Forum Replies Created
@ JLH: Fascinating read! And I like your business model! Less risk and more suitable for the hands-off investor..
Interesting article from Wall Street Journal declaring the US housing bust over
http://online.wsj.com/article/SB10001424052702303644004577520414196790098.html
NICE……….!!!!!!!!!!!!!!
Alex SC wrote:Alex SC wrote:So much talk about how USA or Australian real estate groups are marking up the properties that we buy. So I can't speak for others, but I will speak for my company on how and why we do what we do. This is an example below:
I am going to list a property and what we purchased it for. This is without plans and exit strategies on this property.
I want everyone to realize what goes into buying, selling , marketing , and rehabbing the property.What a lot of people are missing is everything that comes along with buying a property. If I were to buy and sell myself, sure the price comes down.We have aligned with partners in different countries, which opens the doors for for us to enter different markets. Those wholesalers need to be paid. One group without mentioning names both the owner and VP of operations have come here to visit us. That says a lot about an international team. Our future partner from Singapore will be in town next week 11th- 18th to workout partnership plans.
A lot of people are leaving out the cost of doing business for us as an investment company and a wholesale company. For example, I am set to fly to London and then possibly Perth and Adelaide in one trip. Again, for a company these things cost money to do, along with having a staff and keeping the lights on. For a larger investment team, there are costs associated with them being able top buy and sell multiple properties. We make our money by turning volume not just from one of our deals.
Here is the property that we are about to send out to our cash lenders in the USA and International clients. We just got the contract accepted to purchase for $32,100. Now for me closing cost and rehab is going to be roughly 10k .Then we over borrow about $2k for what I call operations cost. This house will rent for $750 to $800.
http://carolinaliquidator.vflyer.com/home/flyer/home/131965000
Now the part that most are not seeing is that this property can, firstly, be sold through our direct marketing program through existing clients. So very little cost to me, as I only owe my cash lender points ( % ) for days I borrow funds.
If it does not sell, then it is time for me to contact my international and national wholesalers. They also need to get paid since they are providing a service, as well as taking the time to build a business relationship with my company.
So now the purchase price would be about $59k . This covers my cost of paying my cash lender, paying a wholesaler if they sold the property, and paying myself.
I just want people to see all that is involved with a real estate deal. Yes, we do charge for our services and we do have partners who also charge for their services. I hope this shows how and why when a deal is purchased for $32,100, why the property is being sold for $59k. We are working with a few financing options with a few different sources for the international clients. I have not physically seen any of these properties close through international financing, so that is why this is based on a cash deal only. With international financing in place, this would also help the purchase price.
Hope this helps
SincerelyAlex
skype Alex Franks 2002 Location Charlotte NC USAAlex [email protected]
Look forward to feed back !
Again I am wanting to walk every one through the deal.
On Monday or Tues I will provide a video of the property.Showing the repairs that will be needed , and a complete walk through of this property.So every one can see what I am seeing. ( Just FYI Jay Hinrichs showed me some techniques to improve my rehab and working on the budgets of these jobs). This property is now closing Friday .Our California Lender ( Jay you know her Jenny K ) is doing this loan. Now at the same time we are borrowing $45k. So one can see exactly how the money was used. Now we already have a contract to sell this property from our LA client. Which I will also include a copy if some one wants to see a closing statement.
$55k is the purchase price and they are getting 20 % down loan (USA financing only )So now lets look at the total loan $45k paying 6 points on the funds. Interest to our cash lender $2700. $2k to our wholesaler. So we are at $49k after closing Roughly $5k profit. Skinny deal but quick.
Again doing the right thing can go far in this business. Not a killing but doing multiple deals like this can turn a tidy profit. Did have sales price for $59k. ( power of negotiation got me down to $55k )
Thanks all for either posting or responding on this thread.
Sincerely
Alex
Sorry my typing and grammar , skills are not up to Jay , Lawsjs and Emma LOL
Great post Alex thank you, did you ever do the youtube video etc?
Emma what type of work do you do in the worst zips on all nighters? Or do you mean when you’re in the country you return to your place of work / temporary residence after all nighters? Either way it sounds like excitement..
