Forum Replies Created
The previous sales data for 677 Alta Place regarding the $22,500 sale appears on the "Property Data" document Mike & Bron are giving to investors if they care to read it thoroughly, but is not mentioned in the promotion of the property. Is this just a "newbie" oversight perhaps, however it does have some bearing on the deal methinks, how it is promoted and if correct shows quite clearly how far prices have dropped in this part of town.$355k down to $22k wow, that's amazing.
and this from a born and bred Atlantan property investor after he perused the same documents…
"…. Its some tricky business here in Atlanta. Certainly there are seemingly amazing houses for the money all over the place, but to me location, location, location still rules.I generally do not focus at all on areas that I would not be comfortable going into. This does not mean there isn't money to be made. The Alta location is off Bankhead Ave and is unfortunately one of the most undesirable corridors in Atlanta"……
SORRY ABOUT ALL THE GOOBLEDEGOOK ABOVE BUT HERE IS A DEAL FROM MIKE & BRON THAT I HAVE RECEIVED
677 Alta Pl, Atlanta 30318 – Fantastic Dual income opportunity – 3 bedroom Duplex for $44,000
677 Alta Place is a 3 bedroom with 2 and a half bathroom duplex constructed in 2002. The property is situated at the end of a lovely, safe, quiet cul-de-sac street with lots of nearby services including a child care centre and the Marta bus stop around the corner.
We have been hunting high and low to be able to bring a quality dual income property in this price bracket to our investors – just check out the Sales Comparison data. As you will see the average similar property is on the market for around the 120K mark making this an absolute steal. The property was last sold in 2005 for $355,000 and has been valued by the county tax assessor at $355,100. You have the opportunity to pick it up for just $44,000. It has not been vandalised or destroyed like a lot of the properties we see which gives you an idea of the safety of the street.
There is a zip file attached with all the info that you will need to do your homework on this one.
Purchase price is $44,000
Renovations estimated at $40,000 – we think we have overestimated here but wish to work on this as a worst case scenario.
We are also working on a worst case scenario for rental at a minimum $850 each unit per month for a total of $1700 per month. Some similar duplex units are receiving $1300 – 1600 each side but they may have been initially rented some time ago which is why we have tried to under estimate the rent for the current economic market. If the figures work on our worst case scenarios then there is plenty of blue sky in this deal when the market turns around.
Gross yield is 24%
To make it tenant ready the outside and inside will require repainting – painting the outside will also give the property more street appeal and character.
One of the outside heating and AC units will need to be replaced. New hot water systems, carpet, kitchen appliances, light fittings in both units, tree removal out the front to avoid future damage to the property, replace broken window, etc. We are awaiting the quote back from the builder to confirm the renovation amount.
We have done a walk through video giving a thorough tour of the property at http://www.youtube.com/watch?v=rMNa2HSOuec
With a nett income of $15,500 each year and fantastic comparison data this one could be an opportunity to create a solid passive income stream as well as have the opportunity of reasonable future growth..
Let us know if you would like a contract or further information.
We are very excited to see someone benefit from investing in this fantastic deal….
Mike and Bron.
Couple of things …….
Forgot to add in the interest you would get on your $92kAUS you would get at the bank (6.5%) . Have to factor that in otherwise it may be better off in the bank. So add another $5400 to outgoings dropping your net income to $10k and return to 12%
I don’t see any contingency for maintenance.
Subtract $500 per unit and you are at $9k and 10.5% return.
I don’t see any contingency for utilities. Maybe the tenant pays but I dont think so.
Subtract $500 per unit – $8k and 9% return
Tax assessment is a guess… oh well it’s close enough.
Does that house look like it was ever worth $355k? No not really. Plus its out west of Atlanta CBD, not preferable for me personally. Shows you how much of a bubble there was. Property there is back to what it should have been worth in 07, 08, somewhere between $100 – $150k is my guess. Now at $44k that’s a good price but with $40k reno cost that brings it up close to what its worth at say $100k. Your real discount is 20 maybe 30% if its worth $120k
Not saying this is not a good deal for someone because there is an upside here, but is it worth it against the downside of being on the other side of the world.
Did a comp sales search of my own.
