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xarp
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@xarp
Join Date: 2009
Post Count: 21
February 13, 2011 - 11:42 pm
As I promised, I have calculated the rental yields for all US states. You can see the table here:
http://www.buyingpropertyinusa.net/market-research/price-to-rent-ratio-and-gross-rental-yield-in-usa
Hopefully it will help some investors with the choice of the US state to invest in..
xarp
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@xarp
Join Date: 2009
Post Count: 21
February 6, 2011 - 3:00 pm
Hi guys,
it's definitely better invest through the LLC rather than in personal name. Even though you would be the only member, it has sense for liability protection, but mainly for taxation purposes. You can deduct so many more expenses on the company that way.
Definitely when you would be investing in a group of people, it's easier to start the LLC and have the shares in it specified in the operating agreement.
When I was starting with my investment in the US, I just used an online service for starting the company. I have used incparadise.net and got the LLC in nevada in 2 days for about $300. There are more services like that in the US, so you might find another sites as well, but that's basically all you need. I don't think you have to hire attorney for this.
The only reason why to call attorney would be to review the operating agreement in the case there would be more members in the LLC, because the generic operating agreement from the online companies might not be sufficient for the specifics of voting and transferring the ownership of the members etc.
For the financing/lending part – in fact in the USA they don't borrow just to the company, but your name is in the lending contracts as well. It would be the best, if you could borrow just on the LLC, it would be much better, but much more risky for the bank.
xarp
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@xarp
Join Date: 2009
Post Count: 21
February 6, 2011 - 1:50 pm
There is definitely something nice about having a property near the beach. On the other hand, if you are looking for a stable market and good long term returns, it might not be the one near the beach. ;o) I would love to own a property in Florida or California, but simply I can't afford to invest there, because the returns are lower.
I have done the research for Kansas and the average rental yield was 8.8 . You can see the sources where I got the numbers here:
http://www.buyingpropertyinusa.net/market-research/high-rental-yield-markets-in-the-usa
But that's just an average, and you can find properties with higher rental yield and gross returns. I will try to calculate this for all US states this weekend, so I will post it here then.
xarp
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@xarp
Join Date: 2009
Post Count: 21
February 6, 2011 - 1:21 pm
Hi naplesguru, welcome at PropertyInvesting forums!
How does the market look in Naples? Did the house prices go even lower in 2010 or did they start to rise?
xarp
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@xarp
Join Date: 2009
Post Count: 21
January 30, 2011 - 10:31 pm
It depends quite a bit on your strategy. If you are speculating for some rocket growth in the next 10 years, maybe you should invest in the worst hit states – such as Florida, Nevada etc.
However you might have troubles having some positive cashflow, due to longer vacancies etc. If you look for good rental yields, some of the "less attractive" states can be actually the best.
I wrote an article about the different markets in the US here. I am planning to put together a table of all states and their rental yields, since it can be quite handy to other investors on the forum..
xarp
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@xarp
Join Date: 2009
Post Count: 21
January 30, 2011 - 10:26 pm
I was researching this for quite long time as well. Once I found a mortgage broker who was promising me similar great rates in Florida (I think it was Bayburg financial). I was dealing with him over a month – putting all different paperwork ready, statements, proofs of address, credibility from my mortgage here etc. Long story short, when it came to the actual deal, he found out that it's not possible for some reason and that the loan wasn't available for foreigners any more. ;o/
In the end the only financing I have succeeded with was owner's (seller's) financing, but that's something you can't do with REO's for example..
xarp
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@xarp
Join Date: 2009
Post Count: 21
January 30, 2011 - 10:20 pm
speedy gonzales had some really good points. I have bought a condo in Las Vegas actually, and have researched the market there quite a bit. Be very careful with the North Las Vegas – where most of the cheaper properties are found, since that's sometimes almost a ghetto.
On the other hand, if you buy a nice condo and the HOA won't be close to a bankrutpcy, you don't have to be having that many troubles. I found a tenant after 2 months and it's now rented over a year, and I do get a positive cash flow each month.
On the other hand, it's impossible to get the financing for a condo from banks and in general it will be very hard to get even a seller's financing in this area.
That's also why I decided to buy the latest property in totally different market – in Kansas. ;o) Even though it might sound quite funny, the rental yields are more than double when compared to Las Vegas and the vacancy rates, unemployment etc. is all better there.
I have written an article about these markets and my experiences on my blog, if you would want to hear more stories..
xarp
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@xarp
Join Date: 2009
Post Count: 21
January 19, 2011 - 9:23 am
Wow, that's great! I thought you might be just own 1 property and you are a wholesaler.
I am investing on my own, so I probably wouldn't use your services in buying a property – but theoretically I maybe could see if you could help me with rehabbing in the future.
