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It is with great interest that I'm reading this thread. I can definitely appreciate the attraction of cash flow, but given the state of the market, capital gains with a medium to long term view seems a more sensible option.
If it's too good to be true, it probably is.
Now full disclosure, I work in New York real estate and feel that if you are willing and able, you can make a great return on your investment here. I work with a team of lenders and legal advisors to structure investments for foreign nationals. It's not as difficult as you would think. You can finance up to 65%, but that doesn't come for free. Lenders expect a 'relationship', and there will be management fees and legal fees associated with establishing your presence here.
I feel it's all pretty simple. Since 2007 property values in NYC have fallen, on average mind you, by around 30% give or take. Over the past year they have risen by between 7 and 14%, depending on your source. Prices in Soho have risen by 27%! Inventory is down, as is the vacancy rate in rentals. The view here is that the market is not necessarily rising, but it has stabilised. Lending is tight, but gradually easing. Property developers are once again eyeing vacant lots and seriously looking at jump-starting stalled projects. One in ten private sector jobs have been created here.
I feel like the metrics are beginning to pile up – and that's not to take anything away from the rest of the country. As a foreigner, I can connect you to lenders for a 30 year fixed, with 65% loan to value for 5.125% – obviously these are not constant.
Take a look down the road. Open your eyes. What do you see?
You should definitely look before you leap. But one you've decided, action is the obvious next step.
Bestof luck with the adventure, and feel free to give me a yell.
Rob
[email protected]British Buyer wrote:I liked the title of this topic, so I figure I may as well add my two cents worth of input.
I know nothing about World Changer, but what he wrote in the opening post is spot on. I only hope that he isn't anything like many of the subsequent posters, who are clearly trying to drum up support for their own business concerns.
It is rather ironic that in a thread intended to warn people against their desire to believe all they hear (namely that it's possible to make 20% annual rental returns), a number of agents trying to sell you just such a "product" would post self-promoting propoganda.
Here's my take on the US market at present:
1. It's a once in a lifetime opportunity. It's the biggest property balls-up since the Great Depression. In the last decade property has rocketed in every country I can think of (except a few in Africa, although even there there are some amazing success stories). Yet in the same time-frame, the US managed to lead the world up then fizzle all the way back down, luckily without sucking the rest of the world into the abyss. Mark my words, we will NEVER again see US$50,000 houses in well-known US cities in our lifetimes!
2. Everyone using this website is way too obsessed about making a decent rental return. In my property investing experience, the real money is made when the price doubles (or preferably triples). People who should be worrying about rental returns are aged 50 and above, and are looking for a way to finance their retirement. If you're young and have the balls, go for the property appreciation rather than the rental return. Heck, if you're young you'll soon get bored with renting the place out, and as soon as you see the price inflate you'll want to flip it so as to cash out your profits and BUY MORE.
3. I have no wish to pick any fights with any person using this site who has had what it takes to go to the States and set up "people on the ground" as you Aussies all like to state. They are courageous, and they deserve respect and profits. However, here's my only advice to them:
Believe in your service. Become more professional. Dont' hide anything. State everything clearly, including whatever problems you've encountered, and how much you're making. You're assisting all those people stuck in their jobs back home who'd never be able to buy a property without you. So be proud, be open, and be honest. And don't waste your time in pointless bickering or negative posts on the internet. I reckon there is at best 2 years left of buying Short Sales and REO's. TIme is of the essence.
4. In conclusion: just buy something in the US without procrastinating so much that you never get round to doing it. If you can go over yourself and buy yourself, do so. And don't worry so much about the rental returns. If you do end up getting more than 10%, that's great. If you are barely able to pay your monthly property taxes and HOA fees (if it's a condo) even after renting it out, so be it. Because nobody knows which horse will win the race at this point: the property in Detroit with good rental returns but questionable future, or the one in New York which already costs an arm and a leg, doesn't earn you much rent, yet may well double due to its location. But if you can't go over yourself, then enlist the help of one of those recently-opened "teams on the ground", so long as you feel that they're exhibiting sufficient integrity.
Over and out
Steve from ChinaI find all of this very interesting.
Formerly from Sydney, I'm married and living in New York for the forseeable future. Given the opportunities here, I feel I am better placed to represent my fellow countrymen than many others. I work in a medium size Manhattan real estate office, and am currently building a team of lenders and legal professionals, both here and in Australia, to make the process of investing in and purchasing real estate as transparent as possible, to minimise exposure to tax, both here and abroad, and to take advantage of the current low interest rates.
