Forum Replies Created
Hi Stu,
Welcome aboard. Yes as Alex states….the LLC can own multiple properties. If however you purchase in another state other then where you originally set up the LLC…you will need to register to do business in the other state as well. You will need to do lots of research as suburbs or even the same street can go from "good to hood" real quick. Nothing better then jumping on a plane to back up your research and see it first hand. As far as the markets you mentioned….read through the forums and you will see the people experienced in the markets you mentioned.
An LLC is a flow through entity so once all income and expenses are taken into account…the bottom line comes through to you. You should get specific advice about your situation Stu. Any tax you do pay in the US is taken into account and treated as a foreign tax credit on your Aussie returns. I can recommend James Simango from USTaxCentral. (www.ustaxcentral.com)
Finally…..don't pay any companies any joining fee's for property lists or membership fee'slol….that's why insurance companies exist isn't it…..to find as many claims as possible NOT to pay !!
Thanks for the feedback Alex…..I can't comment at this stage cause I have never had to make a claim. It cost me nothing this last year but is coming up to renewal time so was thinking is it worth it since I would have to pay the next years premium myself. You watch…if I decide not to renew it….. the month after the dishwasher will give up life and I'll have to replace it !!
In your opinion I gather you feel they are all tainted with the same no pay attitude….seems like quite a few exist so was wondering if your experience was limited to just one company in particular or a few.
usainvestor wrote:worldinvestor wrote:Hi Speedy
I stand by my statement regarding US market – its basket case and I would personally would not rely on appaisals etc . Personally the only way of knowing whether you have purchased at real/market value is to work out how much it costs to build per sq ft and how much you actually paid per sq ft.
I agree, zillow, trulia etc are only tools as I mentioned in another post, far from perfect, however it does provide useful information ie county rates, rental returns, I guess similar to realestate.com which I use all the time when searching Oz properties as I am sure most do.
WI
I have previously outlined my DD process re zillow et-all and 'trust' them more with a good measure of DD than any BPO that could be biased and you would never know how that biases skews that valuation.
Speedy you have previously rubbished zillow as it didn't correlate the right value to your property but that might just be because you overpaid for the property.
usainvestor,
I haven't rubbished zillow or mentioned anything about the correllation of zillow values to the properties that I own. I have simply always implied from the beginning that buyers shouldn't base their entire decision on values listed in zillow, trulia etc etc and it should only be a part of the DD. I am more then happy I have paid below market value. Part of that based on the appraisal…part of that based on a list of comparable's that an agent friend of mine got for me that were normal free market sales….not foreclosures or short sales that I went and looked at and part based on what the construction cost per sq ft to replace the properties would be.
Jay,
Spot on….it's a small commercial bank and it's NOT their reo inventory they are financing. I can't see it being any more independent from the sale of the property personally.
worldinvestor wrote:I would say another major lure to Texas is the fact that foreign investors can source finance at an attractive rate.
What I think is incredibly scarey about this one is that the investor receives a "bank valuation" and assumes this must be spot on, how could you possibly take this seriously in this current market of foreclosures, short sales, foreigners paying over the top prices.
Zillow may not be perfect and I am told it generally overstates the sale price, but alarm bells must be ringing if you are paying $50K over the zestimate. Build cost today and how much you pay per sq ft is one way of keeping the figures real.
Also, what about the investors purchasing in Texas actually taking over a mortgage, I really don't get that one, common sense would tell you that you are paying too much for the property in the first instance.
WI
WI,
You seem to make the assumption that everybody and anybody can get finance anywhere in Texas based on the above statement. Believe me finance for foreign nationals is not an easy thing to achieve ANYWHERE in the USA and you will find that it is available only in small pockets. My lender for example is only interested in North Dallas because that is the area they operate in and are familiar with. If I presented a property in Houston to them they are not interested…..(I have asked).
The investor doesn't receive a "bank" valuation as you incorrectly assume. You need to do some research on the valuation processes and what acts of law they need to follow in the USA before you make ignorant comments based on no foundation. Banks appoint companies to order appraisals on their behalf…they are not "bank valuations"…they are done by independent appraisal companies and a professional appraiser really wouldn't find it too hard to separate normal market sales from foreclosure sales…they do speak to people as part of the process you realise….people like real estate agents !!A very good friend of mine has been buying property in Atlanta…he got hard money finance at 50% down and is paying 11%. The hard money lender did an appraisal and that backed up what he had paid…he got a 22 page report which shows the comparable sales. So are you saying all appraisals are flawed no matter what city your in ??
