- Alex SC wrote:worldinvestor wrote:Jay
forget the $850-900 rental returns, that is why I really like the big homes at the right price, I am achieving from $1000-1300 (8 properties) so far. I certainly care about 20% gross yields, plenty of fat in the deal to mitigate any slippage and that is the point.Personally I don't need someone holding my hand, I appreciate different strokes for different folks.
I want maximum return and when I offload the properties I want to keep ALL the profits as at the end of the day it is my money, my risk regardless of the model.
It is important not to assume that every OZ investor is buying blind, sure there will be those that will muddle and achieve very little, but I am also in contact with some savy investors who research and spend lots of time analysing data and organising correct structures to reduce tax etc. not every investor is tarred with the same brush.
OK, I will clarify, first trip to Atlanta was to view the area and I would recommend any forgein investor to do this, second trip was to view properties, not a necessity however a great opportunity to get away with husband and a spot of shopping at Lenox Mall which I will highly recommend.
I can not see the need to go back for quite some time, no point when you have a team doing all the work. Emails, skype etc is fine, many businesses today operate/survive using this technology.
Cheers, WI
WI
This was a good read and good points. There are alot of ways to be involved in real estate. Saying one system is better then the other . Looks like you are doing just fine. To be honest wish you found Charlotte before Atlanta . The homes and the way you have handled things are the type of clients we like to see come in. While things were down in real estate you really had to go with all clients. Now we are at the point where we can pick and choose who we deal with.Glad things are working out for you in Atlanta. Keep us updated on your trip.I keep saying I am coming to Australia but we got so busy. With the democratic National convention in Charlotte in Sept. I am hoping my wife can get off during that time so we can both do 12 days in Australia.
Talk soon
PS love Skype I am always one there
Hi Alex
Good to hear that you are doing very well. All the hard work will pay off am sure.I agree with you in the main TRR have purchased some great deals for their clients.
Charlotte is interesting from what I have researched, I am yield focused and that is what has driven me to Atlanta and that is also why I am now not purchasing as I mentioned in another post the jump in property prices.
Atlanta is just so hot at the moment.
Cheers, WI
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Hi Alex
Good to hear that you are doing very well. All the hard work will pay off am sure. Real estate is a tough business any of the USA teams that have made it through the last few years .They have learned quickly to adapt to the new real estate. I have seen alot of my good friends local investors ( one buddy last 50 houses ) lose everything. My uncle in Greenville SC was building town homes priced from $750k to $1.5m. His whole project went under, along with both his homes. Hard money lenders who were lending and were being used by most USA investors .Now those companies are no longer in business. ( again sorry Jay might piss you off here. ) I blame it on the hard money companies they looked at what they could lend clients money out for and returns they could get. It became a free for all nobody had a check and balances sheet.(GREED )There is money to be made in real estate but there was also heavy losses on both side( USA and International investors ). Good lessons should and can be learned from all this. Both the USA and International buyers should be paying attention to some of these lessons . Two things that should be a main concern is greed ( this was the down fall to many USA investors and lenders ( lets be honest ) and over inflated numbers to justify making the deals work.
Alot of words to say yes hard work does pay off but keeping things simple like you are doing is and should be applauded. I am sure you will have some head aches with your properties along the way it is normal. I would add in there a reserve fund for each property I like it to be $3-5k .I also like to take 1 months rent from all our properties and put this back. This is basically rainy day fund( help to sleep better at night fund)
I agree with you in the main TRR have purchased some great deals for their clients. Just saw their newest deal sales price $80k and rehab $18k Looks like Charlotte prices slowly making sense ( LOL )Charlotte is interesting from what I have researched, I am yield focused and that is what has driven me to Atlanta and that is also why I am now not purchasing as I mentioned in another post the jump in property prices. Trust me Atlanta is a great market I loved the numbers that is why we jumped down their guns blazing buying everything in site. Then we got ( GREEDY and went against my own advice ) Had to pull back and refocus and just be in Charlotte . What I like is all the major USA resellers are coming to one place to get properties in Charlotte so that says some thing for Charlotte and our team here.
