I have been reading through some of the posts in relation to buying in the US with interest but have one really aching question. If I do happen to eventually decided to purchase Investment Property in the United States and mange to jump through all the hoops, timing issues, overcome challenges and the like to buy property in the US, how do I get them managed? I do not have many if any acquaintances in the United States at the moment. Sure enough I can get a few property managers on board, but how do I keep them in check? What is stopping potentially unscrupulous property managers from fleecing me when he/she knows I am thousands of miles away in New Zealand and it would take a whole day for me to travel over there (not to mentioned thousands of $$$) should something screw up.
Any tips, views and opinions on this subject appreciated.
Property Group International is the leader of buying and selling property abroad. For more information click here: overseas property
Hi Bender
Have no doubt in certain markets and parts of the US PM is a challenge.
From my experience (also clients) the whole rental system is different there than here and NZ. The remote managment compounds the problems as even if you are on the ground (as friends of ours are in Alaska) it sometimes requires almost a daily input which for me anyway just isn't worth it.
regards
Tonyfor me it isn't worth it either unless you are buying 5 plus properties.
for repairs I always get them to send me photos and reciepts for everything.It will take you time to confidently trust your contacts.
It is a complete different system over there from taxation to insurance to financeMake sure you have a plan in place and be prepared to lose your funds you put into your investment.
How do you intend to purchase .Are you wanting finance in the US or are you prepared to fund from a loc from NZ?
with the subprime issue going on you probaly won't get more than 70% ,depends on zip code of course.Good luck,you will need it.
Flash has addded the other issues of finance tax and insurance let alone FX fluctuations to PM. But even volume (we have 26 rentals) wont save you, it just multiplys the problems.
Try this out first:
take 500 a month and burn it every month at least
stay up at night or get up really early and phone up someone in US and ask them the same question that you have always asked them as if it is the first time that you are asking them, repeat this daily until you get zoned out
buy heating, plumbing and electrical equipment and throw it in the dump once you have paid for it and have the receipts repeat this at leas three times
pay someone to cut the grass but dont get them to cut it
pay someone to remove snow that isn't there
let your PM keep the rent that he got off the tenant
when you change tenants send your PM money for repairs and dont ask him what happened with the bond
keep plenty of back up money for the city violations that are going to come
dont open up your email becasue its only bad news that you will get
when you are having a relaxing time and switching off give your self a shock and run through the above .
If you are okay with all of that then you will be fine.
Hey guys ,
hope yr well !ha ha far out Bardon ,i miss you man ha ha Thats a classic.
a few things i'd add would be
let yr house out for long periods to people who dont believe they should pay you any rent ,as its their "right"not too
pay an agent 20% of the price of yr house to sell it , i mean" shift it "as cheap as possible
pay an accountant to do yr tax returns both franchise tax for the government and normal returns .,the pay an aussie one as well for yr home stuff
get yr house insured with a reputable company who later tells you when you try claim yr house wasnt covered when it was vacant
Find people you think you can trust ,then try them out for 6 months whilst losing svereal thousand dollars each time ,then repeat the process trying to find new people you can trust ,see how confidant you are investing from overseas after trying a few different "proffessionals:".
when emailing ,wait till youve sent at least 4 to 10 messages before expecting any reply,then when you receive it ,dont trust the answers to yr questions.
Then if yr only resort left is to go over and sort it out yrself,expect tp pay $5K up wards for 2 or 3 weeks stay by the time you add up the costs.Then have some more money ready to get yr property issues sorted out.
Guys at the end of the day there is some good opportuities in the usa now,but to try and make it work from another country is
not realistic.
If your heart is to make some money out of the market ,go and live their and do it for a few years then come back .
thats my recomendation.
I personally gave it a big shot ,managing the investing from australia ,but it is heartbreaking.
These few things that Bardon and i have mentioned are only probably 30% of the problems over there.
I have experienced most of them and alot lot more ,and i take full responsibility for my part and giving it a go,
but please just take it as a warning ,
go for property deals over there but do it yrself on the ground while living there full time.,otherwise run with the abundant opportunities in OZ at the moment.Kind regards
Luke Taylor | Hope Property Investing
http://hopepropertyinvesting.com
Email MeProperty Support,Strategist and Buyers Agent
Hi Bardon,World Changer,
Funny you should mention insurance,I didn't realise until I found out a few months ago the difference in premium for a 85 000
San antonio property.While tenanted is 515 year
or 2350 untenanted.Adding to the problem list is I have had to pay out approx $4000 for foundation repair,the insurance companies don't cover you
for this.The property has only moved in the last 6 months before due to the shifting dirt in San Antnio.