House just around the corner, 100 metres away – 8 beds 4 bath ( duplex) sold last Oct for $22,500 ( 8 S Eugenia Pl)
In fact this house at 677 apparently sold on the 10 june 09 for $22,500 as well.
http://www.ziprealty.com/homeinfo/GA/ATLANTA/30318/677-ALTA-PL-NW#headertop
100% return in 9 mths – not bad for the US market!
Nothing in the immediate area has sold in the last 3 mths for anything over $12k except one at $130k which is on the other side of the hwy
I have 2 value appraisals for 677 come in at $128k and $72k
If you renoed it and spent $84k and it valued at $72k you’d be a bit peeved.
It has been an interesting exercise conducting some due diligence on this forum. So far I have…..
You haven’t personally bought any houses in the US Vince, is that correct? You don’t own one $40k house that sold for $350k in 2006 with your name on the title even though you said that you love buying them?
You advertise assessed house values from 2006 and maybe 2007 when the boom was in full swing in Georgia, not 2008 when prices fell dramatically, nor 2009 when they continued to fall, nor 2010 as they continue to fall.
You receive a bigger commission per deal than the US realtor.
You sell houses that are banked owned property that may be valued at 50c in the dollar, which is very good, but may be valued at 90c in the dollar which is very average, but never 15c in the dollar as advertised, which is BS.
You do this from beautiful Byron Bay.
You haven’t been to Atlanta.
You seem to be very proficient in what you do but you do write self promoting drivel on this forum
The administrators on this forum need their ass kicked for allowing blatant advertising.
http://www.888wealthcreation.com/pdf/1601jonesboro.pdfHad a look at this link and the house looks very nice. When did the county assess it for $207,700? You don’t put a date to it.
Correct me if I am wrong, but I’d guess that was in 2006 or 2007. In 2008 according to tax file data, this house was worth $112,560 and with another 18 months of falling prices, I’d say this house is now worth $50k. Your investor bought it for $42k and after reno etc and your fees paid $55,658, about what it is worth with a good +CF return of $10k or a free house in 5 years. A pretty darn good result and with management issues maybe 6 years – still pretty darn good. The fact remains though, for examples sake, that this house is worth $50k and in 10 years time it could be worth…… $50k. Just kidding, but it is possible.Why don’t you put the current appraised value on these places instead of the price during the boom which is irrelevant now. And sweet to get 8% commission on these while you sit in Byron Bay – you get more than the US realtor! The truth IS out there.
I don’t begrudge you anything, I don’t take offense either, I truly think you believe in what you are doing and you have expertise in your field. My initial contribution was to get people to think before they act, do their due diligence on everything and everyone, make an educated decision and once they were happy with that decision to go for it. Now what I question is the transparency in your dealings with investors and the fact that on this forum so far, you cannot back up what you have said you have done.
In your advertising it would be clearer to have : This house was last bought for x amount, it is now worth only x amount, if you were to build it today, it would cost x amount to do so, but you can add value by rehabbing it and renting for x amount. Your return is x amount. Here is our network of people to help you. And by the way, I havent ever bought a house in Atlanta
I have seen an Atlanta house for sale that was advertised your way and last bought in 2006 for $300k+ but in fact was purchased 6 mths ago for $22,500 and selling to an Australian investor for $40-$50k.. Every house in the street was valued at $20-$30k. You’re not doing that are you?
I’m going to leave it there. No need to reply,(unless it’s a posting of that title) because I don’t care anymore. When you have bought some houses personally and tell people in your advertising all the facts then give me a holler.. now yer hear.
Avoid Stockdale & Leggo ( Frankston and Melton, Vic). The Melton agent I found was sending important company documents to a private address we didn’t live at instead of the company office, had no follow up systems in place and forgot to resign a lease amongst other things, the Frankston crew, I don’t have the time to say here, all of the hopelessly unprofessional systems they have in place. Avoid at all costs….. yours.
I now use RUN Property who are I think are nationwide, and so far so good. They have everything, as in your rental portfolio, online as well.I still dont see just one of the $40k house purchase titles with your name on it Vince. The one's you just love to buy remember?
