Forum Replies Created
No rental income however you sell for 5 to 10 times what you paid for it
I just bought 7 lots premeir Henry county location. Houses are in today's market. 300k plus we snagged them for under 5k each. Will sell within 3 years at 30k plus each. Nice alternative investment. And no land lording which is worth a bunch
I have been trying to buy homes in Henry County, no luck.
So how do you secure land?? If you care to share…..WI
"Here is my prediction… better popular markets will start to see bidding wars… Its already happening in Atlanta, Although How low could those prices go Cricky ( or how ever you spell it)"
Crickey…. Jay I think you may be right.
Good deals are far and few between – lots of competition, I also suspect that owner/occupiers are jumping into this market making it tighter to secure a property at the right price. At least we have the Aus $ heading up up up almost – $1.08. Time to bring the money down.
Though there will be a cut off point when the yields are no longer attractive and overseas investors will bail out??
Also, OK you buy land and hold, what about in the interim…. no rental income, that is a problem for me.
Cheers WI
. Speaking to some local RE Agents this week to see what they think and what has happened historically with this situation in Rockhampton
That is a good idea.
My brother-in-laws home was completely asbestos unfortunately, they then decided to brick clad the home, so now they are stuck with it.
They did receive another offer, however considerably lower than selling price due to asbestos.
I have a beach shack with asbestos roof, I was pleasantly surprised to find out the cost to remove the roof was $3200 I was expecting around $6000, make sure you shop the quotes.
Cheers WI
Just checking out my insurance on one of my properties in Atlanta
$168,000 – premimum -$896 per annum
Also include premises liability $500,000
"What do you think? If you wanna share the way you structure your taxes would be much appreciated"
Hi Frank
I have been purchasing properties in US using LLC, I have 3 properties in each LLC to minimise my exposure, my trust is a member of each LLC.I am using Australian funds to purchase the properties and setting up loans for each property. I will charge each LLC interest, still working out how much, possibly around 9.5%.
My accountant has also organised my US tax returns to align with Australian Tax return, makes sense to me, I want both submitted at same time.
Cheers, WI
"hahaha, this forum is the best one i use hands down"
Kylermricet
I am enjoying this thread too, there is also another forum you may want to check out Somersoft.
I wish I could say the same for Biggerpockets, I have found this forum hopeless, I think they now charge you to become a memberl. Any good US forums??
Cheers WI
HI Shane
My brother in law is trying to sell a property, he has had 2 offers both deals fell over, apparently once both buyers found out it had asbestos walls they pulled the pin.
What State are you in, as I may be able to recommend someone who can remove the asbestos.
Personally I would get rid of it.
WI
Ha ha ha…. as they say CASH IS KING
Hi Lawsjs, you have once again managed to write a book and you forgot to answer my question "why do you endorse a product that you obviously know nothing about"???
Would welcome feedback from Jay?
Cheers
WI
Hi Emma
The only concern I have with using US accountant is that they do not understand how Australian Trusts operate/work and for me this is so important as my Australian Trust is the member of my head LLC.
Case in point was a recent incident where my Oz accountant recommended a resolution for my trust which would assist with reporting issues and also account fees, not something a US accountant would do from what I have seen to date.
ICheers, WI
"Jay is the real deal and I would look at his stuff very closely"
Lawysjs
Firstly, I am not Karina, you are jumping to conclusions.
Perhaps he is providing a good product that suits a certain type of investor who knows…. as I mentioned – there is no way I would want to be the "Bank" for any business, and what if the deal goes "belly up", negative equity do they wear the loss???
I am surprised that you endorse a product and by all accounts you have not looked at it closely, ie "nuts and bolts" etc.
WI
Just shows you how important timing is, the Perth boom started in 2001 peaked at 2006.
What I think is the icing on the cake is if you also chase the cycles, when Perth peaked it was not too long after that the Melb market had a little mini boom jumping over 20%.
WI
"Jay has an interesting concept which I quite like, you in effect 'partner' the building and get a lower return, but his group solves the day to day problems for you. The more experience you have I think the more you will realise what a good deal that actually is.".
Lawsjs
So would you personally buy this product?
I have no real idea whether it is good or bad, however as an investor what I do not like is that I have no control on what is purchased, also I expect there are upfront fees inbuilt in the purchase price of the property.
I become the bank and fund the deal and this company gets a share of the equity when the property is off loaded.What happens if the deal goes sour, the property actually loses money, no growth, do they also wear or do they walk. My money, my risk……
WI
$ per sq ft…. Be a bit careful… I know what you mean but as I said to someone in Vegas once…I can show you $19 a sq foot .. Doesn't mean you should buy.. It may never rent and should be bulldozed!
Of course you are looking at a homes that are in a good neighbourhood/subdivision and you would be looking at construction no more than 10 years.