Atlanta is just so hot at the moment. Atlanta is hot 80 degrees today again just some humor .I can not argue with any one Atlanta had some of the best deals . What most have not mentioned is Georgia was one of the biggest states for mortgage fraud in the USA. Atlanta was ranked number one in the USA for mortgage fraud at one point. That is why I think we are seeing the deals their compared to other states. ( just guessing now )
Cheers, WI
Thanks
Alex
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dan luchmaya wrote:You would be better off buying already tenanted homes from other companies. The property that I purchased fro0m TRR settled in July and reno completed 2 months ago and still no tenant. TRR finally came back to me and said that I needed to do some more reno works to attract a tenant.
What a dud!!!Not defending TRR. What I am saying is that as a wholesaler, this is the problem with real estate. I have homes on our website that are rented and some not rented. The problem is you can never guarantee anything. I have had some homes rent quickly when others took months. The renter in the USA if you can ever figure out who and why, man you would be rich.
There are going to be investors that want homes vacant so they can help with the process. There are people like me that say only buy rented deals. So everyone will have their opinion.
Which leads me to the guarantees that I am seeing BY USA companies ( Complete Crap ). How can one guarantee anything in life?
The USA companies and resellers raise the price so high that they can squeeze one or two years of rent into that. Great, but what happens in year 3 .So please take this into consideration when some one comes selling that shiny new home on a silver platter with all the trimming. Now on the other hand, do understand when you buy an investment home, it is just that. An investment home. Things do go wrong. Again, this is where planning and preparation come into play.
Reserve funds, due diligence , getting out there and meeting the teams, seeing the homes. This will not solve all the headaches but it is a start.
Now back to Atlanta (THE MARKET IS FLOODED WITH FORECLOSURES ) this is going to be harder to rent without making your house stand out. I can see TRR what they are saying. I am sure your house was brought to similar rehab status as other near by homes. For us we just recently starting adding in tile instead of carpet because it seems to help. So this is where we are adding more funds in to make the houses rent. Anything to stand above the other homes. Which this is going to be a problem in Atlanta for a bit since the whole damn place is foreclosing. Charlotte doesn't have the foreclosure back log, but I see it coming . Just spent this past Mon -Weds driving around looking at homes and seeing the stickers start to go up in windows. I can tell the flood is slowly building of homes .
Which is good for the buying side, but makes the rental side harder and harder to fill all the properties. Yes, you can go with all the stats that people are sending about people moving to different states. Listen, I live here and really? Come on, it still won't help.
The rental house and demand for renters at some point will flop and there will be more homes than renters. Then WHAT ?
hey guys
Just found this forum regarding us real estate investment and thought i would share my experience because when
i started investing in us real estate in 2010 i couldn’t find resources like this in my research.Anyway i have bought 8 properties now in the USA, 3 are what i consider successes and 2 are ok, 3 were utter disasters.
Ironically the 3 disasters were all bought on a trip to Florida in 2010, since then my luck has changed or rather
i have learnt what to avoid and where to go. In 2008-2010 i was in the states a lot on business so the idea
of buying foreclosed property appealed to me, hence i made the plunge having already had great returns
from buying overseas with investments in Bulgaria and Romania in 2006 before they joined the EU.So anyway i now focus on the USA and particularly states that are showing strong signs of recovery,
hence when i came across a Brisbane firm called USA Foreclosures, i started to look closer at Michigan
as USA forec said it was really starting to buzz. The problem was i had just seen a doco on Detroit
and it said the vacancy rates were huge in the city, so i was initially skeptical but apparently the outer
suburbs, 45 minutes away had a weird thing going on, basically employment with the big firms there
was really cranking up but the foreclosure rate was still growing.I also have not seen any other aussie firm offering to underwrite returns which this firm does, ie guarantees
15% gross(not net so don’t get too excited) so that overcame my worry about vacancy rates and to be honest
so far so good,i am grossing 21% and netting about 14% on a 58k investment, it is in a small suburb called
Redford.The other previous successes were with another firm based in the USA and whilst they did a great job
in sourcing the right property that would rent, they were painful to deal with, i would rarely get my monthly
statements on time and there would be way more repairs going on than i would expect, yet it still made me
an average of 16% pa and i sold one of them for a net profit of 63%.Anyway would love to hear about any other underwritten guarantees available out there or any other hotspots
that people are seeing a similar picture to Michigan as i think this is the key now.Michael
How would you say your overall portfolio perfromed when you factor in your 3 not so good ones?