Michael and Bronwyn, we are not arguing about the population of Atlanta or greater Atlanta or the fact that Wikipedia is not a credible source for anything. In fact we are not arguing at all. I repeat, I take my hat off to you both for getting out there and treading the sidewalks and getting the job done.
My point, which I made quite simply and plainly was that all is not what it seems and moreso when investing overseas and for people reading this forum, who are thinking of investing in America, then it is doubly important to do their due diligence on everything, including you guys and anyone else finding properties on their behalf. Me included.
I'm sorry you took my simplistic explanation of reality personally.
Vince on the other hand continues to post self purporting drivel and has yet to back up his claim or at least his flowery inference of buying numerous $40k properties that were valued at $350k in 2006.. Holding someone accountable is not tall poppy syndrome. You too can "share freely and encourage others" in this way. Share the love Vince.
vselleck wrote:bek_leigh wrote:Hi VincentI have contacted Michael but unfortunately I haven't heard back from him. I'm extremely interested in purchasing some properties in the USA. I would like to know more about your services but I would also like to do some more of my own research. How do you narrow down your search to select the right cities to invest in?
Bek
Hi Bek
Michael and Bronwyn have just landed in Atlanta, so i am not surprised he has not replied yet. We are filling orders for our investors regularly from our buyers in the US and keeping Michael and Bronwyn very busy placing bids.
We are delivering a quality buyer's agent service for Australian investors with a fixed fee and direct access to all our professionals, contractors and agents for legal, accounting, management, renovations, insurance, and buying. You buy the property and hold title through your own structures. We do not receive any commissions or mark-up from any third parties. We represent you and your interests in the deal from beginning to end.
Our objective is to create a seamless experience for investors to buy foreclosed US properties including tenanting and ongoing support. Most of my buyers are buying multiple properties because they see the incredible benefits of over 20% net return, huge potential capital growth and a high Aussie dollar.
Bek, there are markets within markets in most cities, places where you would do well and other places where the risks outweigh the rewards. The most important factor is getting a significant discount on property prices. I love buying homes for $40,000 that sold for $350,000 in 2006, particularly when i can get $15,600 p.a. in rent. Without the huge discount in price, there is not going to be a significant rental return. We like Atlanta at the moment. There are plenty of newer homes in good ares where we can secure tenants. The West coast is too expensive to get these sort of returns and places like Miami have held value as well. I am avoiding Detroit and other manufacturing based cities as their economies are suffering more than other locations and whole neighborhoods are vacant.
Send me an email at [email protected] and I will forward some more information and a schedule of services we provide. We are dedicated to providing exceptional service and results and making it easy and cost effective to invest in the US.
Many thanks
Vincent Selleck
Licenced Buyers Agent
http://www.888wealthcreation.com
Ph 02 66857 888 mbl 0403 255510Vincent – 888 Wealth Whatever,,,
Do you actually believe the stuff you write in this forum?
Firstly, I don’t think you have ever been to Atlanta and I’d like you to post the title of just one 40k house that sold for $350k in 2006 here with your name on it as owner, That same house will be valued now at $70 -$120k. After repairs of $40k you’ve spent $80k and if the value is at the low end of the range above you have lost money. What it sold for in 2006 means absolutely nothing.
Secondly on your website you talk of Atlanta, a huge city of 5 million people – How wrong can you be. Atlanta is half the size of Adelaide.
I have been sent details of 2 properties in Atlanta from Australian buyers agents recently. One, west of the CBD where I’d never buy by the way, is a few blocks from one of the worst neighbourhoods in the country and the other in Decatur ” a place we just fell in love with” was the quote, but it wasn’t really in Decatur at all and the only reason you would fall in love with that suburb is after driving through the crack suburbs as a comparison.
To all you ‘investors’ and especially those that are time poor, do your due diligence. That means going over there and having a look for yourself. Spend that little extra money and shout yourself a holiday at the same time.
One thing Vince has said that is correct is build a team that you can trust, but do your due diligence on them as well.
As for Miami ‘holding its prices’ …. compared to what, a 25% drop every year for the past 3 and Florida still running at the 3rd highest foreclosure state in the US.
Where do you get this information from Vince?
