Hey Biggaz

To an extent I agree, if you were chasing a growth strategy then I suggest TX
has the basics in place to a achieve that but they still have properties that achieve
good positive cashflow as well which is my reason to be here. This week I have been looking
at properties around $50k-$90k. After all costs and loan repayments are take into
account (and I am doing my numbers on only getting 50% financed here) I am left with
an average of $500 a week. Sure I could spend less and get some cheapies and aim
for Section 8 tenants but that’s not a market that personally interests me. I did that option
7 years ago in Phoenix and nothing but trouble and higher maintenance due to Sect 8
standards that need to be maintained to keep qualified

Hey just be aware that TX is a non disclosure state so sites like Zillow & Trulia do not work as well as other states
Zillow actually states this if you dig into their sites. I am actually in Dallas right now and getting a couple of deals
done this week

Russ,

Nothing beats being able to leverage in the US and yes the finance I have lined up is through a local Dallas lender. The property prices I am looking at range from $50K to $90K & Yes I also made the trip over in October as well…..mostly because I wanted to see for myself first hand and meet the people I would deal with face to face…gave me a lot of confidence.
Just so I don't confuse the issue….you don't have to go to the US of course…it could have all been done by distance and I would have gotten the same outcome and to be honest….this is most likely how I will invest in the future now that I have made the contacts and built a high level of trust with them.
Happy to pass on the details to you if you PM me…don't think I am allowed to plug them or give them free advertising on this site but also reiterate…in both cases the lenders would allow me to borrow purely because of the reputation and who I purchased through….I couldn't just buy using any agent or company and expect to get finance approved…..still seems to be a case of who you know while finance is so tight over there

Just sent the email with contact details now James

Hey Russ,

a) You can raise cash through the equity in your own home here in Australia and effectively then become a cash buyer in the US. An Australian bank is not able to lend you funds using a US property as security
OR
b) raise cash through the equity in your own home here in Australia to use as a deposit and get the rest of the funding from a US source.

Issues…

• most people on the forum will tell you the difficulty in getting finance from US banks/lenders due to the lack of funding available.
• only a few banks operate nationally in the USA (Eg Bank of America, Citibank etc) and none of these have lending programmes that allow lending to a foreign national (which is what you are called) since the GFC.
• need to use lenders that will lend in your state of purchase or in the geographical area you invest in
• issues involved getting funding for homes in foreclosure. Homes need to be liveable condition at the time of approval with no maintenance issues or structural issues allowed.
• can use what are called "hard money lenders" but rates tend to be quite high (above 12%) and for short loan terms which can effect projected cashflow and as the name suggests…these people don't muck around.

I purchased a home last October and fortunately it was relatively easy for me to get funding for 70% of the price paid. Loan in the name of my LLC over a 20 year term. I am heading to DFW this weekend to purchase some more homes and have finance pre-arranged for at least 50%….hoping to get this up to at least 65% and will be over a 30 year term. Very few have been able to achieve this and NO….I have not used a buyers agent in Australia

Hey Portpirate,

In my opinion….if they are so uncontactable now…..imagine what it's going to be like after the purchase (if you get there). Reading the posts….seems to be a common denominator with them.
Why are you so keen to buy from them specifically ? Is is the fact they are Aussies so you feel you can trust them or is it that they are providing a one stop shop ?

Younginvestor,

I used to work in real estate/finance/marketing in Phoenix from 2001-2005 so I saw first had the boom beginning to take place….crazy times. I  am an active investor in US real estate and am heading to DFW in 2 weeks time to purchase another property.
Personally I would stay clear of Phoenix for quite some time yet….I have many many contacts & friends and it would be really easy for me to purchase there but I won't be for some time. House prices have dropped by 42.5% in the last 5 years and dropped 13.4% in the last year with more to come.
I cannot comment on the operators but you have large vacancies in Phoenix with a large inventory of stock available and plenty more to come yet.
What on earth lead you to head to Phoenix…..must have had a convincing arguement !!

