Hi Lenny, Zita, and others,
I’m also in that situation, with a USA investment trip planned for early in the new year.
I feel very indebted to British Buyer for his generosity with information.
This thread has obviously run a bit cold with his absence (hopefully only temporary), but after the festive season has quietened down a bit, perhaps we all can rekindle it with some new enthusiasm.Cheers, TH
Hello All,
Yes I have to agree, we are all missing BB. This thread thirved on BB's amazing input, updates and for forsight! Now that the Festive season and Ne Years Celebrations have passed its certainly good time to get back on with the show. For those heading over to the US, a few things I have been looking into and can recommend is an alternative to a Bank Account which we will be using is the “Travel Cards” that most major banks offer. I will be going with the CBA travel Cards as I bank with CBA. You can lock down up to $25,000K on the one card. The money is already in the currency to which you will be travelling so fees are greatly reduced. You are supplied with two cards just in case one goes missing. You can BPay extra funds onto it as you need it. There are many benefits and a few negatives but all in all a better option to carrying cash. I’m looking into Bus tours at the moment, this seems to be the best option to learn the suburbs and to get a better understanding of Miami.
Any suggestions on accommodation would be appreciated? We will be staying over 2 weeks and would like to keep accommodation costs low, unfortunately with this, the lower your budget the dodgier the hotel. We want somewhere reasonably nice and local, but not at high cost? Is this achievable?
Thanks and be in touch,
Zita, There are lots of opportunities accomodation wise once on the ground but can only suggest you search and search again on the net and then perhaps once there you can find something cheaper. Just the other day I past a Motel offering $194 per week accomodation. Went in to check as a friend is needing a place and the offer was for a minimum of 4 weeks stay which fitted my friend perfectly. This is not in Miami unfortunately. Take a look at Holiday Inn and Best Western as they often have deals. You can also write and ask for a special price.
British Buyer wrote:JacM wrote:Awesome – thanks British Buyer. Who is this agent you speak of?Hi JacM
send me a private message, and I'll send you the name. I don't think it's appropriate to recommend someone on an open forum whom I haven't dealt with for very long.
Also, I'm happy to give some pointers in terms of suburbs if you're thinking of Miami, although remember I've only been here 5 days
cheers
SteveHI Steve
Thank you so much for sharing your much valuable information. We are very new to overseas market, just have a little experience in investing in Australia. We plan to come to US (Miami) in next few months to do market reseach. It would be much appreciated if you could advise the name of the real estate agent that you are dealing with. It would help us to save a lot of time/effort to choose a realiable one among many unknown.
My email address is [email protected]
Many thanks for your help.Regards
Lee
I support all the favourable comments made above regarding Steve's posts on Miami. They have been brilliant. The question is, where has he gone?
Come on British Buyer…tell us what you're thinking.
We want you back!Fishface
Hi everyone
I haven't written for ages, because I've been back in China getting ready for my return to Miami. I left Miami on Nov 25, and am returning on Jan 24, this time with my wife, son (a toddler) and daughter (6-month old baby). It's going to be a handful, especially as here in China we are spoiled with good 24-hour a day help, whereas in Miami we'll be squashed into some little apartment somewhere (haven't even decided where we'll be staying yet) and will have to raise our kids ourselves!!!
We will be there for 3 months in total.
Although I've been out of the US for so long, I've still been following the Miami market. It's been very easy to do so, because I made sure I got realtors there to set me up with daily automatic updates from their MLS system. So even while I've been sitting on the beach in Hainan I've been able to keep tabs on what's going on, but I have to tell you I'm not sure whether the time has come to dive in 100%.
This is unfortunate because I've been busy selling Chinese properties these past 2 months, and have now raised enough money to buy so many Single Family Homes that there's no way this 3 month trip will be long enough to spend all the money.
As an aside: It's been very easy selling Chinese properties because the market here is red hot. In fact, after selling 2 I realised it's better to wait a while before selling any more. When buyers are begging you to sell it's surely a sign that prices will still rise further.
There's only one thing that makes property investors in China a little nervous about 2011, and that is what kind of new dampening measures the government will be bringing out this year. They've promised many, ranging from interest rate increases, to much higher downpayments (they're already at 50%) to property taxes (as yet unheard of in China).