To Mike and Bronwyn, I take my hat off to you both for getting out there and doing it. Doing what all you armchair investors should be doing yourselves, but are too scared, lazy, busy, or stupid. M & B remember may be ‘now living’ in Atlanta, for how long and on what sort of visa I’d like to know, but they are not locals, they have no history of the place, past or current and are being led around by realtors with their own interests at heart. The same as would happen if you were there. The properties they are locating are based on their due diligence, with their interests at heart, so where does that leave you……. the lazy investor with 20% net returns glazed in your eyes? At the end of the line, that’s where, so if you are comfortable with that then go for it.
Below is an email from the senior lending officer at HSBC in NY. Because they are an international bank with branches in Australia, by the way, they are not as closed as US banks.
They may be a way for you to continue.
Also contact the guys at GlobalProperties.com who arrange for Aussies to buy in Texas through their contacts. They probably would prefer you buy from them though. At the least they may have some info on their website.
PS: Don't tell Jeff I sent you 'cause he doesn't know me
Ian
Subject: Re: Foreign loan
Yes, I can help.
We do Non-Resident loans with 40% Minimum downpayment and 4 credit reference letters (letters from anyone whom you use credit with – i.e. credit card companies, mortgage companies, other loans, etc) stating that you have paid on-time for the last 24 month period.
We would need proof of income (tax returns, year end statements, letter from your Accountant?) and Bank Statements.
You do not need a social security #. THe approval time is about 2-3 weeks from application to approval (that is pre-approval). On a "LIVE LOAN" (property located and you pay your application fees) it's about 30-60 days from application to closing.You can only buy a 2nd home as a Non-Resident, no "Investment properties" – so that would permit you from doing a Multi-Family purchase with us.
Thanks, I hope this helps!
Jeff Ihrig
Senior Mortgage Lending Officer
HSBC Mortgage Corp. (USA)
110 William St., 1st Floor
NY, NY 10038
[email protected]
646-372-5181 (Cell)
212-981-3727 (eFAX)
I am not a distributor and it's Melb only, but send me an email : [email protected]
One other thing, how well do you know Atlanta? Population 540,000. Half the size of Adelaide.
Hey Vincent
You're a funny guy! You contact me on my personal email to enquire as to whether we can possibly work together, then infer I am am an uninformed Mr Smartypants on the forum.
Sorry I hit a nerve with you with regard to your credentials, but I wasn't picking you or your business out specifically, in fact I have never heard of you until your email arrived the other day. I could have pinpointed, Vegas, Miami, Detroit, for similar or different reasons, but I chose Atlanta. Remember this is a chat forum. The topic of this chat is USA Investing – My Opinion Only and you have to realise that first and foremost. I read your thread and good on you for adding more information to the readers of this thread. Now it gives your opinion.
I have been to Atlanta and seen first hand what has happened there, what is available and analysed the pros and cons for me. I have a close friend from Atlanta who is also a propety investor and he ( we) work with another friend who is an agent there, so I believe I have some understanding of that city. I have also seen properties 'spruiked' from Australia in Atlanta and I know the neighbourhoods they are in and personally I didn't feel comfortable getting out of the car when I was driving through those neighbourhoods. The 'white' ( am I allowed to say that) people walking the streets didnt look too friendly either.
Ironically we agree in most part, as in "do your due diligence" and this above all, I believe, was the point I was making. Sorry I used your stomping ground as an example, but what I said about Atlanta is true and no-one can deny that. Also. there are 'buyer agent' businesses ( you mentioned one in Vegas) who have their own interest at heart first and foremost rather than being fully transparent as to the real details of the deal.
.
OKeydokey Oklahoma is the only state in the USA with the no foreigner land laws as far as I know. Hard to pick areas that are on the up. Look at the economy of the state first, look for job growth, look for infrastructure dev. – same as here in Aus. Many of these point to Texas and Austin is doing reasonably well, also San Antonio, Houston to a degree and other areas. Stay clear of El Paso, but the far west corner of Texas down near the Rio Grande was doing exceptionally well up until 2008, not sure now.