And Zillow….really….your comparing a free online appraisal process to a proper recognised valuation. Zillow and Trulia can be miles apart with figures so which one should I base it on.
jayhinrichs wrote:So thats how I rationalize it. Last thing on Texas the property tax's can just be monster big.. ONe needs to be very careful before they settle on a house there and get with the tax collector and see where your property tax's will be once the house goes out of Homestead or owner occuppied status to rental status.
Jay….I agree that taxes is something you need to look out for when you invest in Texas….I have invested in 3 so far and rejected quite a few because of the higher taxes for particular properties…..comes down to doing your homework. The Homestead exemption in Texas by the way isn't that big a deal and doesn't make that big a difference…..it's gives you $15,000-00 exemption on the assessed value for SCHOOL taxes only. Unless your over 65 or disabled then the homestead exemption is all that applies.
I guess everybody has their own investment "models" and property is not a one size fit's all approach. I am a bit younger and have time on my side….to me the power of leverage available to me from a US lender at rates below 6% ….it will see me own the property outright in less then 15 years. Once I collect rent…allow vacancy….taxes, insurance, maintenance, loan payments etc….I don't have to contribute a cent and will own it for my $40,000 down payment. This combined with the Texas story of jobs, and population growth just made me feel more comfortable when making my investments.
staceymac wrote:PS. I think I have met you at a property seminar last year Nigel? Are you still using Brian in Texas.(this is who I am meeting whilst I am there – be interested in your thoughts) Tried to send a PM but cant send it because I think I am new on here.staceymac
Are you talking Brian Payton from ATW Investments ?? Would be wise of you to send me a PM if it is.
jayhinrichs wrote:Astute comments.I never look at Zillow, I might have been on that sight once in my life…. Zillow is all over the map, It can show properties far too low in value then properteis that are far too high in value given local sales. The only way to value propert is through a BPO and get 2 of those.. And or a for fee appraiser which is what we do , apprasier is your best bet for true value. Now this does not hold true in Atalanta were you have auctions short sales and all manner of sales far below last solds.
The Atlanta market you must have to use replacement value and common sense. I f you snag a 2000k ft nice home for 60k thats 30k a foot to build , one cannot build in the us for less than 60k plus permits. 'so as long as your not in the hood, there is going to be significant upside for these homes over the next 5 years.
Jbelmore,,,,, At the end of the day its going to be who we are what we can do for you our proof of our capacity and experince to execute on your behalf that will carry the day and you will make a comfortable decision to give one of our investmetns a shot.
We are not asking for 100% of someone funds and infact would never take themIf you have a 200k portfolio we would recommend1 of our notes 2 max then go for high growth stocks.
Jay,
I think it’s about time that we had a discussion about Zillow, Trulia, Redfin etc….all computer generated modelling estimates. Yes you can pick a few useful bits of information from them but by no means is the valuation accurate…..I have always found to be way off the mark. From what I have read and seen first hand….many Aussies are treating these sorts of sites as the bible of property values
For example….I am just about to close on a property north of Dallas. Aside from the issue that Zillow etc doesn’t work in non disclosure states like Texas and 9 other states I think….the figures are way off the mark and in NO WAY should a buyer base their decisions on value based upon the modelled estimates. On the property I am buying…Zillow has a estimate of $83,000-00. The bank just gave me a copy of the appraisal they had done for my loan and backed up a market value based on comparable sales of $147,000-00.
This has been my experience so would like some feedback from you Jay on what those in the US think of these sites.
Alex SC wrote:Guys please there are good teams in the USA and other places. I have spoke with a few Aussie resellers of USA properties but before I do any thing .I am going to take the time to get on a plane fly over and meet each of them.IF you are looking at any one from the USA do the same take the time…
Speedy yes good advice but also common sense…..
