Hi All,
My partner and i are very interested in investing in the US property market. I have found several companies that can assist us from Aus. Just wondering what peoples experiences have been with different companies before I take the plunge. I have seen Cash for Gold, My USA Property and 888 real estate, considering any one of these just wanted some feedback if anyone has any? We have draw down available on other properties so we are not looking at finance.
Cheers
I have come across all 3 companies you mentioned.
I am not going to comment on any company in particular but I suggest that any property you are considering purchasing you look into the sales history.
Many buyers agents are teaming up with flippers in the US that buy properties supercheap from the foreclosure market, spruce them up with paint and carpets etc and then on sell them to out of town investors for much higher prices. One of the examples I saw through an Australian buyers agent that has teamed up with a US flipper. The flipper paid $13k and was onselling for 62k on a 15% yield through the buyers agent and you had to pay the buyers agency fee!
Check the sales history at http://www.zillow.com by typing in the address. Do not buy any property that you cannot verify the previous sale price.
The aim of the game in my opinion is to buy "wholesale" at the foreclosure price so look for a way to achieve this.
Hi
I think you would have seen from some of my posts that my husband and I are dealing with My USA Property. We have had nothing but positive experiences with them. Everything they have promised so far they have delivered. Along with property management in the US!
I would speak to someone too about only using your drawn down funds from Australia. That can sometimes put you not in a position of stregnth as you move forward with purchasing properties. We attended just last month a little finance seminar in Brighton which was run by Loans USA – a bit of a drive – but well worth the trip. They explained the benefits of finance over using all your available cash in Australia.
We havent dealt with the other companies that have commented above me – but they seem to make sound comments on this forum too. But as per your question, we have had no issue with My USA Property at all.
Hi Jodee,
All I will say is tread with extreme caution. The concept etc is all 100% correct & I have no concern with investing in USA real estate (in the right markets) I have had personal experience in USA real estate market having been involved in financing to sales at one stage and still travel to the US and am already investing in property there.
My concern comes down to the actual companies you mentioned themselves. I won’t mention company names in this forum but mid last year I was interested enough to gain employment with one of the companies you mentioned. I wanted to see if I could gain any inside knowledge and to see if they knew something that I didn’t. I was not seeking a long term career. I discovered that the inside management had a past in selling overpriced real estate to Australian investors. The sales staff that most of you will deal with have been put through intensive training programmes to give the hard sell to prospective buyers and trained to sell multiple properties. They are not the slightest bit interested in your financial future and will move on to the next sale once you close on the deal. They get their stock from wholesalers in the US who have already made a substantial profit when they have purchased from the banks and then add on commissions to the price to cover Australian buyers agents. Oh I’m sure they’ll tell you that they only sell the homes to you at the same price they sell to Americans and that is correct…. but think about it a minute. Go back in time to overpriced Gold Coast investment properties. The marketeers duped all the southerners into paying inflated prices that was for sale to Queenslander’s at the same price…..if they were stupid enough to pay that price !!.
I suggest if you had had no experience in US real estate that you need to see it first to understand it. It’s a completely different market from Australia so you should have a look firsthand to get a firm understanding of what drives that market etc before you commit. You need to consider school districts amongst many demographics. I am no fan of Neil Jenman but on this occassion I think he may have it correct……he suggests many Australians are being duped into absolute crap property investments in the USA….driven by expert salespeople keen to earn a commission and move on to the next kill.
Let me ask you….if you saw the same numbers for an investment in the NT….would you go an have a look or rely upon a salespersons details ??.
As far as US investment…go for it I say if it suits you but check it all out first
Hello all,
I pretty much agree with most of the comments, I have personally never enlisted the help of these companies or similar ones. In principal it all sounds very nice, they do all the hardwork and you pay a little bit extra for piece of mind. But unfortunately like any organisation, greed can become a factor and in the end all they care about is getting their commissions rather than satisfying the customer, it is a shame really. If one company decided to do it properly, maybe make a bit less money but completely satisfy the customer as best as they could, then you think it would involve a lot of repeat business, as well as them referring them to friends.
Anyway, a couple friends and I are looking at investing in USA, we decided to do as much of it ourselves, mainly to save money, but also we think if we do a lot of the research and legwork ourselves, it will give us a better understanding of the American marketplace, and will allow us to do future deals. We are in the process of setting up our LLC now, and from there we will look at getting our EIN and setting up our bank accounts, and then have a list of contacts such as real estate agents in areas we are keen to look at, hopefully having it all ready by the time we go over to the USA in May this year.