Anyway, back to US property. I've watched the Case-SHiller numbers closely, as well as the wise words of many analysts, and I'm of the opinion that prices will bottom towards the end of the year, and stay low at least through 2012. Also, my own experience (watching specific houses that were put on the market in Nov. last year, and that have been marked down each month since then, with not a buyer in sight) tells me there is a lot more downside coming.
In a subsequent post I will quote from some much more experienced people than myself, and you guys can all make your own decisions.
As yet, I have not bought any properties in Miami. I found some listing agents who were crooked enough to let me know what to bid to seal the deal, but even then (or perhaps as a result of knowing how little interest there was in these properties) I held back.
So what am I going to do this time? Well, take it as it comes, I guess. But at the very least I'll buy one property for my family to use as a vacation home, and also so that I've started building up credit history. I've been watching specific areas for long enough now that I think I have a sense of what a good bargain is, so I shall bid (but quite low) on any nice homes I see that are being sold by banks that aren't being overly greedy in their pricing. If I only land one fish, then so be it. I'll just wait another 6 months to start spending the cash I've collected. But on the other hand, if I sense that the competition has run for cover and that I'm able to pick up great deals, then I may soon be the owner of a dozen or more homes.
Of course, a lot also depends on what's happening with the foreclosure moratorium. While I was there, all the banks were pulling their REO's off the market to check the paperwork. In addition, they stopped foreclosing on homes of people in default. So this could also mean that there's not going to be a large supply of REO's out there in the first quarter.
On the other hand, perhaps they'll "dump" all those REO's that they held back between Octover and December, so maybe there'll be a glut. Time will tell…
THIS IS FROM ZILLOW (ONE OF THE TOP US PROPERTY SITES) written 20 December
It’s a testament to the strangeness of the current housing market that there is such a wide diversity of opinion as to what 2011 will hold for real estate. Typically, housing appreciation floats in the range of 2-5% per year, but currently you’ll find those who believe we’re at the bottom in terms of national home values (Jim Cramer says maybe or maybe not), that next year will see an 8-10% increase in home values (John Paulson in May of this year), or that we’ll see a 20% decline in home values over the next two years (Gary Shilling).
Zillow believes that we’ll see bottom in national home values in Q2 or Q3 of 2011 (more likely the latter), that home values will fall another 5-7% nationally (in the Zillow Home Value Index) between now and then, and that we’ll experience a very long, protracted bottom before home value appreciation returns to historically normal rates. During that protracted bottom, which may last more than three years after the sustained declines in home values have stopped, home value appreciation will be lucky to keep pace with inflation (i.e., real home values may decline even though nominal home values increase by 1-2% per year). Our reasons for this forecast are spelled out in more detail in our most recent monthly data update, but a quick summary is: 1) high supply of existing home inventory on the for-sale market; 2) high supply of vacant homes; 3) high supply of shadow inventory (and more being added all the time courtesy of continuing high delinquency rates); 4) high rates of negative equity (which will spur more foreclosures); and 5) elevated unemployment rates (which will also spur foreclosures but will also reduce demand itself).
Zillow is far from alone in predicting further declines in home values. For example, the following are just a few recent market forecasts:
- On December 8, Morgan Stanley analysts released a report in which they indicated that they expect home prices in the U.S. to fall as much as 11 percent by 2012. According to Morgan Stanley’s Oliver Chang “We see the trough occurring in 2012 instead of our previous call of 2011.”
- In November, Mark Zandi of Moody’s Analytics predicted another 8% drop in home prices through the third quarter of 2011.
- In November, Fiserv, the company that creates the Case-Shiller Home Price Index, revised down its home-price projections for 2011, forecasting a 7.1% decline in home prices through the summer of 2011. According to David Stiff, the chief economist at Fiserv: “Some of the largest declines in prices will occur in markets that had strong spring and summer 2010 price increases.”
- In September, economist Gary Shilling expressed his view that real home prices would fall another 20% over the next two years before reaching their bottom.
There are a few important people who are bullish are housing right now, but these are typically sophisticated investors with a long-term perspective on housing (for example, hedge-fund billionaire John Paulson and Bill Ackman of Pershing Square Capital). Paulson recently reaffirmed his bullish take on the housing market saying, “If you don’t own a home, buy one. If you own a home, buy another one, and if you own two homes, buy a third and lend your relatives the money to buy a home.” Importantly, however, Paulson’s take on housing has as much to do with his view on long-term mortgage rates and his prediction for double-digit inflation as it does with actual home prices. In other words, Paulson is not just betting on house prices, but also on the ability to lock in low financing now with the expectation that it will be easier to pay it back in the future because of inflation. That said, I’d be surprised if Paulson is still sticking to his May prediction that home prices will increase 8-10% next year. It’s also important to note that these investors likely have a very different time horizon than most consumers or they are constructing macroeconomic trading strategies not easily reproducible to the typical consumer. Given this longer term or more macro view, whether the bottom occurs in the fourth quarter of 2010 or the third quarter of 2011 is less material for them.