And curious about what you mean with underwritten gurantees… No gurantees in the US unless your buying registered securites that yeild less than 5%… i fyou talking rental Guarantees then you will see these guys getting their hands slapped,
As well as anyone that does this kind of rental Gurantee has to have such a huge mark up to account for the day to day reality.
check with Alex on this one….. I am sure in the first year or so these guys will make then the next threads are going to be Titled
WHAT DO I DO WHEN MY RENTAL GUARANTEE COMPANY STOPS PAYING ME . COM
Thanks for the feedback and the honesty about not all your props doing well and that some of yours are doing great…
JLh
Buying tenanted property is a good option but always try to find out how long the tenant has been in the property. I’ve seem many times a tenant placement company will put someone in right before the property is sold so there is no track record of payments to look at.
If possible have someone go out and evaluate the property, Ideally when the tenant is there and then they can ask if the tenant is happy, are there any problems with the property, how long they have been there and so on… This is something I do for my clients all the time and its very helpful information.
Jay,
What Michael Osbourne referred to was about Guaranteed Returns, which of course involve as the main source of income the RENT. Of course it is ILLEGAL to guarantee rent ! When you deal with somebody who doesn't know about the legal aspect of guaranteed securities you should RUN !!! JAY, please can you find a link to the legal law article which refers to this matter; it should be clear once for all for everybody in this forum the importance of this aspect. If somebody misunderstands it or doesn't know the importance of it he/she can be sent immediately to this link.I was thinking also that you, Alex, Emma 171, WI, eventually I and the other serious investors frequenting this forum to start putting together something like a step-by-step course for the OZ and other overseas guys willing to invest in the US, so they can avoid at least unfortunate experiences like those ones which happened to Richard (AKA Gavin). The information overload is huge and for a newbie will be a nightmare to dissect the correct info from all the posts. We can eventually particularize with respect to certain areas/cities. What do you think and what are the opinions of the others? Are you up to the challenge?
Michael Osbourne,
Would you contact me, please?
Mihovi,
Guranteed returns are selling a security anything guranteed is such in the US… just ask any attorney,, very cut and dry.
a bunch of the guys in the states have already been shut down from that practice… there is no gurantee unless you do a full blown securities offering have it underwritten by an investment bank and register it in the states you are offering the investment.
the reason being and Alex and others Cheeves as well have brought this up what is the gurantee worth…. How strong are the Gurantors??? who may have sold numerous properties,, what is there financial strength if the properties go pear shaped.
What this does in my mind is induce's again a Nieve Foriegner into investing into a very Risky rental market… If you have great homes in good markets guarantees are not necessary.
JLH
Mihovi,
I think most of the readers of this forum have heard about all I know about what to look out for and my personal opinions on investing in the US whether anyone agrees or not its just my personal experience and opinions that I share.
Greed factor as it relates to yields is a big issue I see with Aussies.. they want and expect some pretty large numbers that while achievable in instances are not the norm over the mean.
And I think we see that coming out in some of the post that tell both sides,,, for every Richard Davis that posts or the young lady with the Pheniox debacle… there are literally hundreds out there that have or will walk away from their US cash flow 30% turnkey collect your money in your arm chair watching TV investment of a life time
Then there are those that really work at it and are doing well,,, Although I would guess after a 5 year run that most will net if they figure in ALL expenses travel LLC’s etc just like you would for any business.. their returns will be under 10% net with very many of them negative geared and or very small returns.