The simple reality is unless you have the right contacts on the ground you are wasting your time. The people you deal with will make all the difference to how successful you will be. I take a long term view with what I do with clients. I have a problem that there seems to be a new company opening every week when it comes to marketing the United States. Most seem to be looking at doing large numbers. To me this will lead to mistakes. Are companies dealing mainly with Real Estate agents if so you have to question quality control. I have been involved in the Texas market since 2005. I deal with people on the ground who I trust with my money. My experience is that most services on the ground are not as good as what you would get in Australia. If you are going to do it yourself be prepared to put a lot of time aside.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Hi All,
Agree with the above comments. As per any successful investment into property…..it is usually determined by your network of professionals that you have around you. I was fortunate enough to get a first hand introduction to a team that had been tried and tested by previous Australian & New Zealand investors so I wasn’t going over to the US to re-invent the wheel.
And don’t expect that the service will be exactly the same as what your used to in Australia…..there are some subtle differences particularly with property management and the banking systems.
I guess the advantage that these companies do have is that it is very daunting to do it alone and it will require a lot of dedicated time on your behalf to succeed……problem is they take full advantage of this and as James points out……the sniff of commissions kicks in and the consumer loses out. Please understand that they don’t care whether you succeed or not and don’t have YOUR best interests at heart
These are very professional marketing groups who will do a great job of making it all seem so easy for you to the point you will ask yourself “what have I got to lose” They do a great job of making themselves look like a huge organisation with all the expertise and drop all the right names and have all the right answers and even have dedicated Customer Service Departments to look after you after hours……just look out and don’t get sold on the numbers alone.
Hi All,
Something Nigel should emphasise more is that the properties his clients are buying come with loans in place that are assumed by the buyer (something you can't do over here). One of the major issues with the US, for Aussie Investors, is the difficulty of financing properties on decent terms. <Moderator: delete advertising>
Regards
AlistairAPerry wrote:Hi All,Something Nigel should emphasise more is that the properties his clients are buying come with loans in place that are assumed by the buyer (something you can't do over here). One of the major issues with the US, for Aussie Investors, is the difficulty of financing properties on decent terms.
Regards
AlistairThat's very useful, also the post SpeedyGonzales made about alot of these companies being marketing companies rather than property companies is astute.
That's right we find properties before they are forclosed. We take them over and part of the deal is that they have to leave the note or mortgage in the property. So in most cases you are taking over a property worth between $120,000 and $140,000 that will cost you between $20,000 and $30,000 with an existing mortgage of say $80,000. In all cases the properties are positive cash flow and in all cases have equity. To me this is a much better deal than buying cheap second rate properties in slum areas for $30,000. In our market property prices have held up. In many of the other markets being promoted we have seen falls of around 45-50% since 2006. In Texas prices have not only held up well but will more likely rise faster than most of the other US location.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Nigel Kibel wrote:That's right we find properties before they are forclosed. We take them over and part of the deal is that they have to leave the note or mortgage in the property. So in most cases you are taking over a property worth between $120,000 and $140,000 that will cost you between $20,000 and $30,000 with an existing mortgage of say $80,000. In all cases the properties are positive cash flow and in all cases have equity. To me this is a much better deal than buying cheap second rate properties in slum areas for $30,000. In our market property prices have held up. In many of the other markets being promoted we have seen falls of around 45-50% since 2006. In Texas prices have not only held up well but will more likely rise faster than most of the other US location.could you explain this to me cos it doesnt make sense to me…
if the property is 'worth' between 120-140k and is going to be foreclosed why would you pay effectively a heavy premium for it, or was it originally bought at around $180k? And if property prices have held up why is their so many foreclosures?
