This topic has been really informative – thanks to all for posting.
I sit somewhere between recognising the real opportunity that exists in the US and the reality of the on-the-ground work required.
To Vincent and other buyers agents it sounds like you are providing a well rounded service. But I have never invested with, or through, anyone (for example, a company with a CEO who is not personally invested in his stock) who cannot demonstrate personal commitment.
It's just that the predicated rents often appear to be bullish and yes anything over 20% return is amazing – surely too good to pass over yourself!!?
You may well be invested in your product, in which case I applaud you.
tonyy21692 wrote:Read this tread with a great deal of interest. And while reading it I have had a sense of seeing this all unfolding exactly the same 5 to 6 years ago on this and another property forum.Some of the old long time posters, who have been and done it in the US (they know who they are) have made some highly valuable comments in this thread but their message seems to have been missed in all the excitement.
So let me share some of my property investing insights into the USA with you.
An long time client of mine who was the CEO of a USA ship building company said to me, when you have business dealings in the US it is treated as a game. You are a player in that game and people will size you up quickly. If you are inexperienced you will be financially bled as quickly as possible.
This sounds dramatic but from my 6 years property investing in the US it is pretty on the mark. It applies to almost everyone you will come in contact with, from your buyer agent , property manager, attorney, the tenants, the welfare agencies, your mortgage broker (Richard excluded of course) , the guy who mows the grass / clears the snow from the sidewalk, your property neighbour, the power/gas company, your plumber, your electrician, your insurance broker, the local city inspector who fines you for having cracks in your driveway and right through to the city court judge who can turn a $75 fine into $7500 because the city / county is technically bankrupt and there is no downside what so ever to gouge a non resident foreign national……..
I guess the message is no matter how much Australian property investing experience you may have or thought you may have, it is a difference set of rules and culture when dealing in the US. So take care, pound the pavement yourself and dip your toe in carefully otherwise be prepared to have a 100% capital loss on your investment.Tony
Tony,
Thank you – valuable info. We have a very guarded view but now we are being even more cautious. We carry a cricket bat to most meetings with contractors here and now will be purchasing a baseball bat in the US for the same reason. The cricket and baseball bats are of course just metafors for our investing attitudes.
We play a very seriously in the Australian property market and do not intend to get taken for a ride in the US. I have taken all your warnings on board and we are off to live in the US for the next 2 years in order to protect our investments.
There is a huge opportunity over there and we are off to take advantage of it.
I agree that there is risk in the US market as in all property markets but we aim to mitigate this as yourself and other US investors have done and still do.
It sounds as though you have had a lot of trials and tribulations along the way with American property investments. It would be most fruitful to share this info on the issues you encountered and how you dealt with them. I am sure many people on this thread would appreciate the wealth of your and other seasoned US investors experiences.
Thanks again,
tonyy21692 wrote:Read this tread with a great deal of interest. And while reading it I have had a sense of seeing this all unfolding exactly the same 5 to 6 years ago on this and another property forum.Some of the old long time posters, who have been and done it in the US (they know who they are) have made some highly valuable comments in this thread but their message seems to have been missed in all the excitement.
So let me share some of my property investing insights into the USA with you.
An long time client of mine who was the CEO of a USA ship building company said to me, when you have business dealings in the US it is treated as a game. You are a player in that game and people will size you up quickly. If you are inexperienced you will be financially bled as quickly as possible.
This sounds dramatic but from my 6 years property investing in the US it is pretty on the mark. It applies to almost everyone you will come in contact with, from your buyer agent , property manager, attorney, the tenants, the welfare agencies, your mortgage broker (Richard excluded of course) , the guy who mows the grass / clears the snow from the sidewalk, your property neighbour, the power/gas company, your plumber, your electrician, your insurance broker, the local city inspector who fines you for having cracks in your driveway and right through to the city court judge who can turn a $75 fine into $7500 because the city / county is technically bankrupt and there is no downside what so ever to gouge a non resident foreign national……..
I guess the message is no matter how much Australian property investing experience you may have or thought you may have, it is a difference set of rules and culture when dealing in the US. So take care, pound the pavement yourself and dip your toe in carefully otherwise be prepared to have a 100% capital loss on your investment.Tony
Tony,
Thank you – valuable info. We have a very guarded view but now we are being even more cautious. We carry a cricket bat to most meetings with contractors here and now will be purchasing a baseball bat in the US for the same reason. The cricket and baseball bats are of course just metafors for our investing attitudes.
We play a very seriously in the Australian property market and do not intend to get taken for a ride in the US. I have taken all your warnings on board and we are off to live in the US for the next 2 years in order to protect our investments.
There is a huge opportunity over there and we are off to take advantage of it.
I agree that there is risk in the US market as in all property markets but we aim to mitigate this as yourself and other US investors have done and still do.
It sounds as though you have had a lot of trials and tribulations along the way with American property investments. It would be most fruitful to share this info on the issues you encountered and how you dealt with them. I am sure many people on this thread would appreciate the wealth of your and other seasoned US investors experiences.
Thanks again,
tonyy21692 wrote:If you are inexperienced you will be financially bled as quickly as possible.You hit the nail on the head. From someone who lived there for many years, I hope your post is widely read.
Dear Michael,
Wow what a journey you have I am so jealous and would love to join you but family and stuff will not allow.
I have a friend who has a massive business in L.A and I will be spending 8 weeks there this year looking around.
Please keep me posted and the very best of luck to you.
Philip Sigglekow author
LREA Qld, NSW Vic and WAWhy all of a sudden Australian investors are willing to buy properties in the US? Is US already done with the recession!
MiamiAmazing info on this forum for a prospective first time property investor.
I am ready to take first steps into the game but have no illusions as to how complicated it can all be.