By the way, have you also checked Topeka, KS market? What are your thoughts about that?
xarp
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@xarp
Join Date: 2009
Post Count: 21
January 18, 2011 - 12:35 pm
morekc wrote:
ActToday wrote:
I don't always agree with Nigel's posts but in regards to Vegas I think he is 100% correct.
according to http://www.fhfa.gov this is what the las vegas market is doing. Year Quarter Las Vegas-Paradise, NV 2010 3 -8.38 2010 2 -14.60 2010 1 -19.20 2009 4 -18.89 2009 3 -22.12 2009 2 -26.78 2009 1 -29.75 2008 4 -33.77 2008 3 -29.23 2008 2 -20.68 2008 1 -13.02 this is kansas city Year Quarter Kansas City, MO-KS 2010 3 -0.58 2010 2 -2.85 2010 1 -4.44 2009 4 -1.76 2009 3 -1.25 2009 2 -1.50 2009 1 -1.08 2008 4 -2.68 2008 3 -2.46 2008 2 -1.09 2008 1 -0.10
Thanks for sharing the numbers! Have you invested in Kansas then? I actually bought there a Multifamily property last month – in Topeka, Kansas.
I wrote a short article about my experiences here: http://www.buyingpropertyinusa.net .
It is a 5-unit building and I got it for $55,000 and financed partially by the owner, so I paid just $12,000!
What are your experiences with Kansas? Did you buy something directly in Kansas City? I was checking the market there as well, but the return on investment seemed to be lower.
Also, if you have some good contacts for handymen or property managers, could you PM them?
Cheers
xarp
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@xarp
Join Date: 2009
Post Count: 21
January 18, 2011 - 12:25 pm
Very interesting topic indeed! I will bring some of my experience here as well.
2 years ago I was similarly interested in these boom markets, where the prices dropped 50% and I thought it's the best place to buy. I bought 2 condo's – one in Las Vegas, Nevada and one in Phoenix, Arizona.
The reality is that the vacancy rates are really high, and it took me 1-2 months to get a tenant. What more, the rents aren't actually that high, so I am glad that I am barely breaking even. The only hope (or strategy for someone) is the appreciation in these states. You can't be really doing it for the cashflow.
I have switched my strategy now, and did quite extensive research about various states in USA – to find the ones which can provide the highest rental yields – the ratio of the purchase price and rental income. Quite obviously these "high cash flow" states aren't Florida or Nevada, but instead little bit less interesting ones, like Kansas, North Dakota, etc.
I have actually written an article about the market/state decision here:
High Rental Yield Markets in the USA
I will be soon posting the full table of all the states and their Price to Rent ratios, including Texas.
The bottom line is probably what the investor choose as a strategy – either speculating on appreciation in the past-boom states or rather long term holding strategy for higher cashflow, in other areas.
xarp
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@xarp
Join Date: 2009
Post Count: 21
November 4, 2010 - 2:55 pm
J Koro wrote:
Hi all,
My name is Justin and I am new to this site, though I think it is a fantastic forum site.
I am a newbie getting started in residential land development in Queensland. I'm still getting everything organised, but I thought I'd ask people experienced in property to minimise my mistakes – hope you don't mind! Regarding the sourcing of properties, I was trawling the internet and asking my investment friends on their choice of software.
The ones mentioned were – RP Data, PDS Live and Property Analyser from Real Estate Investar. My questions are:
Do any forum members use any of these programs (especially the last one, Property Analyser)?
Upsides and downsides? Customer support?
Are there any other software packages that I've forgotten?
Any other methods of sourcing properties (apart from REAs, realestate.com.au etc)
I'd greatly appreciate help in this matter,
Justin
Hi Justin,
I checked Property Analyser, but is seems to be pretty expensive software. I am using http://www.RealEstateAnalysisFREE.com – it's a free real estate investment software and can definitely do lot of your property analysis. It's worth to try it for sure.
xarp
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@xarp
Join Date: 2009
Post Count: 21
November 3, 2010 - 8:51 am
AJay7 wrote:
secureserver1 wrote:
Hi Hendrick,
Personally I start with http://www.realestateinvesta.com.au – they source all real estate listings from all the major real estate websites and allow you to search with multiple parameters such as reduced prices, mortgagee sales, sales that are well below the median price point for an area, yield, vendor finance offerings, properties with development potential and more. Makes it much simpler to find the better deals in the first instance. Hope that helps.
I agree with secureserver1, http://www.realestateinvesta.com.au is a great resource and well worth checking out
Yes, that's a good website, I was using it as well. Then once I have the details of the property, I am trying to look for similar properties for rent in the area – so I can estimate the rental income.
After that I use http://www.RealEstateAnalysisFREE.com – a free Real Estate Investment Software to see what are the calculated returns and NPV of the investment. I will do this for at least a few similar properties and then compare them to see what would be the best investment.
xarp
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@xarp
Join Date: 2009
Post Count: 21
November 1, 2010 - 8:00 pm
Hi,
I have found a free software and it's actually surprisingly good. Definitely much easier to use than some spreadsheets and is better than lot of the paid programs too. It's called Real Estate analysis FREE – http://www.RealEstateAnalysisFREE.com/
I have bought a few properties in the USA and have used this tool to figure out my estimated returns and NPV's. There is also cool property comparison tool – where you can select properties to compare and then see all the pros and cons about each one.