I know this for a fact… We run a very very tight ship,, buy at the best prices rehab for less than anyone hiring a contractor.. And we produce a realistic 9% and we reach that for the investor by all these metrics and we do not have to pay any property management.
So based on history not in blue sky best case scenarios this is were we land and were we can be comfortable. Its Risk vs return… Risk is hugely mitigated to next to nothing and return is above average plus equity…
I will venture to guess our model will out perform at least 80 to 90% of the people that go it on their own from out of country over a 5 year time span… But hey in 5 years we can all compare notes. At least that’s the feedback we get from our US investors virtaully all of them have tried turn key on their own and have come to us for safe consistent cash flow…
Most investors in the US have no clue as to how much they really make on their rentals, US investors by and large are not nearly as detailed as what I see in the Aussie, another words they would never describe a yield as 12.54%… They would say we are making around 12 or so…
Even the big hedge fund players coming into the market right now,,, talk about 7 to 8% nets. and these are Harvard educated multi billion dollar players that have fully analyzed the market,,, How some johnny come lately turn key resller wholesaler can post a flyer on the web and claim double those figures is just again wishful thinking and those that are more greedy or risk adverse or nieve chase those deals.
JLH
mihovi wrote:Jay,
What Michael Osbourne referred to was about Guaranteed Returns, which of course involve as the main source of income the RENT. Of course it is ILLEGAL to guarantee rent ! When you deal with somebody who doesn't know about the legal aspect of guaranteed securities you should RUN !!! JAY, please can you find a link to the legal law article which refers to this matter; it should be clear once for all for everybody in this forum the importance of this aspect. If somebody misunderstands it or doesn't know the importance of it he/she can be sent immediately to this link.I was thinking also that you, Alex, Emma 171, WI, eventually I and the other serious investors frequenting this forum to start putting together something like a step-by-step course for the OZ and other overseas guys willing to invest in the US, so they can avoid at least unfortunate experiences like those ones which happened to Richard (AKA Gavin). The information overload is huge and for a newbie will be a nightmare to dissect the correct info from all the posts. We can eventually particularize with respect to certain areas/cities. What do you think and what are the opinions of the others? Are you up to the challenge?
Cheeves ( Scott )already spoke about this. The would be a great solution if we could all work it out.
jayhinrichs wrote:Mihovi,
Guranteed returns are selling a security anything guranteed is such in the US… just ask any attorney,, very cut and dry.
a bunch of the guys in the states have already been shut down from that practice… there is no gurantee unless you do a full blown securities offering have it underwritten by an investment bank and register it in the states you are offering the investment.
the reason being and Alex and others Cheeves as well have brought this up what is the gurantee worth…. How strong are the Gurantors??? who may have sold numerous properties,, what is there financial strength if the properties go pear shaped.
What this does in my mind is induce's again a Nieve Foriegner into investing into a very Risky rental market… If you have great homes in good markets guarantees are not necessary.
JLH
Most of the USA Groups the have rental Guarantees are the same ones who raise the price $20k over. Then have 2 years worth of rents. So again when it looks and smells to good to be true.
For me it's a typical investment issue : the higher the risk-the higher the return (in case you get there). With nice houses in good locations can you get the same rate as the ones in the hood? I doubt it. You'll have more safety, that's true, but most of the OZ are looking for a rapid recovery of their money, from what I see on this forum, and are forgetting about the safe factor. It can be safe, it can be not, everything depends on WHO do you employ to handle your money, and that's the MAJOR factor in my opinion., even if it's on a long or a short run.
Alex SC wrote:Cheeves ( Scott )already spoke about this. The would be a great solution if we could all work it out.Let's get together and plan some for the start
You can create your own USA power pack from a USA providers stand point…
Most likely will mirror the products that are already offered
As I have never seen or read the power pack, I am sure there would be good info that the USA guys could provide that puts some different perspective on investing here in the states.
