My USA Property

Just wanted to throw my two cents into this as well – I really need to get out more on Saturdays, don’t I!

My first comment – I would NEVER rely on Zillow, and having invested here in the U.S. professionally (as the head of a real estate firm) I see how it is many times very inaccurate. Basically the algorithm it uses to calculate value is somewhat flawed. What happens is, say we’re looking for 111 Main St, Miami, FL. If that property, as well as 10 properties nearby have been foreclosed on, with a mortgage outstanding of $500K, Zillow calculates that as 10 sales x 500K on these 10 properties.
They are then sold as foreclosures for 75K each, which then creates 10x sales at 75K each.

Zillow then takes the median (it’s a lot more complicated than that, but it gives you an idea….) and bases it’s value on that.

As many on here pointed out, you need to check the county website, maybe get a local appraiser, and speak to local agents. It takes a while and requires effort, but it’s absolutely worth it – you wouldn’t wak up to a black jack table if the odds were stacked against you (I know, they are, but you get my point…) and bet even $500, so why would you be willing to bet 20-30K on something without knowing the deal?

I do agree that sometimes, it’s “fair” to have to pay for a service from a professional company. We don’t charge any fees upfront and neither do U.S. realtors, but maybe Australians work differently. I would always make sure to check previous sale prices as well as the experience of the “expert” – spending one or two weeks in the U.S. doesn’t neccesarily make you an expert.

My last point – I see some people promoting places like Kansas City and St Louis, and then rack down on places like Detroit, Cleveland and places like that. In my experience, and we’ve bought in all of them, the type of property delivering you a 15-18% net yield, will be of similar quality. Section 8 most likely, not usually a great area, but providing you with income. If you are looking for capital appreciation, there are MANY better places, and I’m not saying Detroit et al is the solution to everyone’s problem, but what I want to say is the Section 8 program is the most generous up in MI, thereby giving the best yields.
It is true that people are leaving Detroit, but it is a VERY local market as many local experts will tell you. Go into one neighborhood and it might be empty, and then drive 0.5 miles and it’s fine, with renters and owner occupiers in every home.

Is anybody else other than us investing heavily in Indianapolis? It’s got a fair share of problems too but there is a lot of Federal funds coming in because of Superbowl 2012 and there is a large number of “white collar” jobs coming to the city. I’d compare it to Kansas City in many ways, and net yields, in what we hold, is around 14%, with lower insurances and taxes than in many areas.

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Hi,
Just wanted to say that I would advise taking on board everything lawjs says here. He and his sister Emma have been invaluable over on Somerset. Some of the most knowlegeable Aussies on US property on the internet.
To 1eyeopen, congratulations on 'making the jump' at such a young age. The amount of people I have spoken to who are so interested to hear my experience and potential returns when it is tenanted but are just too scared to take a risk because it's overseas is incredible, so I applaud you. But I'm with lawjs in terms of where to buy, Vegas all the way! Sure, all signs point to the market downturning in the next two years even further than what it already is, but aren't you holding on to it for at least 10 years (when the market is forecast to start picking up)? Having said that, even if you want to flip it's still possible. After buying a bargain and spending $10k on renos (again, like lawjs said, it shouldn't cost more than that!) I could put mine on the market today and make a $20,000 profit but I'm in it for the long haul.
Oh, and to the person/spruiker who offered to 'help' me buy in the US who's comment has since been deleted, thanks, but no thanks. I already did it BY MYSELF. I'm not bragging, just hoping to encourage people to see that they do not need a so-called expert to dive into the US property market.
Cheers.

I am an investor that recently dealt with a company called Foreclosed American Homes. They are based in Perth (which is handy for me!), but they seemed very good. I hesitated for a long time, but eventually i went ahead with them on two properties in Atlanta about 6 months ago, and so far – touch wood – they have been excellent. No problems with the tenants, rent in the bank everymoth. I think they are a fairly new company, but i have recommended them to all my friends who were thinking about investing in the states.

Yes these companies make money, but it was a completely hassle-free process on my behalf. The other thing i liked was the transparency. You signed the offer & acceptance from the bank that owned them – so you knew exactly how much you paid for the properties. There was no additional fees that were not spelt out in our initial interview.

I am saving for more properties as we speak!

Rosa Tong wrote:

stefcop wrote:

1eyeopen wrote:

Yea I get what your saying thank you for your response I'm only 23 and just starting out in the real estate business so hearing feed back on other peoples experiences is really helpful. Especially successful peoples opinions like yours are hard to come by. Thats why I really liked the US Prime Property website. It seems they are a down to earth, helpful bunch of guys <moderator: delete language>. I just hope this memphis property goes well haha. Being my first investment and all

From what I hear on the grape vine the down to earth guys at US Prime are ex employees of my usa property who have branched out on their own and have now jumped on the band wagon to make a quick buck.

They could just be dissatisfied with their company… no dramas happens all the time… and problem jumping on the bandwagon… just as long as you don't leave it too late.

it doesn't matter to me that they are making money…otherwise they wouldn't do it for love… as long as i am making money… i don't care.

ABSOLUTELY RIGHT!!! The bottom line is – These companies should look after their clients very well and must have ethical values. Not only in US investments, we see companies with shining offices and big names, but with moral values. Without good intentions, nobody can deliver their promise.