Please if any one is getting started and wants a quick list of 1- 5 must things to do for starting out or even advanced guys
send me email
Alex,
With all due respect…this particular topic was started about a specific company and the person behind it and why potential buyers should stay clear of them and those that operate exactly like him/them. Most on this forum are aware that some good teams based in the US exist and that's why this forum exists…to seek them out. If the points given were so commonsense….the topic wouldn't have begun right ??
As far as the Australian based "buyers agents" (& I use this particular term loosely)………your posts to date have given helpful advice to us Aussies because you have the benefit of being in the US & with experience to back you up. For some advice to you & from this side of the pond and my years of experience…….before you jump on a plane to come and meet these marketing organisations you need to do your due diligence. I could easily list a dozen or so companies that sell US real estate to unsuspecting Aussies but I won't because the forum moderator would remove them all. They all sell the same overpriced crap in bad areas that nobody else would buy in their right mind. They all promise the earth and have all the answers and have "people on the ground" in the US….fact is when is comes down to it they have no control or influence over them. It may or may not surprise you that some of the ones involved in selling US properties have never even been to the US. Even worse….a lot of them don't own any US real estate so how can they profess to be the experts ??Noeliboy wrote:Yes – Real Estate. I have some documents that I need read.Noeliboy
Okay Noeliboy,
The next question then….are they issued from any particular state in the USA ? All depends on what sort of document you are wanting advice on but I would have thought for example if it were a real estate contract issued in South Carolina I would have thought you would want a lawyer from that state. I have a couple of attorneys that I have used…one I can strongly recommend but he is based in Houston TX. If that is of any assistance then please PM me and I will pass on the details.
Noeliboy wrote:Hello to all,Can anyone assist in recommending a US trained real estate lawyer/firm that lives either in Melbourne or elsewhere that someone has had dealings with.
Regards
Noeliboy
Hi Noeliboy,
Are you sure your looking for a US trained real estate lawyer ?? Commonly referred to as an Attorney…..these guys don't often have a lot to do with real estate transactions….done in most states by Title Companies…..and I have doubts anybody would exist in Australia for that. Is it perhaps an Accountant your looking for ? If it's an Accountant…there are many that are up to speed with US & Australian tax matters
First of all Richard…..I am sorry to read about your situation. I hate to say it but there will be more bad stories coming out in the future. Before throwing good money after bad….
1. Find out of you even own these properties or if they even exist any are any liens against them.
2. If you do in fact have title to the places (not thinking likely)….chances are they are deserted…probably with city liens for cleaning etc….ascertain the value of any liens against them.
3. Find a local realtor who can give you some idea of the present valueYou need to do all of this before you even think about jumping on a plane…the "investment" may be beyond salvaging. Would you be kind enough to keep us updated on the outcome ?
If it's all bad news and you don't even own them……if it were me I would be getting documents together and going to the Australian Federal Police. This is outright fraud and he would be lower then roadkill in my opinion.
For others reading this forum….some things to take from this experience…
1. Transferring money into the CEO's bank account ??????? If this were a ligitimate property deal……why would there be a need to transfer funds into his personal bank account ? A Title Company would be involved and you would transfer the funds to them for closing.
2. I don't care if the investment is $25,000-00 or less your making…..get on a freakin plane folks and see where your money is going. If you can't afford the airfares or the time off work…….don't bother trying to think of it as an investment…your kidding yourself. Save yourself the bother and put it all on Race 7 horse number 3…..Just as good an outcome guaranteed.
3. Never hand over funds for "proposed refurbishments" Your just inviting people to rip you off.
4. Read points 1, 2 & 3 again
Hi Rob,
I have invested in a couple of properties in DFW…more so Dallas then Fort Worth. I have been over to DFW 3 times this year and another planned in January. I agree with why you would want to invest there…..as you can see…you will get different opinions but that's pretty well much anywhere you invest either here in Australia or the USA. Both of my IP's have been homes and I am pleased so far. My strategy is that I will own them outright in 15 years or less and then collect the rent so it's not a model that it built on appreciation.
Send me a PM and I can tell you some more.Hi QM,
I grew up and live close by to these area's so feel that I know them pretty well. Certainly new estates have sprung up over the years but the reality is they are just small coastal villages and really lack any critical infrastructure. Basically the area has no reliable public transport, quite a distance from major shopping centre's or employment drivers. Presently plenty of properties on the market. Both places did fare quite well a few years back when a major road bypass was being built and the workers rented most available properties at good rental rates but that dipped back again once the project was complete. The closest police station is at Kingscliff and Pottsville suffers from some crime from unemployed youth.
