have never posted an "example property" etc because it will come down to WHAT IS RIGHT FOR YOU.
Actually, I think sample deal breakdowns are very helpful – not from the "model property, this is what you should be looking for" perspective, but more for the purchase/annual costs breakdowns, the details of the process involved, and the criteria used generally (aka "why we recommended this property").
We receive very positive feedbacks on the deal breakdown sample on our website – it actually paints a very clear picture for people of what they should expect, as opposed to "bottom lines".
Thanks for reminding me, time to post another deal breakdown here too
In regards to spruiker bashing, well its a shame that many come on here with an underlying agenda. Read between the lines and make up your own mind. There is a lot of scaremongering going on and all it does is confuses people and adds no value to the forums.
Not sure what you mean by scaremongering. While I too find the bad mouthing towards particular suppliers or fields of expertise distasteful, there's something to be said for providing sober information. Unfortunately there are quite a few slick sales folk who portray the process of purchasing overseas as unrealistically smooth, mega-profitable, or hassle and management free which, particularly in the lower end us market, is very far from the truth. People get stung, and badly, following this kind of spiel, and anyone who presents a clear and unblemished picture is doing potential investors a great service in my opinion.
I quite agree, Jay, but I think that "character" bears a bit more than what you specified. For me it's always the "Prime C".
Public records are great, but they only mean this particular provider (or at least under their current names, you can't imagine the lengths some frauds will go to) hasn't been caught doing anything – nothing about what they're capable of.
For this reason, I also include "infrastructure and size claim verification" in this C of yours – things like structure of company, legal mechanisms, sub-contractors and the relationships with them, and other instruments the provider (borrower in your lending case) uses to provide his wares. Anything un-towards there has to be explained in detail (preferrably prior to engagement and of the provider's own volition), and the picture match the provider's claims from earlier correspondence. This is part of what I was referring to when I mentioned experience and intuition (or empathy, or emotional intelligence, or whatever organizational psychologists are calling it these days in their management training programs).
The more the picture painted initially differs from what the actual infrastructure suggests, the less of a "character" score this company and its principals get in my DD process.
One example of what I mean – a company claiming million dollar offices, hundreds or thousands of clients all spread globally, experience and credentials going back decades etc, had better have the verifiable infrastructure to prove it – I don't mind dealing with young, savvy, single or dual person operations, for example – quite the contrary, I think in many cases they fit the bill perfectly for my investment strategy (although I wouldn't use, say, a young and fledgling insurance company or bank for this purpose) – there are advantages and disadvantages to this profile, and I'm well aware of them – but I do like to get the correct data from day one. If someone chooses to hide or brush something under the carpet prior to engagement, why on earth would they not continue to do so when they don't like the data down the track, when they're already in charge of my money?
This infrastructure verification sometimes requires quite extensive research. On the upside, once you've so verified a company and its principals, you can work with them for a long time (provided, of course, they can actually deliver, for which verifiable reference can vouch).
We all like to say "DD", as if it's a given, but I find it very interesting to find the lengths and types of drill-downs different folk do prior to investing with anyone or anything.
I tend to agree, but ufortunately that lawyer is just one such example, a great many more exist, some of which have far better fleecing techniques.
The question was a general one – what is the limit of due diligence? Terry's reply is one end of the spectrum, someone who would have followed the supplier blindly because he sounds like "he can make me some money" is the other.
I believe in the end, like anything, personal common sense, reasonable background and legal checks, coupled with experience and well informed "intuition" makes the perfect recipe for success.
Seriously look at what Ziv offers. Having spent years in both the US and Japan/asia I can onl suggest you look at ALL possibilities if you want a hassle free investment.
Yup, hassle free is right. The Japanese are so spoiled with this hassle-free management, even the monthly property manager's "all is well" and rental income report and the annual tax-return hassle of communicating with an accountant is too much for them sometimes – we've now started receiving interests from foreigners living in Japan, of all places – people who work in Tokyo, but want to invest in Kyushu, and can't be bothered to research, communicate and "manage" by themselves (if you can even call that "management"). No complaints on our part
5. Different concepts of time. "jam carot' or rubber time means that if you organise a meeting at 3pm no one will come until 5 to 6 pm. They will blame the traffic, even if there is none. So you will have days and days wasted just waiting around.
Lol reminds me of good old' Israeli time (where I'm originally from). I'll take Japanese train time, thanks. If the train runs two minutes late there's a conductor at the station exit handing out official apology notes to hand to the bosses in the office (or to the realtors I'm running late to meet, who view tardiness in a much similar fashion).
I only know my own market, wouldn't dream of pertaining to be a USA expert.
"anal retentive to boot" lol, it's the only way to do business in my book. My clients label me a pest at first, but as things progress I think (hope!) they come to appreciate this method. Beats the "it's all good, mate!" approach any day of the week. )
lifrey, out of curiosity, how do you plan on handling emergencies/issues when they occur? Do you plan on personally visiting to address stuff every time, or do you count on your property manager to do everything for you?
CF+, PG, so many ways to try and convey the fact that attractive return without speculation is not a given…when and how did this happen? Wasn't property investing meant to be a way to generate income on your investment?