If somebody else knows about better tool, let us know!
xarp
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@xarp
Join Date: 2009
Post Count: 21
November 1, 2010 - 7:42 pm
Hi Andrew,
I have done quite a big research of various real estate investment software and in the end I found one free real estate analysis tool, which has some qualities which even the paid options are missing. There might be some even more complex tools, but definitely for free.
It's called Real Estate Analysis FREE : http://www.RealEstateAnalysisFREE.com/ .
I hope it will help you with crunching your numbers. ;o)
xarp
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@xarp
Join Date: 2009
Post Count: 21
November 1, 2010 - 5:12 pm
dtrump wrote:
To confirm, are you referring to a computer software to do some financial modeling (e.g. different rents, vacancy, rising interest rates, etc). Or, are you referring the software called AutoCAD that is used for 3D design?
If you meant a real estate investment software or simply some real estate analysis tool – I would definitely recommend this one: http://www.RealEstateAnalysisFREE.com/ .
It's a free Real Estate Analysis tool and simply the best I have used so far. It calculates various cash flow scenarios and financial indicators (like ROI, IRR, NPV, etc).
Hope that helps..
xarp
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@xarp
Join Date: 2009
Post Count: 21
November 1, 2010 - 3:27 pm
I am using http://www.RealEstateAnalysisFREE.com – it's a free real estate investment software and can do most of the stuff what PIA does – plus it has a few more cool features.
There is also a resell analysis in the reports, and you can configure there quite a bit of things too. It's not the best software in the world, but definitely worth checking, since it's free.
xarp
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@xarp
Join Date: 2009
Post Count: 21
November 1, 2010 - 3:17 pm
Hi,
I have checked both real estate investment software tools, but they seem to be really expensive for what they can do ;o(
I was researching this for a while and in the end I found a FREE! real estate analysis tool which has better features than most of the paid options. It reminds me little bit the style of zillow.com or something like that.
You can check it out by yourself: Real Estate Analysis FREE http://www.RealEstateAnalysisFREE.com
xarp
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@xarp
Join Date: 2009
Post Count: 21
November 1, 2010 - 3:02 pm
Scott No Mates wrote:
Irr is time dependent. Make sure that your interest rates are consistent ie annualised rate or monthly rate etc. Alternatively plug your cashflow numbers into excel & run a dcf & irr.
I am not sure what type of software you were using either. I am using a free Real Estate analysis software at http://RealEstateAnalysisFREE.com . It will calculate you correctly NPV and IRR and there is also description of both indicators.
Simply said though, IRR is a discount rate of an investment generating 0 NPV. I prefer to use NPV rather than IRR in my calculations, but in that case you have to figure out the discount rate suitable for your investment.
Hopefully it's little bit more clear. Check out that software though, I found it really helpful for my real estate analysis and it's free. ;o)
xarp
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@xarp
Join Date: 2009
Post Count: 21
December 16, 2009 - 12:13 pm
SunnyGirl wrote:
Hi all
I currently own property here in Australia with a family member with a view to investing further in the near future. For the last few months I have been looking at US real estate online just for fun, but now that we're considering the possibility of actually purchasing another property to rent out I suggested perhaps it may be worthwhile to look into the US markets as prices are comparably much lower than here, and there seems to be the potential for decent rental income.
The only thing is, I'm stuck as to where to start my research! There is such a multitude of information available online, I don't know where to start.
I have been reading older posts on this forum regarding investment in the US market and hoped some of you could provide a starting point for my research.
My biggest consideration is where to buy. As the intention would be to purchase a property to rent out, any advice on particular cities would be great. I would obviously want somewhere that can provide a decent rental income with a low vacancy or tenant turnover rate.
So far I have looked mainly in Chicago, mostly because I have a friend who lived there and she spoke highly of a few neighbourhoods there.
So any websites to start me on my journey would be great!
Hi,
I am also researching lately and I am going to invest in US real estate as a foreigner. I am finding lot of valuable information on trulia and then there is one great blog about buying property in USA: http://www.buyingpropertyinusa.net/ . It's written by a guy who just bought 2 properties in Las Vegas and Phoenix.
I have a question for you as well though – I was looking at Chicago as well and it looks like a quite interesting market. What are the neighborhoods which your friend recommended you? Can you share that info?
Thanks!
xarp
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@xarp
Join Date: 2009
Post Count: 21
December 16, 2009 - 11:43 am
Industrie Developments wrote:
Xarp,
Good work, just be aware that if you set up in Nevada you are not able to buy Nevada properties with that LLC.
There are several other states which don't have state tax but Nevada and Delaware are the most favorable.
Thanks for the web site referral – will check it out now.
Hi Michael,
I was checking it out now, and I believe that you can buy property in Las Vegas through a Nevada's LLC without a problem. Also the guy actually writing the http://www.buyingpropertyinusa.net blog did it as well. Why do you think you couldn't buy the property in the same state (Nevada)?
Thanks
xarp