Biggaz

Here is the history of investing in Buffalo:-

In 2005 Steve and Dave Bradley bought 33 cash flow positive properties in Buffalo. A bunch of us, from these forums followed their lead and bought property there through bird dogs who set up all the initial contacts on the ground there. The returns were 20% a figure at the time I thought was too good to be true. When Steve and Dave went their separate ways, Dave kept the Buffalo portfolio.

Getting finance was incredibly difficult but eventually we managed it. It cost an arm and a leg with a fixed rate of 9%.

Buffalo has severe winters and so roofs can be a problem. The roofs we were told had 10 to 15 years left in them started to crumble pretty quickly.

The property management issues were there from the start. It was very difficult dealing with issues in the middle of the night our time. The tennants would often stop paying rent, have to be evicted and then they would trash the places when they eventually left. Usually the damage was between $3k-$7k. So the margins dropped through the floor. We had drug dealers as tennants and the police smashed in the doors to get them. The property was closed off for a time then we had to apply through the courts to gain access again.

These are the sorts of issues you deal with when buying into a low socio-economic area. That is what worries me about some of Steve's recent US deals. They appear to be in some dodgy areas in Florida where I would think the same tenancy issues may occur. It only takes one bad Tennant to destroy the margin for the year.

Nigel would know the good areas to invest in as he has been around long enough to get a very good feel for them, but I would not go anywhere near America for investing unless I was close enough to get over there and deal with the issues first hand. I never knew what was actually happening with repairs. The bills just kept coming.

I don't want to want. It just does not sit comfortably with me. But I know a lot of Aussies have done, so I wanted to know what their experiences were. The Americans are quite candid in their advice. "Don't waste another cent…"

Hope this gives you some background.

Cheers

Yes, money is owed. There are definitely buyers looking to buy up cheap and then rehab them.

Sounds like it is possible. Just not sure how to go about it.

Cheers
Thejajco