“And not sure how it is in OZ IE are hand guns legal or not… But you just never know when some gang banger is packing a 9mm and is going to pop a cap into you…which usually leads to death.” …Nope JLH, we don’t know how to deal with that, much like a bilby whose evolution failed to equip it with the knowledge of how to deal with being torn up by a cat
.Apparently only about 5.2% of Australian adults (765,000 people!) own and use firearms for purposes such as hunting, controlling feral animals, collecting, and target shooting http://en.wikipedia.org/wiki/Gun_politics_in_Australia
I’m quite amazed how competent most Americans seem to deal with this issue, like the little older Ecuadorian – American lady who owns the local corner store where we live, she is well armed and has no fear..
Nathan86 wrote:@pat007 – You can get an idea off http://city-data.com http://www.city-data.com/forum/ and if you post you are looking to move or looking for a place in the area, they will be able to give you an idea… Remember though, they are peoples opinions but it will give you a good idea@jayhinrichs The thoughts of a narrow-minded investor – people still have to live in the “ruff” areas, IE, if you were investing in Brisbane and you bought a couple cheap houses in Woodridge & Inala “ruff” people still live there, and pay rent and has the population to support a rental house, if you buy in the “satillite cities” and rentals get cheaper in the major cities then they will flock closer to work… you potentially lose more rental potential as say in the big cities. You can also buy cash flow positive properties and STILL get the capital growth in the future!
@emma171 – Hahaha google drive, love this, I do it sometimes as well, but remember google maps are not very up to date either!
In Australia gentrification tends to happen on a broader more all-encompassing scale and areas close to each other eventually homogenize. The confusing thing for the Aussie investor is how one street can be great, but the next street in the same zip code can be completely ghetto. The data tools are a great starting point but can’t usually make that distinction either, only someone who personally knows the area well. I agree with the earlier stated notion that price is a pretty good indicator.
Also how ‘ruff’ it really gets isn’t necessarily understood by the Aussie – except for some indigenous communities we don’t have those types of conditions in Australia. So rather than thinking Woodridge or Inala, think Cherbourg. Then add firearms to the equation.
In FL for example the equivalent of Australia’s “Fair Trading” offices is the Division of Consumer Services http://www.800helpfla.com/ I think they have a similar division in most other states too. They take complaints and mediate on your behalf. Not sure if they have “teeth” though – the time I considered utilizing their services they indicated that they can’t “make” the other party respond, it is more an optional program.
jayhinrichs wrote:TZ
Not sure if your being facisous or not.
However,,, I for one have gone out of my way to help your Countrymen and others try to figure out what they do or do not own. All for nary of a thankyou…
and in this case as stated above this was a loan to a US person or company for a rehab flip… This is what I do and have done for most of my carrer…and have offered to help. to date all we have is the person or company that Lovehouses lent to and an address and a link to a Biggerpockets blog…. Biggerpockets is like the Forum here in the US bunch of people posting.
when and If Lovehouses cares to share his original documents I will be happy to tell him what he has at no charge… Or he can hire an attorney in the state the property is in and send the original documents and pay for a foreclosure… this if indeed he has a valid mortgage held over the property…It major issue here is whether he has been totally defrauded by this individual.
The house if it has not been rehabbed is probably only worth 5 to 8k max… and if thats the case, I am not sure if he is in a mortgage state or deed of trust state… DT is really simple to foreclosure, Mortgages its a court case… So how much money are you going to throw at a deal that your return is only going to be 5 to 8k if your lucky…Me I would just write it off and say goodbye I got screwed..
Now if the property has been rehabbed and their is a tenant in their its only value is what another marketing company could sell it for and or wholesale as there is no retail sales in these type of renter areas by and large… So maybe he just keeps it as a rental and Maybe Kyler or another KC Vendor points him in the direction of a PM…
So I will leave it there… No up side for me, just trying to help if I can.
JLH
No this was a fair dinkum comment as we would say in Oz. And the bickering adds to the entertainment value although the moderators are quick to step in with their mops and buckets
jayhinrichs wrote:maybe there should be a spot on this site that has the most common links in the markets that are attracting the most interest.One could look for their city and wha La there is 5 to 10 links,,, county GIS,,, county tax Assessor, Public MLS, Zillow and Trillia ( even those are notorisly bad for true values they provide other details) On line trustee services where you can see real time foreclosures just like US investor see them ( some of these you have to pay and join to gain access others are free.
one that I think the audiance would like to check out is:
http://www.northwwesttrusteeservices.com
just go on sign in and play around you can see whats happening forelcosure wise in the Pacific Northwest and other areas they service.