One thing to consider is the spin doctoring about the market on the up, but a 20% or in one case 50% rise in value in one little town is not hard when the base is so low. A house valued at $15k is suddenly worth $20k and we have a 33% rise. Means very little. There are a lot of investors in the market right now and the low end of the market has a lot of activity. Go up to the middle and high end and you will see that values are still going down. Also to put a spin on prop value growth and in the same breath happen to mention that foreclosures are 15% up two years after the subprime problem began, should tell you exactly where the market is right now.
Also, It is expected that upward of 1.45 trillion dollars is caught up in the commercial property arena with owners unable to get the rents they need to sustain their loans, nor able to refinance. Late payments on commercial loans increased by 400% last month meaning technically they are in the first stages of foreclosure. The ALt A loans need to be refinanced between 2009 and 2011 so expect another tide of extreme debt to be announced by the banks. They know this is coming and they have no way of stopping it.
What effect will this have on a) the federal govs ability to sustain their stimulus packages b) the amount of money already in the system, c) the ability of the banks to survive what could be worse than the residential subprime fiasco, d) the availability of what little credit there is left, e) the length of time the residential market will require to turn around, f) your investment and whether it will retain its value at all.
Because it is hard to answer these questions exactly right without looking into a crystal ball, it's best to er on the side of caution and make sure whatever you invest in does not involve retail or business of any kind, has a strong or multiple cash flow component, is purchased at a deep discount and is in a state that has some prospects.
To end , here are some Americanisms that may or may not help you understand the gobbledegook of finance and property in that neck of the woods.
Monetary Medicine – govt financial assitance.
Greenback Emissions – overload of govt spending
Underwater – negative equity in your property
Also – upside down – owe more money than have in equity
Burnouts – property that is bringing down the neighbourhood
Cash For Trash – property with owner inflated/unrealistic prices that make a viable exit strategy difficult
Hi Tuli34
From the latest figures out on the US property market Cleveland is actually making a comeback after being one of the first to hit the bottom. I have seen some great multifamily deals in Cleveland but know little of the city.
Useful tool, among many is http://www.housingpredictor.com
In answer to a couple of questions…
FHA stands for Federal Housing Administration and if you google FHA Waiver there is plenty to read about it.
Oklahoma because it wasnt hit as hard by the economic downturn and I bought off landlord owners who just wanted an out, not banks. There is a law that states foreigners cannot own property in OK for longer than 7 years so I wouldnt advise investing there if you are a buy and hold investor.. As I am not holding these properties it worked fine for me.
Have a look at the website above to start with and read up about each state, the trends and each city. That may give you a starting point if you are confused.
There are also some people selling USA properties in Australia to ill-informed local investors. I just advise each of you to do your homework on these operations as some of the people involved have never set foot out of Australia, yet are giving a lot of advice about cities and suburbs in America they know little about. What they are doing is emphasising the gross return to get you excited. Don't be fooled by the high returns only, as these can be depleted very quickly once all outgoings and possible social/tenant issues come to light. Investing in buy and hold property in Atlanta is one that comes to mind.
Atlanta has a 60% black population which is high. On it's own it means nothing, but mixed with education, unemployment and economic status, you get a different picture. The city has been hit extremely hard by the housing problem. Unemployment is high and there are thousands of houses going cheaply. The 'good' suburbs are few and far between and you can bet your last dollar, that the many of the houses going for $10-$50k are not in these suburbs or they are in what is referred to as the 'cookiecutter' developments. These are small subdivisions of usually one street cut into a section of forested area with up to 100 houses, all the same. In some of these streets over 50% are in repossession. Have a look at any American city on google maps and you can see these new subdivisions on the edges of the city ( Try Atlanta and you will see what I am talking about). Zoom in so you can see the street name, then type a number and the street name in the search bar and see if you can get a street view and have a look for yourself.
This little rant is not to put you off at all because there are great deals around. What I am inferring to is to do your due diligence x 200% and ensure you know what and where you are investing in. The good ones often go so fast that down here in Australia we wouldn't even know they existed.
Hi Vicki
Yes I am going over and if in HB i will contact you for sure. I've also found property returning over 7% but didn't want to list everything here, just the fact that there is opportunity when you look. I did think a fully renovated set of 3 units pulling $800pw was an OK buy and hold though, considering the growth of that little suburb by the beach, if that is the type of investment you specialise in.