Something you can not see when you have a building inspection.Also I've had a pipe burst recently where I was not covered for water damage with insurance.
You think it would be mandatory but they say an optional extra.
I can't blame anyone but myself for not checking policy.
This cost us another $4000Also something we overlooked for inspection was the fence which we had to replace.
This cost us around the $2500 mark.The tenants are very fussy over there, it seems they look for repairs just for the sake of it
I'm only just skimmimg the surface.
World Changer,
Fortunatly in San antonio they charge 6% commision for selling a house.
20% Oh my god. ,Your house must be in Buffalo.
Bardon you say burn $500, try burning $800 Aus paying your US mortgage while trying to sell your house whlle getting repairs above,
We have got a contract on the house now so we are hoping everything settles.
Sold for the same amount we paid 2 years ago.At the end of the day you have just got to laugh and move on.
thanks for reading my whingeLook forward to sleeping in on a Saturday.
My alchol bills will be cut in half.Good luck
World Changer wrote:Hey guys ,
hope yr well !ha ha far out Bardon ,i miss you man ha ha Thats a classic.
Nice one worldchanger I hope he takes your advice.
This guy is a good US property manager in fact he is outstanding
flash wrote:Hi Bardon,World Changer,Funny you should mention insurance,I didn't realise until I found out a few months ago the difference in premium for a 85 000
San antonio property.While tenanted is 515 year
or 2350 untenanted.Flash your lucky I couldn't get insurance because I had WMD under my house in Brisbane…..
"There ought to be limits
to freedom…"— George W. Bush,
commenting on the website
http://www.gwbush.comWhy?
Were you intending to blow up all your US properties or something along the lines?
Have I misunderstood? LOL……Weapons of Mass Destruction "WMD"
They seen you coming!!!!
flash wrote:Why?
Were you intending to blow up all your US properties or something along the lines?
Have I misunderstood? LOL……Weapons of Mass Destruction "WMD"
They seen you coming!!!!
Becasue I was non citiizen and under the patriot act what else could I be but a terrorist with WMD
This is the best I've read on forum, what a laugh!
Man this seems like a really turn around to the posts I read 2 years ago about the US market.
Hope everyone thinking about US investing reads the posts in this Topic.
I've lost my Buffalo house to city council cause of deviant attorney and silly council sending rates notices etc to wrong address for 3 months, plus thousands in repairs with bad property management. Couldn't face the thousands of dollars needed to take city to court for a house that halved in value since sub prime problem, then hope to sell for whatever.Then Texas…… oh well that's just same drama different place!!
I have spent just a little time weighing up shares vs property, at least I can control shares without needing manager, and sell whenever I want.
Wish everyone well in their investing plans, wherever and whatever that may be.
Hey guys,
ha ha Bardon man you feel like employing someone like that to manage people definately . very funny.In fairness though we did end up finding a few guys with integrity ,over there eventually ,
but after dealing with issues and losses for around 30 months straight and having ongoing issues still it gives you a bit of a shift in thinking.Ive learnt thought that losses in business are the best lesson to take you to the next level in yr business and investing.I found it
takes away a bit of the cockiness, or i guess complacency, that can come after being very successful for a long period,in my experience anyway.It reminds you that its not as easy as you think ,its just youve got used to what you do and forgotten to appreciate yr abilities and being successful at it .
This is not in everyones case of course ,and some of what happened over there to many people was because of deception from people in the industry and some stretched truths to be honest ,
but even some of the agents/ sellers that were onselling /birddogging got caught out as well i know that for a fact .
Of course this doesnt excuse what some agents/sellers did, but it just reminds you that before you part with any money for a service ,or whatever ,you have got to be careful and check 2 or 3 times what the people are telling you and what they re being told first .
But there is also ,unfortunately ,many people out their (especially in the real estate industry) that are looking for quick profit before integrity so be careful.