Interesting opinions there Steve,
Although they may sound fairly negative about the future of property in USA, I must say I am pretty excited to hear news like this. I am looking to start investing over in the USA in the next few months, hopefully get a property when I am over there in May/June this year. Nothing too major, maybe just a $40,000 condo or something like that.
My main desire is to have a good cash flow, and would rather not focus on capital gains. Also I am hoping that if we get started now, we can slowly build a solid credit rating over there so that in a years time or so we can start to obtain finance, the first property we are looking at purchasing with cash. So if prices do not rise or in fact fall over the next 12 months or so, then that is fine with me, as long as the properties I have are rented out I will be happy.
And hopefully once the credit rating is established, can start to significantly increase the portfolio right behind the prices start to rise, all sounds nice in theory at least.
Good luck on your return journey over there, I hope you find something you like.
Hi Steve
I joined the forum last year after reading your post, I’m located in Perth WA and I’m also very interested in USA and now Miami because I have a friend of a friend who lives there, so after a few months looking for some good connection I think I have found what I was looking for. I may be going over there in April/May as well and see what I can get. I have also some cash, so I want to buy one or two houses, create some history and then later on ask for some credit to buy more houses. Capital gains is not that critical for me, I need good cash flow at the moment and with the rents in USA I can get that.
First I have to work on the LLC and the bank account, so I’ll following your steps and all the other people buying overthere and posting the experience here.
In order to use the money you make overseas, can you get a credit card in USA and use it in OZ?Good luck to you and to everyone else !!!
Mosqui
Mosqui,
I am a fellow Perthite living in Florida at the moment and yes you can get a credit card so that you can use the funds from home.
Mosqui wrote:Hi Steve I joined the forum last year after reading your post, I'm located in Perth WA and I'm also very interested in USA and now Miami because I have a friend of a friend who lives there, so after a few months looking for some good connection I think I have found what I was looking for. I may be going over there in April/May as well and see what I can get. I have also some cash, so I want to buy one or two houses, create some history and then later on ask for some credit to buy more houses. Capital gains is not that critical for me, I need good cash flow at the moment and with the rents in USA I can get that. First I have to work on the LLC and the bank account, so I'll following your steps and all the other people buying overthere and posting the experience here. In order to use the money you make overseas, can you get a credit card in USA and use it in OZ? Good luck to you and to everyone else !!! MosquiHi Mosqui
On my first day in the US I opened an account with Bank of America, and they gave me a Visa Debit card, which I can use anywhere in the world. I didn't ask for a credit card. I have a hunch that once you own property you can apply for a credit card.
Just a word of warning: you MUST have a US address to open the account. There's no way around this. So either rent an apartment for a few weeks (as I did, using Craig's List), or apply for a PO Box. You can't just give some fake address and pretend you're living there, because they will mail your ATM and Debit Card to the address you gave.
good luck
SteveJames2118 wrote:Interesting opinions there Steve,Although they may sound fairly negative about the future of property in USA, I must say I am pretty excited to hear news like this. I am looking to start investing over in the USA in the next few months, hopefully get a property when I am over there in May/June this year. Nothing too major, maybe just a $40,000 condo or something like that.
My main desire is to have a good cash flow, and would rather not focus on capital gains. Also I am hoping that if we get started now, we can slowly build a solid credit rating over there so that in a years time or so we can start to obtain finance, the first property we are looking at purchasing with cash. So if prices do not rise or in fact fall over the next 12 months or so, then that is fine with me, as long as the properties I have are rented out I will be happy.
And hopefully once the credit rating is established, can start to significantly increase the portfolio right behind the prices start to rise, all sounds nice in theory at least.
Good luck on your return journey over there, I hope you find something you like.
