwork. They did peruse the paperwork, ask us quite a few questions, and signed the documents according to our US realtor's sticky note instructions on the papers, and our prompting! Aussie law background is no help for signing o'seas papers.Debra, an immigration lawyer can help advise you which visa suits your business plan, but of course can't tell you what your business plan should be. May be helpful for you, to clarify what way to go. PM me if you would like a recommendation to our immigration attorney.
Ruth
propertyinvestingusa.com
Phoenix. AZ
Interesting, sjs….
It is our current experience that, having a 16 month banking history including their ‘secured’ credit cards, even ‘our’ bank will not lend to us on our ITIN. We can’t even apply for a real credit card without a #SSN, which is not the initial info we were given.
We can’t borrow to buy a vehicle (purpose: to borrow to build FICO), even putting 50% down.In fact, we have no FICO score on 2/3 of the credit agencies, because we have no #SSN. So we can’t borrow because we have no FICO because we have no #SSN.
Despite 2 IRS returns in USA, etc.Thankfully for us, our #SSN are only days away in the mail.
Anyone on the forum who has actually borrowed from a us bank without a #SSN recently?
I’m sure this will be a hot topic for many!Ruth
propertyinvestingusa.com
Phoenix AZThanks for the clarification of notary at point of law, lawsjs.
Complex!True, you don’t need a #SSN to open a US bank account.
But post what we Aussies called the GFC, I don’t know if any Aussie investor has borrowed from a US bank without a #SSN.So as a pre-GFC known borrower, you personally are still able to borrow in US (I presume) without current residency or #SSN.
I doubt if anyone has been able to start borrowing here post GFC as a new client, and a foreign non-resident without #SSN(?)
But would be interested to hear if that has been someone’s experience?Ruth
Propertyinvestingusa.com
Phoenix AZFrom our experiences of selling US property while living in Aus,
A US notary is easily located by going to the website notarypublic.com.au
You just put in your location, and the closest notaries to you will come up.
Most notaries in Aus are solicitors.You do not need to go to a US Embassy.
But you will need to pay, $50-100 per document is standard.
A good question to ask, when you ring to make an appointment!Ruth
propertyinvestingusa.comWe have found the above info to be true,
Namely that you do have to be in the States to set up a bank account. unless you have very big contacts there.
I think it has to be a notary who will personally vouch for you, ie has met you in person and will I.D. you in Aus with your Aussie passport.
You certainly need a real US address (not a post office box) for mail from your US bank.Make sure your bank operates in the area you are doing business! Not at all necessarily so.
Don't expect Aussie interest rates and terms! You'd be dreaming!
Don't expect to ever borrow from a US bank without a social security number (ie a visa and living in USA).
This is our experience, but others may know of a different way…Look at transferring money through a foreign exchange group (we use and like OzForex.)
Quick and easy, much cheaper than using either an Aus or US bank to transfer money.Ruth
propertyinvestingusa.comHi Debra,
We have E2 visas and are from Sydney, now in Phoenix AZ.
The E2 visa requirement is not just about you investing at least $100,000 in USA.
It is about having a company that will be viable and actually employs people (must be legal US residents other than you and your partner, if applicable. And also, about renting commercial space to run your business from.
They do not regard a house (or several houses) as irrevocable investment in USA, as houses can then be sold.
I'm not sure that you could do that on the basis of having 2 or 3 houses which you self manage. And paying a manager a full time wage to manage 3 houses would not be cost effective.They don't want to know that you can afford to provide for yourselves, and even make money for yourselves over here.
It's about providing employment, not just using subcontractors. (Which to a US person, means security of income, health insurance – which if someone loses a job, they generally lose their health insurance as they can't pay it themselves.)From one who's been through the system.
There will be a way you can go, but keep thinking….
Maybe an immigration attorney would be a good place to start if this is a "must" for you.
Immigration lawyers can tend to concentrate on one specific area, eg business visas.
It would be helpful to define how you want to pursue a visa, to get the expert help you need in this field.Kind regards,
Ruth
propertyinvesting.comA few quick facts to straighten your misconceptions,
Neither house was a mobile home.Fix and flips takes a lot of specific expertise and most realtors don't have the skills to pick a fix and flip. Their training is in selling houses, not picking rehab deals.
A realtor in general, of course wants to sell houses and Aussie investors should beware of just buying any house they see on the net, including for buy and hold. How did you know your exact area? A visit once or twice will not help when looking on the net from Aus. Neighbourhoods here can change street by street. As with many US cities.
We already have the connections, and are building our team.We have been visiting the US annually since 2002 to visit family, and travel, including looking at property. We were in USA for over 10 weeks last year.
The USA Power Pack has been a useful tool which has helped us to know some of the many differences in set up and process in USA.We are not here to "work" in a job. All out time and effort go into our business, to fast tracking our progress. An E2 visa does not allow the holder to work a paid job.
We are not here to property manage, (and fix and flips do not require property managers as they are not rented) but will follow up with any client's property management in person, as required.I am done with defending ourselves, readers will make up their own minds.
Well, lawsjs,
I'm not sure whether to defend ourselves or not even bother.
Anonymous people with a largely unknown track record, apart from what they have chosen to disclose online, are ok to throw mud at people they do not know.