I have done quite a bit of research into investing here in oz but understand this opportunity in USA is too good to pass up.
Would love to hear from you Michael about investing in the states.
Like the look of both Vincent & Nigels companies but being based in Victoria i am concerned the distance may make it all a little too hard.
Advice please!!!
My email: [email protected]Hey everyone,
I'm also very interested in buying positive cashflow property in the USA. Has anyone heard of House Buyers USA? How do you go about get finance for buying houses over there? Do you need to get a loan from an australian bank or is it possible to get it through an american bank? Thank you
Regards
Simon
No unfortunately no Australian Banking lender will advance monies secured on a property overseas.
Richard Taylor | Australia's leading private lender
I was reading this forum the other night and was quite inspired for a little bit however this discussion put a bit of a wet blanket on any of the ideas for a while
http://www.cbsnews.com/video/watch/?id=4668112n&tag=contentMain;contentBody
wanelad wrote:I was reading this forum the other night and was quite inspired for a little bit however this discussion put a bit of a wet blanket on any of the ideas for a whilehttp://www.cbsnews.com/video/watch/?id=4668112n&tag=contentMain;contentBody
Would you not think that this is only presenting a further opportunity? The houses prices are going to drop even further, – however the rental demand for housing is only going to get bigger. This is good news for an overseas investor!
The more the media talk the market down the more excited I get about buying there. Remember if you are buying for the long term and are careful with what you are doing you cannot go wrong. It is always about doing the research.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
wanelad wrote:I was reading this forum the other night and was quite inspired for a little bit however this discussion put a bit of a wet blanket on any of the ideas for a whilehttp://www.cbsnews.com/video/watch/?id=4668112n&tag=contentMain;contentBody
That article is form Dec 2008 so it was pretty accurate for 2009. It would be interesting to see the graph of defaults to now – to see whether it has peaked.
Hi Michael
Being on the ground for 2 years is a big commitment and will put you miles in front. You ought to be able to build a network of people who you can trust in that time then manage them remotely. Listen to the locals and take care in some neighbourhoods.
good luck.
tony
Hi Michael,
Am new to this web site, but saw your comments and will be keeping an eye on your blogs. With a great name like Michael Collins how could I not support you. When will you be investing in Ireland? Will definatly be on board then.
Good luck in the US.
Cheers.Hi – i have been researching the pro's and con's of investing in the USA for the last 8 months or so and have a couple of areas in the USA that i particularly like.
I have been very interested to read all of Michaels posts, enough that i sent him an email as per the request in his blog etc…
Michael i know you are busy over in the USA making money, but do you reply to your emails? hehe
Chris
Why not post the question here and get other members answers.
Members like Nigel K have been involved in the US for about 5 years so can offer some expertise.
I purchased my first home in the US in 1989 and still own the property.
Richard Taylor | Australia's leading private lender
Hi Richard
Ok firstly i have been reading these forums for at least 8 months, but have remained silent (listening and learning)
Nothing new from me except to say that i think there is money to be made in the USA, but apart from the small hurdles involving the paperwork, taxation and finance…(sic) i think that the biggest problem i/we will face is the "tyranny of distance". i.e. that the solution to every small problem is 20,000 klm away
So when your letting agent emails to advise that "x" needs fixing, does it really need fixing or are you being scammed?
Assuming their is actually a real repair required, Is the repair quote padded to the point of criminality?
Is the house actually empty or is the agent pocketing the rent?
etcSo, my question is basically – how do you get around this tyranny of distance?
I am more than prepared to fly to the USA to look at my potential property, to go through the time and effort to renovate (with tradesmen etc) the property and appoint an agent to find me some tenants.. but after that, what happens?That my friend is my question (and coincidentally the question from all my friends who are also considering investing there)
<br /
:)” title=”>:)” class=”bbcode_smiley” />(by the way, having said all of the above, Richard i would love to hear more of your experience in this matter in a more detailed way if you were so inclined – please feel free to contact me on 0411 457 977 or via my email)
thanks
Chris
Seems to be the same issue every US investor suffers the problem of good property management.
I was lucky enough to buy a beachside property in San Juan Capistrano in 1989 next to my Auntie who had lived in the suburb for 20 years and still does. Initially for the first 12 or so years we rented the house out to the same person and of course management was not an issue having a relative live next door.
Over the last 8 years we have had a couple of tenants come and go but not had a problem. In saying this of course the house is fairly substantial and the rent is a bit above the average.
Havent ever purchased outside CA but have financed clients in dozens of States since then. At present we concentrate on Florida as many Brits still purchase holiday and second homes there and financing there deals is fairly straight forward.
Some like Nigel might want to comment on property management in Tx as i certainly dont have any property management contacts there.
Richard Taylor | Australia's leading private lender
Chris, while I havent bought property in USA yet (going over in April), I've been researching heavily and seeking advice on Aussie, American and European property investment forums.
The problem of being ripped off by property managers is really common and it seems that the only way to effectively control them is through the legal agreement written or reviewed by an American lawyer. Basically you need to become a "hard-ass", as they would say, and play the game their way. It might cost a bit in lawyer fees, but since property is being bought at $15-$50K, what's a few extra thousand to protect yourself?
For example, a clause stating that the p/mgr will sign a suitable tenant within 2 mths or they are fired with all fees refunded, would be a way to avoid them pocketing the rent and telling you that the property is vacant.
A clause stating that the p/mgr will email a digital photo of damage requiring repair and a digital scan of the tradesperson/s quote for any repair over $1000, would be a way of avoiding bogus repair charges. You would also want to get the tradesperson's phone number so that you can check that the work has been done.
The key seems to be the threat of being sued. The honest ones will sign an agreement with those clauses, the dirty ones wont.
:)” title=”>:)” class=”bbcode_smiley” />
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