To Wanlad – yes going over again and can I ask what you meant specifically about researching the infrastructure. It's a pretty broad subject.
For finance, what I have found out is the major banks are asking 30% deposit and will loan to Aussies based on serviceability ( as in Aust. – income, assetts, liabilities etc). They do not take into account Aust property portfolios and loan only on the NZ asset. Non-institutional lenders have better LVR terms so shop around.
To make matters even easier, I would open a NZ bank account as soon as I land (and probably a good idea to visit the place before you buy, so the suggestion there is a matter of course). Banks like to know you have 'roots" locally in the financial sphere and it also makes clarification of your identity 100 times easier from Aust as you have done it already in NZ.
The only resource to use for investors in NZ just became available. It costs a bit ($70pm Aus) but is the one stop shop for property evaluation. Google IAdvise NZ
Anyone found the property billboard website useful?
Singer why would you buy a rent controlled property? ( And Wikipedia is not the best resource). There are thousands upon thousands of alternative properties where you control what rent you charge.
Just bought property in NZ – there are some great deals there now contrary to what people may be telling you. The NZ economy hasnt been hit as hard as it normally does during downturns and some areas are showing growth equal to many in Australia. Most importantly there are some seriously motivated sellers.
Am about to buy again and have a $80k profit deal on the table if you are interested.
Ian
Hi Rob,
Have a look at http://www.globalpropertydeals.com
I have met the guys personally and they are investing near Dallas, San Antonio and Houston and have been for the past 4 years or so,(before the housing problem). They have invaluable local knowledge that you are after.
Hope it helps
Regards
IanHi Jason,
Congrats. You've certainly created an great niche with local knowledge and your website is excellent. With regard to multi family, you are correct in that the they do require greater management, same as in Australia or anywhere for that matter, but there are many upsides a single dwelling does not offer. Both sides are of equal value really, it's just a matter of what strategy one wants to take.
I was talking to a Detroit local last week who gave me an amazing insight into the city I hadn't realised before and I now know why some locals are doing extremely well there investment wise. Same applies for Cleveland too. Really it is a matter of Aus. investors choosing an area and visiting it. If that is with the aid of an Australian living there, even better for them.
I am in NYC and have purchased 4 houses in Oklahoma City. I am scouting for NYC property as well for Aussie investors who have contacted me via this thread. Just found a 3plex apt in Prospect Park Brooklyn in foreclosure asking $295k. The comps for the street and immediate vacinity are $850k and more, so if that is not enough incentive to act I don't know what is. More expensive apartments in Manhattan are selling for $200-$400,000 less then last year as well.
My understanding of Tax Liens by the way for anyone reading and interested is basically buying the tax owed on a property but not owning it. This can be done via auction and usually for less than is actually owed. Depending on the US state you can then charge 18%pa on that debt for the owner to pay the tax owed and reclaim their property. If they don't in a minimum of 2 years and up to 7 years, then you can apply for the City Office to sell the property usually via auction to get your money from the sale proceeds, plus of course the 18%.
Hope this helps someone.
Ian
Just my opinion re Detroit. I know of investors doing well there and a couple who are flipping houses making $20k+ profit per month but they are from Detroit and know the neighbourhoods well. Detroit has unusually high unemployment, many suburbs that would be difficult to maintain rentals in, a declining population and high crime rate so there are better cities to invest in, in my opinion.
That being said, property is dirt cheap there. I saw a nice 2 storey house in a good street at a mortgagee auction with a starting bid of $500 and taxes owed for $6k. Previous value in 2006 was $240k. No-one in the country placed a bid. Not even a local. Odd isnt it?
An area of investment I would consider there is the inner city fringe, where larger commercial buildings can be renovated for alternative uses, either warehouse apts, gallery spaces, etc. Depends how much money and time you have and what your ultimate goal is.
Best to visit the US and have a look for yourself. Don't rely solely on what people tell you, me included.
As far as multi family property goes, Detroit has many selling for peanuts, literally. $25k for a 12 unit building for example. I can't recommend buying them just because I wouldn't buy one myself.