So, unfortunately , sometimes it doesnt always prevent losses, even if you dotted every i and crossed every t thoroughly,This, i found is much more common when yr dealing into another country as it seems that ocean in the middle can give an idea that yr not close enough to follow up and check things,which is partly true.
delt i hope you didnt lose all yr funds man ,really feel for you , but dont feel bad as alot of people have given it a go from Oz to overseas and taken big losses and learnt even bigger lesons from it,even some of the local " Guru's"
all the best guys and gals !
Luke Taylor | Hope Property Investing
http://hopepropertyinvesting.com
Email MeProperty Support,Strategist and Buyers Agent
Guys
The secret is to do a lot of research and find great agents. I have found three, one in San Antonio where I worked for nearly a year, one in Indianapolis and one in Memphis. These are all great places to invest. I agree with world changer if you want to trade rather than just invest you do need to be on the ground.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Thanks for the replies. In general, pretty much along the lines of what I thought.(or feared for that matter). Seems like you need to be on the ground to stop things from potentially falling to pieces.
Although this is not a stock investing forum. I am just wondering whether or not there is a way to gain exposure to US Housing market values through stocks (when the time comes right obviously)? Most REIT's and real estate stocks tend to deal with commercial and Apartment complexes rather than single family dwellings obviously…
bender10 wrote:Although this is not a stock investing forum. I am just wondering whether or not there is a way to gain exposure to US Housing market values through stocks (when the time comes right obviously)? Most REIT's and real estate stocks tend to deal with commercial and Apartment complexes rather than single family dwellings obviously…The information that I have strongly suggests to sell anything US especially financial services and real estate it will change but not this decade a strong sell reccomendation also means dont buy.
If you are feeling adventurous and beleive thats the follwoing market forces apply:
1. Record-setting demand due largely from the rise of Asian economies;2. Supply problems that have become endemic in many natural resources; and.
3. Central banks that are determined to avoid deflation and depression by creating inflation.
Then have a look at these.
China Petroleum & Chemical (SNP): Asia's largest refiner by capacity, Sinopec is a petrol-octopus, with tentacles reaching into every facet of oil: From exploration and development to marketing, distribution, storage, trading and petrochemical production. Sinopec has around 3.3 billion barrels of crude oil along with almost 2.9 trillion cubic feet of natural gas. Sinopec is trading around $113 a share. That's more than double its 2006 low, but down about $65 — or 36% — from its recent high. The stock's P/E is just 10.73, and the company's five-year earnings per share growth has been better than 25%.
CNOOC Ltd. (CEO): Infamous for its attempt to purchase Unocal a few years back, CNOOC is another major Asian oil and gas player. Its share price is now trading at about $168, a deal when you consider this giant's 30% annual earnings growth and last year's high of more than $200 a share.
Santos Ltd. (STOSY): This major Australian oil and gas outfit has major presences in Indonesia, Papua New Guinea, Kyrgyzstan, and Egypt. Santos is trading at about $52, down from a recent high of $57. With a five-year earnings growth rate of better than 29%, it looks like a great opportunity anywhere under $50 a share.
Alumina Ltd. (AWC): Australia-based Alumina, as the name implies, is a big aluminum player, investing in bauxite mining, alumina refining, and some aluminum smelting operations. AWC is 60% owned by Alcoa. Alumina was a penny stock until November 2002 when it lifted off the launch pad. Now trading around $22, it's down about 30% from its recent $31 high.
POSCO (PKX): South Korea's Posco is one of the world's most profitable steelmakers. It produces 28 million tons of steel products per year, enough to manufacture 100,000 compact cars, and exports its steel products to more than 60 countries. Posco's stock is now trading at about $136, down from its record of $201. That's nearly a 33% drop.
Some say Posco's earnings will suffer since iron ore prices are headed much higher. That would increase the cost of producing steel. But Posco is probably going to be able to pass much of those cost increases on to the end user.Yanzhou Coal Mining Co. Ltd. (YZC): China's leading coal miner, with more than two billion tons of reserves, and production of more than 40 million tons a year. China is still some 80% dependent upon coal. Between the country's recent terrible winter storms, the worst in 54 years, and record high coal prices, YZC is in a great position. Its share price is currently trading at about $90, down from its peak of $116.73 last October.
Kubota Corp. (KUB). Japan's Kubota Corp. manufactures farm equipment, engines, pipe and fluid systems, industrial castings, environmental control plants, and housing materials and equipment. Kubota's share price is off about 50% since its record high of $60.60 last year.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
