I've been reading this thread with interest, we have just purchased some property in the US and agree that Due Diligance is the key. If you can get over there and see the market for yourself, you'll feel a lot more comfortable with your investments. There are many buyers agents, investment companies and flippers, but make sure you use someone that is on the ground and/or spends a lot of time there.
It is also important to feel comfortable with the team that are looking after these properties for you (eg property managers, rehab team, accountants, bank managers etc) so you have the full support once you're back in Australia.
After much research we used Cash Flow Gold who specialise in the Michigan market. There has been some negative media about Michigan, but if you select carefully and in the right areas (they are very selective about this), there are some great deals to be done. Personally, we liked what we saw. They don't do a lot of marketing but specialise in doing property tours where you buy direct and are very transparent about this. They have a top team set up, so the network support is in place. Do yourself a favour and get on one of the tours and find out yourself.
I think it is too good an opportunity to sit back and do nothing.
Cheers,
remeIt is with great interest that I'm reading this thread. I can definitely appreciate the attraction of cash flow, but given the state of the market, capital gains with a medium to long term view seems a more sensible option.
If it's too good to be true, it probably is.
Now full disclosure, I work in New York real estate and feel that if you are willing and able, you can make a great return on your investment here. I work with a team of lenders and legal advisors to structure investments for foreign nationals. It's not as difficult as you would think. You can finance up to 65%, but that doesn't come for free. Lenders expect a 'relationship', and there will be management fees and legal fees associated with establishing your presence here.
I feel it's all pretty simple. Since 2007 property values in NYC have fallen, on average mind you, by around 30% give or take. Over the past year they have risen by between 7 and 14%, depending on your source. Prices in Soho have risen by 27%! Inventory is down, as is the vacancy rate in rentals. The view here is that the market is not necessarily rising, but it has stabilised. Lending is tight, but gradually easing. Property developers are once again eyeing vacant lots and seriously looking at jump-starting stalled projects. One in ten private sector jobs have been created here.
I feel like the metrics are beginning to pile up – and that's not to take anything away from the rest of the country. As a foreigner, I can connect you to lenders for a 30 year fixed, with 65% loan to value for 5.125% – obviously these are not constant.
Take a look down the road. Open your eyes. What do you see?
You should definitely look before you leap. But one you've decided, action is the obvious next step.
Bestof luck with the adventure, and feel free to give me a yell.
Rob
[email protected]British Buyer wrote:I liked the title of this topic, so I figure I may as well add my two cents worth of input.
I know nothing about World Changer, but what he wrote in the opening post is spot on. I only hope that he isn't anything like many of the subsequent posters, who are clearly trying to drum up support for their own business concerns.
It is rather ironic that in a thread intended to warn people against their desire to believe all they hear (namely that it's possible to make 20% annual rental returns), a number of agents trying to sell you just such a "product" would post self-promoting propoganda.
Here's my take on the US market at present:
1. It's a once in a lifetime opportunity. It's the biggest property balls-up since the Great Depression. In the last decade property has rocketed in every country I can think of (except a few in Africa, although even there there are some amazing success stories). Yet in the same time-frame, the US managed to lead the world up then fizzle all the way back down, luckily without sucking the rest of the world into the abyss. Mark my words, we will NEVER again see US$50,000 houses in well-known US cities in our lifetimes!
2. Everyone using this website is way too obsessed about making a decent rental return. In my property investing experience, the real money is made when the price doubles (or preferably triples). People who should be worrying about rental returns are aged 50 and above, and are looking for a way to finance their retirement. If you're young and have the balls, go for the property appreciation rather than the rental return. Heck, if you're young you'll soon get bored with renting the place out, and as soon as you see the price inflate you'll want to flip it so as to cash out your profits and BUY MORE.
3. I have no wish to pick any fights with any person using this site who has had what it takes to go to the States and set up "people on the ground" as you Aussies all like to state. They are courageous, and they deserve respect and profits. However, here's my only advice to them:
Believe in your service. Become more professional. Dont' hide anything. State everything clearly, including whatever problems you've encountered, and how much you're making. You're assisting all those people stuck in their jobs back home who'd never be able to buy a property without you. So be proud, be open, and be honest. And don't waste your time in pointless bickering or negative posts on the internet. I reckon there is at best 2 years left of buying Short Sales and REO's. TIme is of the essence.
4. In conclusion: just buy something in the US without procrastinating so much that you never get round to doing it. If you can go over yourself and buy yourself, do so. And don't worry so much about the rental returns. If you do end up getting more than 10%, that's great. If you are barely able to pay your monthly property taxes and HOA fees (if it's a condo) even after renting it out, so be it. Because nobody knows which horse will win the race at this point: the property in Detroit with good rental returns but questionable future, or the one in New York which already costs an arm and a leg, doesn't earn you much rent, yet may well double due to its location. But if you can't go over yourself, then enlist the help of one of those recently-opened "teams on the ground", so long as you feel that they're exhibiting sufficient integrity.
Over and out
Steve from China
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