Just remember this is just one of Hundreds of companies that prosecute foreclosures in the US….. But these are the true sources of these foreclosure deals… these are the guys I buy mine from this is what buying a bank foreclosure looks like, You do not buy direct from a bank you buy from one of these services the banks hired to cry the sale at the steps.
Let me know if anyone likes this would like to get some feedback
Posting the most common links would be a great idea for those of us learning the ropes, maybe on a separate thread..? Also what do you think of http://www.findcompsnow.com ?
This forum has turned out to be a fascinating read, great to see the willingness to band together and help.
South Florida is in hot demand from international buyers due to the proximity to the emerging markets of Latin America. Inventory is shrinking by the day and prices are rising fast…so competition is pretty fierce here atm which can be a pain but it may be worthwhile in the long run
Yes Jay that’s pretty much how it happened! I’m aware of the limitations on the public sites – so I’m really pleased that as of yesterday I finally have full direct access to the MLS : D
I’ve just been emailed a 55k deal courtesy of a Sydney based US RE investment company check this out, this is what the email says:
“3 BEDROOM
2.5 BATH
BUILT 1999
2 CAR GARAGE
2190 Sq Ft
Potential Rent: $750 – $850This home was sold in 2003 for $138,000. This is a single family home and not a condo. Amazing deal. To rebuild a home like this will cost more than two times the asking price. At this price you get the following:
Renovations to be completed within 30 days of closing
Free tenant placement
Guaranteed rent after 30 days of closing
1 year warranty on all repairs completed”…….What the pitch doesn’t mention is that this property is currently listed as pending on the open market @40k, the 2011 tax assessed value has been dropped to $24,912, other similar properties nearby are listed and have been sold for around 40k as early as last month.
Ouch!MikeF wrote:TZ wrote:“An Australian Citigroup subsidiary, Citibank, has now started to facilitate loan transactions for Australians looking to purchase US property.” http://www.abc.net.au/pm/content/2012/s3480532.htm. This appears to be a new initiative. Perhaps contact Citigroup to see if they are planning to expand their services in the near future to include India, seeing we have so many Indian expats living in Australia?Have confirmed via Head of Mortgages for Citigroup here in Aust that …….sure they lend for o/s purchases you just need A$ income and Australian located security/property.
Awesome!
AREIJoel wrote:Guys,I truly believe that going through an agent who relies on commissions is the wrong way to go about it from a foreign investor perspective.
If you are going to be managing a property from so far away, then you need to align yourself with a company who is not in it for the short quick profits. Sure everyone needs to get paid, but there is a difference between going with a quick sale agent compared with a larger turnkey provider who is not only interested in the long term success of your investment but values your business relationship. It is a win win for each party.
Where is the agent going to be in a 1 year from now and somethings goes wrong with the property?
Research the companies that have considerable experience – Companies and experienced real estate guys who have not only seen the last boom and bust but have also gone through the 90’s crash, and if possible the 80s crash. Also, check if these same professionals are investing along side you and have skin in the game. If it such a good opportunity why wouldn’t they be investing as well!
I don’t get the “skin in the game” point you are making – with the AREI business model it appears the investor buys AREIA’s skin in the game, would you mind clarifying? An agent’s skin in the game is their reputation and their license, should regulatory audits find that they have compromised the fiduciary obligations they owe their client by law. How do you find the turnkey provider one year from now if they are not licensed, and how do you know they are a larger, established firm with a track record? Does AREI fall into that category?
Thanks very much for sharing WI great info
Hahaha yup
Yeah I know – I’ve been worried about lowering my credit score on a few occasions due paying utility bills late, simply because it was complicated to find an electronic way to do it (I have a checkbook but really, do I want to queue at the post office to mail a piece of paper in this day and age?). On the other hand Chase has some features that I haven’t seen in Australia before, such as taking a photo of a check / cheque with your iPhone as a way of depositing it..
Great insight thanks.. Are there any particular companies you prefer dealing with, when you do get insurance? If so why? And do you recommend the services of your own claims consultant who has your back when it comes time to assess the damage and fight for what you re entitled to? I met one at out local real estate investor s association who also comes to your property and audits your coverage before anything happens, making recommendations to add or drop certain features, what are your thoughts?
Wow incredible, on the other hand their horse and carriage logo says it all… Speak to the manager and threaten you will move your business to a more contemporary institution such as Chase, if he cannot assist you in getting this done immediately.. Good luck..
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