I feel like my way of thinking and method of investment is becoming obsolete, but I really think all this "creativity" and speculation is doing investors (not to mention the worlds economy) more harm than good. Trusts, funds, tax solutions, negative gearing, "creative book keeping"…it really doesn't have to be this complex, folks. Buy something that generates more than your term deposits can, with reasonable (eg close to nil as possible) risk. There's always somewhere in the world where you can find this, no matter where you happen to be living at the time. Keep it simple, <moderator: delete language>
Couldn't agree more, timing is crucial in every market. And since there's always some crisis happening somewhere, "the world's our oyster", so to speak. just invest somewhere you enjoy dealing with, is my motto, as you'll be dealing with a local team if you're going to be owning property directly.
Would love to hear more about the cash-flow you're describing in Aus. Existing pre-tax yields, ROI expectations, equity speculation, areas, etc etc etc, as much as you can spare the time to list. Always great to learn from successful deal breakdowns
I haven't run across any area in Australia, even in recent years, which have definitely improved here opportunity-wise, that I was confident could generate sustainable positive cash-flow much beyond 6-7% long-term (which quite a few fund/bond/note setups, and even general everyday interest with some clever foreign exchange play can do with far less hassle).
The existing properties with dev potential and subsequent build sound interesting and like something that has potential to break this mold, and Australia's not a bad place to deal with as a rule – so I'd love to see an example of one of those (don't need identifying info of course, just area and type of residence, some numbers etc).
Specifically for Bali, heard some nasty horror stories, here and on other forums. They're very far from being a regulated investing environment. Buyer Beware seems to hold doubly there.
…Ziv appears to offer the same scenario of 12% cap rates plus almost nil property manager and tenant problems by investing in Japan condos. No appreciation but good solid returns…Exchange rates seem to be stable…
So the question is, why isn't everyone flocking to Japan via Ziv?
Thanks for that lol There are quite a few members on here, in various stages of the pre, mid and post purchase with us, who can probably testify to the pros better than me, so I'll play devil's advocate to myself and, for the sake of integrity, list the cons, as well as the counters to them –
1. Japan is Asian, which to those unfamiliar with the vast differences between the various countries in the continent, seems alien and dangerous – ironically, people feel that an English speaking environment offers less risk – as you and others can unfortunately testify, this is probably as far from the truth as possible, and while they're probably correct in Indonesia and China, to name a few "dodgy" Asian countries, in Japan's case, I don't know of any business environment that offers a more regulated and honest purchase and holding experience (which, coupled with personal circumstance, is what drew me there in the first place).
2. The more realistic side of the language barrier, is that you'd need to have a Japanese speaker at your side, or use a multi-lingual proxy like ourselves, and people are usually concerned that, should we some day go out of business for any reason, they'd be stuck holding an alien language deed and trying to communicate with people who don't speak a word of English. While this is true for all future purchases, (when you want to expand/sell, you'll indeed need to contact a property-savvy multi-lingual realtor there, which would probably cost more than we do) – but considering the zero-maintenance management involved in Japanese properties, all you'd really need to do in order to continue and manage your portfolios in such a case is pay a Japanese foreign exchange student $10 an hour or so, to continue receiving reports on a monthly basis and read them to you, or when a tenant moves out (once every 4-5 years on average in Japan), ask them to "be your mouth" in front of the PM until the property is tenanted again.
3. Finance to non-residents just doesn't exist. On the upside, it's quite achievable through Hong-Kong and Singapore banks, who are more than happy to loan against properties overseas (providing you meet their criteria of course). However, the overhead in most of these cases (flight to HK/Sing, Incorporation fees, setup costs etc) would dictate a certain minimum portfolio size and yield, and profitability needs to be evaluated on a case by case basis – whereas if you're purchasing with cash, you can be quite comfortably profitable on even one tiny property in Japan without a problem (again, as mentioned above, very different from the state of affairs with US or other overseas property investments, where if you don't plan to hold a substantial portfolio, you wouldn't really want to venture).
4. Then of course there's the capital gain issue. While this seems to be improving, for the first time in almost two decades, it's still pure speculation – and for some people, even 15% (which can definitely be achieved in Japan, just takes a bit of digging) is not worth the hassle if there isn't the potential for CG. Personally, I don't like this casino mentality one bit – I prefer my cashflow reliable, stable and realistic (I'm boring and chicken like that) – but I understand the "get rich or die trying" mentality too. Some people just can't wait 5-9 years to get their principal back, if they can't get out with a large profit in 3-5 years they feel it's not worth their time. Takes all sorts.
We're finding the same in Japan. More and more realtors are suggesting that deposits be sent through with offers to increase the likelihood of those offers being accepted. This used to be a tactic that was rarely used, but now seems to be almost a norm, as sales are settled much quicker and competition becomes fierce. And while you're entitled to receive your deposit back if the sale doesn't go through (as long as the contract hasn't been signed), it's still daunting for the buyers, and subsequently to us as their representatives.
Guess these are the signs of a recovering market…can't be helped.
"In the US or PG"- thought you were talking about Papua new guinea there for a minute lol.
The US is far from being the only place where you can get serviceable, affordable (eg diverse) and positively geared properties. There are other places that'll get you that with far less of a hassle and MUCH lower risk – also much closer to home
Yes, it's remarkable how small the units are, even for entire families. People very proudly show off their "huge" 50 sqm units to visiting friends and family, and rightfully so- they cost them a fortune
On the upside, it's amazing to see how well designed and brilliantly equipped these little holes in walls are. Seamless storage spaces appear at the push of a button or the pull of a lever, electric, telephone and cable outlets are ingeniously concealed out of sight, but in perfect locations and convenience, and clothes lines, extension cords and even entire beds disappear into the walls every morning. The famous "capsule hotels", where businessmen loved to bunk when away from home are prime examples.