Nice place to holiday but I would keep my investment dollars away. If you really like the Tweed Shire area then further inland is a town called Murwillumbah…..this has much better prospects you should research more.biggaz13 wrote:Hi Money for Jam"My USA Property" changed their name to "US Property Sales Australia" about 6 months ago. All the staff and processes slid across under the new banner. I think you will find the name of "My USA Property" is dissappearing, not the company.
Ironically, I bought my first US property through "My USA Property" and it was actually a positive experience.
The 2nd property was through their new name "US Property Sales Australia" which was a horrible experience.
cheers
Biggaz,
Actually…what happened is that MyUSAProperty split up….most likely due to bad publicity involving who he granted a license to in Australia to operate under that name/banner.
Andrew Allen started up US Buyers Agent based now out of Florida. He seems to have gone very quite since this move
Trent Richards & his father Tony Richards set up US Property Sales Australia. Interesting on their website they show pictures of an office at Mermaid Beach that has now closed down (was once MyUSAProperty and then a new coat of paint they became US Property Sales Australia). Now operating out of a serviced office address. Suggest anybody Google "Trent Richards" to get his history.
Rosa Tong wrote:the only problem with set and forget investing….is that you really can forget… Liquidating my shares now so that will help with the saving a little. JOY!!!!! when they get sold…. i can then buy….. and set and forget my usa house…. joy!!!!!!Rosa,
I have watched your posts for quite a while now since you joined the forum and I know you have been saving your hard earned dollars to get some funds together to buy in the USA which is great and your to be commended for your commitment.
I do feel compelled to make a comment about your "set and forget USA house". Direct property investment never has and never will be a set & forget investment. It is unrealistic to think that you won't have vacancy and maintenance issues that will require your direct involvement. Expect the tenants to be pretty hard on the property so depending upon the quality of the refurb….these items could need to be attended to within 12 months. Do you have the cashflow available if your Property Manager comes to you and tells you it will cost $2000 to bring the property back to a condition to re-lease to tenants ?
Then throw into the equation the fact that the property in is another country and another time zone and communication will involve late night and early morning phone calls (yes I know email exists but somethings have to be handled by direct calls). These are all things that a turn-key company you buy from won't tell you about. Funny they only mention the 15-20%+ returns and the upside. Never mentioned is the fact that expenses will come along that will blow their predicted return out of the water to a sub 5% and I would hate to see someone scrambling for the credit card for big expenses they never thought of or considered into the financials.All part of the fun of owning rental property but I just don't want you to go into direct property investment in any country (Australia included) without being fully aware of all the risks and implications. There is no trial period…once your in…your in for the long haul or your going to lose your dough. If you want a "set & forget" investment…then direct property investment isn't for you. Just how "involved" you need to be depends entirely upon the home itself, the quality of the refurb, it's location and how good your property manager is.
Engelo,
This sounds similar to a product that a forum member Jay Heinrichs from True Wholesale Houses does. Slight difference is that with Jay's product…the rate is 7% to 9% on your investment paid monthly. The big difference however is that with TWH…you also participate in the equity of the home and have a note over the home. If TWH went broke or didn't pay your your monthly return…you still have a home that you foreclose on and get your original investment back. If all goes according to plan however and in 3 or 5 years time the home is sold not only have you gotten your 7-9% each month…you also stand to gain from the sale as you have a 50% stake in it.
Hi Deputy,
Welcome to countless hours of research & due diligence !! Out of the millions of foreclosed homes on offer in the USA….how did you narrow it down to Jacksonville FL ??? Family connections etc ??
Steevg & Lynne,
I was fortunate enough to first of all work in the real estate/finance/marketing industry in Phoenix AZ 10 years ago so had some background knowledge to begin with. Then I was able to take 18 months off and do research on the ground in the US and many hours on Skype and google before committing to the first purchase.
It does look like a minefield with so many issues but of you can sort through them it can be worthwhile. You can even get that elusive foreign national financing if you know where to look and simply build the right contacts !!
Biggest hint…..just because someone say's it's so….doesn't mean that it's true !!