The market here is unlike the rest of the country – or anywhere else for that matter! You will not find properties for less than 100k returning $12,000pa. What you will find is a market where the demand is constant and values ready to rise. It appears we have suffered a lot less than the rest of the country due in part to the prevalence of coops. These are apartment buildings where owners buy shares in the building and effectively have a proprietary lease on their apartment. It all sounds complicated, but by regulating the comings and goings of owners, coop boards have managed to stop the downward spiral of the New York market.
If you have been investigating options to purchase real estate here in the US and, you are quite possibly impressed by the concept of $10,000 homes in Michigan or down in Florida, allegedly making positive returns. I cannot speak for them.
I feel strongly that NY real estate represents good value and that signs of a rebound are promising. Compound this with the potential for the $US to adjust, with some believing it to be as much as 10% undervalued relative to its long-term value, and the potential gains for an Australian investor are substantial.
http://www.ft.com/cms/s/0/957781d4-df90-11df-bed9-00144feabdc0.html?ftcamp=rss
According to the Real Estate Board of NY (REBNY), New York City has seen the average price of a home rise 7% over last year. Others firms specialising in specific parts of the city put the figure at 14%. The Upper East Side recorded the largest 3rd quarter sales volume, while SoHo achieved a 27% rise in median sales prices over the same period last year.
"New York City real estate appeals to a much broader segment than the rest of the country, attracting foreign and local money alike," says Michael Slattery, senior vice president of the real-estate board. "Manhattan is the dominant force here but the strength of the market is spread throughout the boroughs."
http://online.wsj.com/article/SB10001424052748703440004575548461232667490.html?mod=wsj_share_facebook
Homes are selling more quickly, and supply of homes for sale has grown much tighter, down about 25% from March 2009. Indicators suggest the market is stabilising more than strengthening.
http://money.cnn.com/2010/10/01/real_estate/manhattan_home_prices/index.htm
When measuring vacancy, the (New York) market easily outperformed the national 7.2% rate. Manhattan had just 0.99% of units available in the third quarter, up a hair from the second quarter, but down from 1.71% a year ago, according to a separate market report by Citi Habitats.
http://online.wsj.com/article/SB10001424052748703735804575536300915079366.html?mod=wsj_share_facebook
The Real Estate Group publishes a comprehensive and detailed Manhattan Market Report each month. It will give you an indication of median rental prices throughout the city.
http://www.tregny.com/manhattan_rental_market_reportI think you need to work out a budget, arrange financing and plan your strategy. NY doesn't offer some crazy return. It will be steady and reliable – in as much as it can be in this economy. As there is a constant demand for apartments due to the steady influx of residents and the relative lack of housing stock, you can rest assured that it will not remain vacant for a long period.
Feel free to give me a yell if you have any thought, comments or queries.
[email protected]Hello Everyone.
It's with great interest that I've been following this and other threads regarding US real estate opportunities.
I left Sydney in 2001 and travelled the world before landing here in New York four years ago. I live in Brooklyn and work in real estate in Manhattan, specialising in Chelsea and the West Village. These two neighbourhoods have seen some of the most sustained demand, due in large part to their cache: cobble stone streets, restaurants, galleries, night clubs and boutiques.
This is the New York of Sex and the City and other movies, home to stars like Uma Thurman and Milla Jovovich. Vancancy rates for rentals in these neighbourhoods have run at less than 0.63% compared to a national average of 7%+.
I'm not looking to sell distressed real estate at a crazy bargain, nor am I some shonky fly-by-nighter. I work days at an established boutique office on 23rd and Park.
I'm curious to hear if there are any Australian investors who have or are considering more blue chip real estate opportunities. While NY has sufferred the recent collapse, it is currently levelling out and in fact, on average, has seen 7%+ increases over the last 12 months. This, as my fellow New Yorker's like to remind me, is the centre of the universe: fashion, finance, media, arts. It's all here in a great big melting pot.
I have some incredibly detailed figures on market rental rates all through the city and links with lenders and lawyers both here and in Australia with experience in foreign investors. With the exchange rate as it currently is, at a 27 year high, and the market stabilising if not nosing upward, it seems foolish not to consider that New York pied a terre – which ironically enough, you can no longer get in Paris!
Feel free to cantact me if you have any thoughts, comments or queries.
Regards!