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
"So what I like about Atlanta is you take that same 125k Dallas home and we are all in at 50 to 70k… It sold new for 150… we are buying for far less than replacement cost. And I do beleive when all the properties get absorbed here over the next 5 years. and new construciton starts back up… New construction in these markets will be 125 to 150 for start… And these projest will pull our 50 to 70 homes up to within 20% of the new construction. there by doubling our money on capital growth. but buyer beware you buy in the wrong neighborhoods in Atlanta and or buy super cheap Atlanta and you will get the exact same experince you get in the other mid west town… troubles with rents and renters and no upside ever".
Sounds good to me.
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
"So I think if you are charging a fee and truly care about your clients I am all for it.So I understand why they don't put the addresses on their web sites( If you take the time to help your clients and do everything they don't have time to). Which is still amazing to us in the States where information is easily attainable. Again different culture but Robert Kiaski spelled wrong has thousands of paid members. So I guess we do it here as well in the States".
Hi Alex
some of these companies selling to Aussies will charge $4000+ once this is paid it is only then will they provide addresses, this is wrong as you need to know what the company is purchasing, why the hell would you join if you can not do basic DD on what they are sourcing.I would never recommend that anyone pay a fee upfront to anyone without addresses. If the properties are great then there is no reason for this.
WI
"I am still waiting though for folks to weigh in on my question..
"Stable markets Vs a vi Massively defalted markets to be or not to be that is the question.
I would really like to hear others thoughts on this… And rationalization for whatever postion you take."
Hi Jay
I think you have made some good points and I agree with your view.
It makes sense to purchase in areas in US that have been hammered, I believe you will have a better shot of uplift when the market recovers especially if you purchase properties well below the actual building costs.
Purchase at a lower entry level with cash flow opportunities now. Not some "pie in the sky" growth, who knows when that will happen.
As I mentioned in a previous post – "Where to buy "Houston or Atlanta", I stated that I did not see the point in purchasing in the US in areas such as Dallas, etc where the rental yield is no better than what can be achieved in Australia, why would you take the risk may as well play in your own backyard.
WI
Alex SC wrote:Hey All,
After numerous conversations with international and National clients the last few weeks, we are looking at viable exit strategies with the USA properties down the road. I am not sold on the 5 year return that a lot of other investors are speaking about. I am also concerned about us turning retail areas into glorified rental markets. This is a big concern for me, as I see some international clients thinking in 5 to 10 years they can sell these deals that they are purchasing capturing appreciation. My first concern is that Americans in general do not move to rental areas. This could change with the new nicer rental homes that we and other companies are now dealing with. Again, this is purely speculation for down the road.
So if one is buying for buy and hold ( cash flow ) and not really concerned about future appreciation, this should not interest them. If one is looking at being able to sell in 10 – 12 or 15 years, this could be a viable option. Again, this is just my opinion, but I am not sold on appreciation coming back in 5 to 7 years. The USA is going through some problems that are new for us. I do see us as a strong resilient nation, and expect things to come back to a reasonable pricing point. To me, this 5 to 7 year plan is more of a marketing strategy for the sales teams. When they say buy now and in 5 years, the market will rebound. Again, I am not saying anyone is wrong, I am just saying I am not sold on this concept. At least not for the markets I have been to, which include all USA investment markets except Texas ( I have not been there).
Just some background information: the phrase 'lease option" in the USA. Again, to me this is really a false phrase (just a marketing ploy). We as a property management company use it to hopefully bring in a better tenant. Besides putting some extra cash in your pocket as the investor with a slightly larger down payment, I don't see this set up as a win-win situation. Investors might win with extra cash, but tenants are not being taken care of. Yes, the tenants are the most important factor ( besides property management for investors in today's real estate market). Our property management company sets most leases options ( rentals ) for our tenants. I know in the beginning very few will buy. Not to sound repetitive, but this is more for our marketing end to keep properties filled.
Now again in the end this will really come down to each individual investors game plan or investment strategy when they get started. This below is what we are looking at in the markets, in which we buy and sell homes. Again, these are for cash buyers only. One cannot truly owner finance an existing property with financing on that property. Some people will do this (sub lease and creative financing) but I think they are playing in a gray area where loans can be called "due".
Our thinking is for cash deals only.
Owner Financing is what we are talking about here.Let's start off talking about the advantages of owner financing. Everyone has this high expectation that in 5 years or so the homes they are purchasing today in the U.S. will be able to be sold at this high retail price. The only true way to do this is to Owner Finance the property. You can sell the home to a buyer at tomorrow's value today (Which is a risk for the back end buyer).
Here is the way that it should be done to give you, as the owner, the most security as possible. You would do owner financing for the person looking to purchase your home (current renter). This is done just like any other Real Estate closing, It will be done through an attorney. You would want to set this up in the beginning, the buyer will be paying a a balloon note. This can be set up we are thinking on a 8 – 10 – 12 year mortgage note.