Hi RickH & Biggaz,

Congratulations to the both you on your purchases. Rick…I had been following you from the beginning….determination on your part got you there in the end.
I can appreciate that most people don't have the time, the resources or the ability to invest in US property themselves so there is a reason why most will go to the Aussie "buyers agents". Rick…again I know you had done huge amounts of research yourself on Kansas City. Biggaz..you commented that you invested in Cleveland OH but still have reservations ?? Do you mind of I ask why you invested there anyway….even with the reservations. Was it because this was the city that MyUSAProperty recommended the most ?
I made my first purchase in October last year and all is working out well for me to. I invested in an area north of Dallas TX. This was all done without a buyers agent. I'm not opposed to the concept….it's just that I was going there anyway so had no need to involve one. I had researched for 12 months solid myself so had the basics down. I was able to secure a property…get finance…get a great property manager…referred to an attorney & CPA….insurance, appraisals, title companies etc etc. I'm flying to DFW again in 3 weeks to secure my second property. A good friend of mine who lives in the US has just done the Robert Kiyosaki Rich Dad course and part of it was investing in single family homes. He was then introduced to a property company in Dallas where he purchased 3 homes. 4 months down the track he told me about them. I contacted them and loved what I heard.  They have dealt with lots of Australian buyers so are familiar with our tax laws (including SMSF's). The statistics about Dallas are staggering and will amaze you. The prices have appreciated in the last 12 months and it's population is growing at a huge rate. I am looking at a place for $85,000-00. It has been refurbed extensively and it rented for $1100 a month. I will get finance from a local private bank for minimum 50% (but likely 65%) LVR so after taxes, insurances, loan repayments etc I am left with $600 a month net (@50% LVR). 15 minutes to downtown Dallas. Property Management is provided and all done on a web portal. Again I pay no buyers agents fee's as I am dealing direct with the wholesaler. If anybody is interested I might post details each day that I am in DFW as I am spending a week there looking at the options available
Biggaz….one thing I suggest you do is look into seriously is then impact of owning the property in your name. You are automatically classed as a foreign owner at present and this will have big impacts on things like withholding tax (look up FIRPTA), US estate and gift taxes and eventually when you sell it.

Hi Bigaz13,

Litigation is one aspect of why it helps having the property in the name of the LLC. A second reason which nobody has mentioned in this forum is the impact of FIRPTA (Foreign Investment In Real Property Tax Act) Withholding Tax. This applies not only to the sale of the property but also to the rental income you receive as a foreign investor. If you purchase in your individual name you will be classed as a foreign investor and your Property Manager then becomes the withholding agent for the IRS and withholds 30% of your gross rent each month. This is then forwarded and reported to the IRS by March each year.
Once you lodge a tax return as the individual the tax withheld will marry up with your tax return and adjustments will then be made. You can then elect to have tax deducted as if you were carrying on a business in the US (rate then reduced to zero) and you then pay tax to the IRS net of all expenses. If your property manager doesn't know anything about it I suggest that they make themselves familiar with it as the IRS law considers them to be the withholding agent and will actively pursue the property manager for the tax they should have collected plus penalties. It's becoming one of the most common civil actions taken by the IRS

If you purchased in the name of a LLC, it is considered a US corporation and the property manager would not deduct the 30%. Note that the LLC may also be liable for withholding 30% of the dividends it pay's to you but you will need to speak to a CPA for more details on how this can be minimised.

An LLC also gives you some benefits with regards to estate and gift taxes being treated as a US corporation as opposed to owning it personally as a foreign investor

Just an opinion formed and confirmed by a reliable source. I also have a link to the IRS website which explains this if you need it

Hi Leo,

If you are Australian and meet a few requirements (no criminal record etc) you can travel to the US on a Visa Waiver programme that entitles you to stay in the US for up to 90 days at a time. Don't forget that you need to do register with the Dept of Homeland at least 72 hours prior to departing and get travel authorisation…costs about $14 I think.