Have not seen Cheeves post in a while he is probably busy making money right now:)
Although what I tell my clients is this:
These investments are not complicated,,, really basic buy a house rent it out,
What is not basic is choosing your location,,, your PM etc etc.
And the Risk Reward metrix thats the huge one in my mind.
If Ozzies were investing like the Chinese do here in the states for brake even or 1 to 3% net returns… YOu would not have any of these negative stories and or they would be highly minimized.
The Ozzies would be buying much better properties that are more akin to what they buy and own in OZ…
And in the right markets brake even is OK because some of these markets on the rebound will see some pretty impressive capital growth 5 years down the track.
What is the crystal ball in OZ where are values… Have they peaked or is it still good to be neg. geared and go for appreciation???
JLH
jayhinrichs wrote:Even the big hedge fund players coming into the market right now,,, talk about 7 to 8% nets. and these are Harvard educated multi billion dollar players that have fully analyzed the market,,, How some johnny come lately turn key resller wholesaler can post a flyer on the web and claim double those figures is just again wishful thinking and those that are more greedy or risk adverse or nieve chase those deals. JLHMan, these funds are the guys who were the other half that caused the crisis. The banks are only half of the story. [Unfortunately, all the high finance guys were the ones who made the musical chairs. Charged everyone big bucks to dance around and they didn't have to participate whilst watching from their yachts.]
At 7% and their robbery 2/20 rates…I am asking myself, just who is thesuckerbig backer feeding them with all that capital?Javidan,
I look at it just like the stock market.
YOu had all the brokers making money as our market went to 15k… then as everyone panic sold it down to 6k the brokers made fee;s selling.
Then the smart money jumped in at 6k and rode it back up to were its at now basically 12k… Brokers made it on all sides going up and down.
There are plenty of funds that got wiped out
Now they are retooling and buying back at the bottom is how I see it..
The question will become can they manage these stand alone assets in bulk… thats the question.
JLH
jayhinrichs wrote:Javidan, I look at it just like the stock market. YOu had all the brokers making money as our market went to 15k… then as everyone panic sold it down to 6k the brokers made fee;s selling. Then the smart money jumped in at 6k and rode it back up to were its at now basically 12k… Brokers made it on all sides going up and down. There are plenty of funds that got wiped out Now they are retooling and buying back at the bottom is how I see it.. The question will become can they manage these stand alone assets in bulk… thats the question. JLHJay big funds and bulk purchases , we both know that buying , fixing , rehabbing ,renting takes solid teams . I think the big money funds even if they do buy. Will be setting them selves up for failure with out having all the pieces of the puzzle in place.
Hi
I bought a house in Atlanta in April 2012 ,through Vincent Selleck at 888 US Real Estate, todate I have not recived any money & still have an outstanding a/c of -$ 1950-00 to pay.
Vincent told me he was a very good operator he had the best properitys &,properity managers,etc etc, But Corey Fuller from Fortisgloballc was the builder & properity manager & he carried out the renovation to the house which he used a lot of old second hand materials & fittings, todate he has not paid me any rent & I have a house which needed attention, I paid Vincent around $3,988-00 as my agent,my last comversation with him was I was not the only one to get court with Corey there were many others, he advise me to transfere my properity to key property management, which i did only to find they charge me $1950-00 for some repair I don't know any thing about , I have asked them for a copy of the invoice but still have not recived one I do belive that the only way to buy propertys in the US is to take a trip over to the US & see what your buying & pick your own property management which you will save Vincent fee & also buy the property at lower price if i had done this it would have save me around $13,000-00 after paying for my trip
Unfortunately you can not believe anyone, there have been a few negative posts regarding various companies selling US properties. Not all companies are bad, however it is a matter of doing your own research to establish whether you are actually getting a good deal or not.
I assume you signed a contract with Key Property management, you need to check this and find out whether you will be charged additional costs if you take your business elsewhere, also find out what you have given them authority to pay on your behalf etc.
All the best
WI
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