This will put them in a position to where they need to refinance to pay off the investor. Secondly, every home should have a deed in lieu signed at closing, This will circumvent any costly foreclosure fees and the lengthy time that is involved. If the buyer does go into default, it is a $30.00 fee to file the deed in lieu and the home is returned to you. Now keep in mind, that when you do owner financing, the buyer is now responsible for the taxes, insurance and any HOA's. You will be named as the insured on the insurance policy. This is another advantage of doing the owner financing, as everyone knows property values in the US have fallen greatly, most of your retail neighborhoods have fallen victim to this and have started turning into rental areas. Rental neighborhoods will take much longer to recover. By doing owner financing you and other investors are actually helping to prevent these neighborhoods from turning into rental areas and bring the home values back up, or at the very least keep the values in the area sustained. Of course, you can only owner finance if you yourself or company own the property free and clear. This is a major benefit for you the owner, the home buyer, and the actual neighborhood.
Again this is our company looking at viable options for getting out of properties a few years from now. Looking for some feedback and comments .
Sincerely
Alex
[email protected]
Skype Alex Franks 2002 Charlotte NC USAHi Alex
can you define what a "Rental Area" is??
I understand you are buying in areas of Atlanta such as LIthonia, there are so many subdivisions, older cheaper properties that I would not touch, also nice big homes in good subdivisions with great facilities. I am told many foreclosures in this area, yet I am renting a property in this area for $1300 per month, big home, brick face, excellent subdivision…. So are you saying this will not sell? I picked this up for $48,000 and looking at comparable sales they are around $85-90,000 today.
Also realistically foreign investors would not be purchasing expensive homes in purely non-rental areas if there is such a thing……..simply because the return would be hopeless.
Contrary to what some believe, I know many investors from Australia who are buying exceptional properties, well below market value in reasonable areas. Cash flow is important but this does not mean that everyone is purchasing rubbish, some are just finding those gems
It would be foolish to jump into the US and purchase a property with no cashflow and as per your comment – who knows when US recovery will actually happen.
Would be interested in your comments.
Thanks
WI
Texas Cash Cow Investments Australia wrote:worldinvestor wrote:staceymac wrote:I am going into San Antonio myself. I head off there next month to do some due dilligence as part of a buying group. I will look at the other markets in Texas as well whilst I am there. I'll report back my findings. For me my main concern wont be paying a bit extra for insurance or taxes or whatever ongoing expenses. That's a business/investment expense as long as all the overall numbers are right that is. It will be getting the right property in the right spot at the right time but probably for me will be having the right people on the ground as my team. I know someone personally who got ripped off buying in the USA. The yanks see us as pretty soft cashed up targets unfortunately. At some point being all the way over here you need a good team behind you if you cant do this fulltime. Fulltime is my goal though.I think your kidding yourself Capital Growth in Texas – the US economy is a "basket case" .
I take Economists opinions with a "grain of salt", most analyse to death and they never ever get it right ……. they are not investors. We have had lots of experience in Australia with economists getting it wrong.
As I mentioned I would rather invest in Australia than Texas as returns are similar.
There are many additional costs associated with investing in US, you know it and I know it …. property managers retaining 1 month in advance is just one killer, plenty more, just erodes the yield.Stacetmac, good luck, don't get suckered into the gloss, if anyone offers finance, make sure you get your lawyer to check out the contract, but most importantly make sure you are not paying too much for the property, and those bank valuations, don't buy that.. with short sales, foreclosures and forgeiners purchasing property in US at over inflated prices it is difficult to know what the true value of a property is, regardless of whether it has a "bank value" do your own research. Plenty of information and tools out there to help with this.
All the best
WI
I would be looking at areas in US that got hammered as there will be many more opportunites for upswing/growth.
Why would you purchase in Texas when yields are not much better than Oz, so much risk….. by the way, if you are purchasing only 1 property, give it away… you need to be purchasing multiple properties to cover costs, legals, interest, fudge factor ….. etc.For example you can purchase in Atlanta a property that sold in 2003 for $130,000 for 38,000, building costs in Atlanta currently $70-90 per sq foot, I am purchasing on average $25 per sq ft. now you are talkin….. Buy 10 of these grossing over 21% and you will be sitting pretty
WI
Those opportunities you speak of could be many years away yet WI and the opportunities you speak of…have been/are already happening in Texas.
#1. Employment Growth in the US
# 1. Lowest Cost of Living in the US
# 1. Population Growth highest in the USSome interesting reading in this link written by Dr Mark Dotzur. Chief Economist at Texas A&M
http://recenter.tamu.edu/pdf/1983.pdfAnd yields not much better then OZ….c'mon now your really kidding yourself. If you were talking yields in California then yes we could all agree !! I am sure once staceymac starts she will continue building her US empire once she see's it work for herself and builds confidence.