And people like us who have and are, putting a lot of time and effort into specialising in a new investing area in addition to a long history of success and education in Australian property, should have an even playing field.Let me start by saying, I think it's great that you have invested leveraging off someone else's knowledge. A wise move, as many will agree. I have no reason to have any problem with your US agent or the service she is providing, although I do not know her at all.
Our lack of experience is relative.
If you are familiar with the steps in becoming an expert, they go from not knowing what you don't know, to finding out what questions to ask, to learning from personal experience, and applying their ongoing knowledge to explore further questions as they arise. We are partnering with, and being mentored by, people with a proven track record on the ground. We are learning new things every day. Dare I suggest, our ignorance is way more aware and well advised than others'. And no, I am not throwing that as a barb to you personally.
Our connections can save people time (how long does it take to arrive in a new city and meet competent rehab people?)
They can help people earn a good profit with well-managed risk, and we will keep them updated frequently and personally monitor the progress. All work is done with registered contractors, and our clients only buy through qualified realtors who have expertise in their field. And the property is in the name of the client's LLC.
We are on the ground, and have the knowledge to research all of the requirements for a good cash flow property. We are driving through neighbourhoods we have already researched, and already have very good personal knowledge through our 16 months of research and personal experience in this market. We will not misrepresent any investment for the sake of making money from someone, but will only put forward a deal that we would consider worthy of our own purchase.We are not charging any upfront fees.
I take issue with you slamming our endeavours with no knowledge of us as people, as investors, or how much work we have put into this venture. And as to our posts conveying a lack of experience, an E2 visa is not only about investing $100,000 minimum in USA. It is about employment created in the USA, about leasing space, about a business plan that US immigration considers is likely to be boost in some way to the local economy.
I could go on.
Last but not least, we are honoured to be insulted in the same paragraph as Steve McKnight.
Ruth
propertyinvestingusa.comGosh, Gavin.We were sent the report by a concerned family member.
Sorry to hear of your dramas.So many shonks out there.
We are trying to give investors a US investing alternative with integrity, rather than charge a huge up front fee, and just sell something we marked up 40% plus, above its real value.
How do those people sleep at night!!
Ruth
propertyinvestingusa.comNo capital gains tax in USA.
Re selling problems?
We've sold 2 rehabbed houses in the past year, and done a IRS tax return after the first.
If you have a house in an area people want to live, in reasonable condition, it should sell at a reasonable price.
But sometimes buying off the net, its hard to realise the area could be one no-one chooses to live in, rents are just cheap so tenants feel stuck there….
If someone buys something like that at mark-up from a sales group, selling may be very hard, as the only buyer may be an out of state or out of country investor looking for a "bargain" too.I absolutely agree, don't rely on capital appreciation.You may get it, if you can hang on a few years and the area is "right" but don't let that be your only way to make it profitable. Cash flow, or create a profit.
Time in an area is crucial, as Steve figured, so I think you did well to stick to one niche in one market, Steve, and at least get an idea of what it would mean to invest there, and build some contacts.
Ruth
propertyinvestingusa.comHey Steve,
We agree with lots of your comments.
We have been in Phoenix for 11 days this time, and about 3 weeks (on 3 different trips) last year.To invest in USA as an Aussie without having a very good knowledge of the specific area you are investing in, is pretty risky.
And investing in the hope of capital growth, which may pay off, is speculative too.We are here to live, on a business visa to provide this service to investors in the Phoenix market.
We are building our network of local experts and will learn from their experience.
There is a great opportunity for renovation and selling here, but you have to know which areas will sell quickly, how much to sell for to get a quick sale, how to renovate according to the taste of Phoenix buyers….. very different to Aussie tastes! And of course, different neighbourhoods want different features.We are not so arrogant as to think we are area experts after 1 month!
Ruth.
propertyinvestingusa.com
Hey Von Krumm…
You will notice a leaning in the last few posts, towards buying for capital growth.
"Not that there's anything wrong with that."But this post is about cashflow positive property!
When buying for cashflow, you want to buy in an area that's not likely to go backwards eg one industry small town and they close the main factory. And you may want to determine a minimum size population, so you're not somewhere tiny.I would want to find property that is more than 2% return higher than the current interest rate you'll pay, after costs.
No use buying for cashflow and the $200,000 property gives you $1000 cashflow per year, after expenses, unless you are convinced that the rents are way under-valued for the local area, and demand is high. I don't look for marginal cashflow, but something worth my while paying stamp duty on.Cashflow for cashflow's sake, NOT expecting a high capital growth, is still a very good strategy for creating wealth and even becoming financially free. (ie not reliant on income from your job!)
If its CF+, great! After you've deducted all your holding costs, rates etc (see above article too.)
If the value did go down (worst case scenario) but your rent return gave you the same CF+, then that's not a tragedy. You are still getting the same CF+ you were happy to buy it with. (Unless you needed to sell for other reasons.)The trick is, how secure is your rent?
Is your unit likely to be vacant between tenants for a few months, for example?
You can usually rent out a place in a high vacancy area….. but only by dropping the rent to below market.
If you are only 1% CF+, it is a tight margin and your risk is higher, than if you were 4% CF+ and if the rent had to be dropped (I agree, worst case scenario again), maybe you'd still be CF+ 2% and feel safer with that.