Hi James
If you're there in May/June, you may time the "bottom" perfectly. Using the Case Shiller stats (the most recent came out on 27 December, for the combined months of Aug.,Sep., Oct, it seems that prices started declining in June or July. So if you buy in June this year, then there's already been a 12 month downward trend, perhaps of 10%. As I wrote yesterday, it probably won't shoot up after that (could be a small bounce though) but at least you might be buying at the lowest ever.
I shall be making my purchases in Feb, March and April, which may be a bit early. That's why I'm still planning on treading lightly, and buying only one house if things don't feel cheap enough, or if the number of REO's coming onto the market still seem too few.
cheers
SteveActToday wrote:Zita, There are lots of opportunities accomodation wise once on the ground but can only suggest you search and search again on the net and then perhaps once there you can find something cheaper. Just the other day I past a Motel offering $194 per week accomodation. Went in to check as a friend is needing a place and the offer was for a minimum of 4 weeks stay which fitted my friend perfectly. This is not in Miami unfortunately. Take a look at Holiday Inn and Best Western as they often have deals. You can also write and ask for a special price.Thanks for your advice Judith. I have been looking at both Hotel's around the $100/night mark and apartments. I still haven't found anything that is right? It's proven to be a harder task than usual. I organised our hotels in Japan in a few days – We stayed in hotels between $100-$150 a night and it was close to 4 star. In Miami, anything around that mark appear to be all art deco, run down hotels with consistently bad reviews. I may just consider pre-booking a few nights and go with your suggestion, and wait until I get there, although there's nothing worse than roaming a city with your travel bags…
HI STEVE – Welcome back to your thread. You may have noticed everybody has been missing you
You mentioned you rented an apartment through "craigs list" ??? Is that on this blog or where is this list located? This might be a better alternative.. I'd much prefer to stay in something 5 star like the Bentley Hotel… But we are staying just over 2 weeks and blows the budget… so perhaps an apartment might be the way to go.We are heading over Feb 24th and stayinf until March 12th… First thing we will do is do the bus/boat tour through http://www.miamibeach411.com/tours.html which is an 8hr bus and cruise tour of Miami's suburbs and islands, to help us get an idea of Miami. Anyone done any of the tours with this company? They seem to have a whole array of activities … Anyway, we plan to use this trip as a means of investigating the market, making contacts and of course having some fun in the sun. If we like what we see, we do much like what BB did, return, sell one or two properties and head back around June to invest.
It looks as though there will be a few of us heading over around about's the same time and I see this as an opportunity to unite over a dinner or two? BB would you be interested in collaborating over a dinner? It could be a chance for us to show our gratitude to you!
When I opened my Wachovia account I was issued with a Visa Debit card immediately and this was prior to any purchases in the States. Wachovia and Wells Fargo are almost fully integrated after the merge of last year and I have now also been issued with a Wells Fargo Visa. This is a card where you must nominate what your expected monthly spending will be and this amount needs to be deposited into the Visa account. Whilst this is effectively making it an account to draw your own funds from, it has the huge benefit of creating a credit score quickly, which not all accounts do. I have nominated $2000 as this is sufficient to give me a credit score within six months. This is a new product that has only been is existence since December.
Thanks Steve and Judith, this is very valuable information for people on the other side of the globe.
ActToday wrote:When I opened my Wachovia account I was issued with a Visa Debit card immediately and this was prior to any purchases in the States. Wachovia and Wells Fargo are almost fully integrated after the merge of last year and I have now also been issued with a Wells Fargo Visa. This is a card where you must nominate what your expected monthly spending will be and this amount needs to be deposited into the Visa account. Whilst this is effectively making it an account to draw your own funds from, it has the huge benefit of creating a credit score quickly, which not all accounts do. I have nominated $2000 as this is sufficient to give me a credit score within six months. This is a new product that has only been is existence since December.Hi Judith. We opened HSBC USA account from Perth and was issuedwith a debit master card. Do u think we can build up credit scores by spending in Australia? Cheers, Kevin
Klimmy, I doubt your account would be building a credit score but as I don't know details you would need to ask HSBC.
Hi Klimmy,
What you have opened is a USD$ account with HSBC Bank in Australia which will not build you a credit score in the USA.
Me again Klimmy,
I just looked back over your posts and noticed that earlier posts you went via HSBC to open up an account in the USA so you will need to check with them direct to see if you can build your credit score here
Check this one as well,
New data on foreclosures in USA
http://au.finance.yahoo.com/news/US-foreclosures-hit-record-abc-64030289.html
Happy Investing.
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