In Texas there have always been a large number of foreclosures. The rules there are brutal. If you are three months behind in your mortgage your are foreclosured. Now can you get better deals buying these properties on the court house steps maybe. The problem is if you buy this way you have to pay cash and buy sight unseen.. You say a heavy premium, if you buy a property with $20,000 to $30,000 of profit if you decided to sell why is that a bad deal. You do 3 deals a year and may make $60,000 to $90,000 dollars a year without taking huge risks. The marketeers will tell you that the properties you buy for $20,000 were worth $200,000 is nonsense. Many people why buy these properties will loose money. With our deals you can even lock in your profit by doing a rent to buy deal with the tenants. Our aim is to create on all levels a win win situation.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
white_goodman wrote:Nigel Kibel wrote:That's right we find properties before they are forclosed. We take them over and part of the deal is that they have to leave the note or mortgage in the property. So in most cases you are taking over a property worth between $120,000 and $140,000 that will cost you between $20,000 and $30,000 with an existing mortgage of say $80,000. In all cases the properties are positive cash flow and in all cases have equity. To me this is a much better deal than buying cheap second rate properties in slum areas for $30,000. In our market property prices have held up. In many of the other markets being promoted we have seen falls of around 45-50% since 2006. In Texas prices have not only held up well but will more likely rise faster than most of the other US location.could you explain this to me cos it doesnt make sense to me…
if the property is 'worth' between 120-140k and is going to be foreclosed why would you pay effectively a heavy premium for it, or was it originally bought at around $180k? And if property prices have held up why is their so many foreclosures?
The property is worh say $120K with an $80K loan in it, this leaves equity of $40K. The client pays $25K, so they get instant equity of $15K and also take on the mortgage. Its the same as buying a property worth $120K for $105K, paying a $25K deposit and getting your own finance. <moderator: delete advertising>
I hope this explains it better.
Regards
AlistairHi All,
I would definitely try and do your homework or at least as much as you can. I am a property investor in Kansas City, Missouri and have been over the past 12 years. The nice thing about using a broker over there is that they have established contacts hopefully with reputable investors in the states. I have done business with both of those firms and have had pleasant experiences with both. The name of the game right now in the states is cashflow and within a few years you will see substantial capital gains. Hope this helps.
All I can say is if you are going to invest in a US market that you check out the people you are working with. There are some great companies and then there are some not so great companies.
I have noted that in our urban core area here in Kansas City that the #1 buyer for properties right now is from Australia – in sheer numbers, the most houses being purchased are by investors from Australia and other countries outside of the US>
One great resource for what ever area in the US is http://www.NationalREIA.com where you can find local people on the ground that are there for networking and education and can direct you to their members .
I say this because I get on average 3-5 calls from investors who have paid hard earned money for a house in our urban core and it is not performing as promised and the person or company who sold to them is not returning calls. I would rather talk to you before you buy into a deal like this rather than after.
The sales histories of properties is readily available from County Appraiser websites. Do your searches before you sign up to anything. Some of the numbers do not add up. Go to your favourite spruiker's website, pick a house with an address, go to the Appraiser site and find out what was last paid for it……..hmm could be interesting.
Nigel's deals are not included in the above and seem to be fair.I buy the $30,000 homes, spend between nothing (except elbow grease) and $6000 max. to achieve very nice family homes that rent between $650 and $750 per month. I do not buy Condo's due to the uncertaintly of HOA fees being paid and the possibility of other owners/tenants falling on hard times. I also don't buy Duplexes although there is very good money to be made. I prefer a little less rent and a little more stable tenant who is likely to stay longer due to kids in school.
Thankyou all so much for your posts, it has given us some food for thought and we will be looking into all of your ideas and suggestions. I must say it is quite challenging trying to come to a decision. Once again thanks so much.
Jodee73 wrote:Thankyou all so much for your posts, it has given us some food for thought and we will be looking into all of your ideas and suggestions. I must say it is quite challenging trying to come to a decision. Once again thanks so much.
Hi Jodie,
I have read all the posts in response to your question.
All the responses have got merit, and I do agree that you need to be careful in who you would deal with. One thought that I have, is that in dealing with any company that offers to sell US property, what experience does that company or rep have in investing themselves. Have they EVER gambled there OWN cash, or do that just offer advise on how you can make money.
I would suggest that you ask that question because if one has not done the hard work themselves how can they offer advise.
I have invested in property here and the USA and would be happy to share with you my experience if that is of interest.
my email is [email protected]
The Nigel system sounds interesting. Although we have actually gained finance as Australians without any US credit rating by using Loans USA. They finance directly from the US, with US banks. They can even get US bank accounts set up without any hassles.
Why wouldnt you just get preapproval for finance before you go overseas and use there services? Just a thought.
i’ll be getting in touch with Loans USA as this is more in line with what I could use as I am in the US and can do my own due diligence. There are many who are not confident in doing it themselves and need the services of someone else to walk them through.
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