Property in the USA

From my research it is very difficult to get loans in the USA for foreigners. Also the foreign currency component would have a negative effect if the Aussi dollar starts to drop against the greenback, your loan would not be as attractive.

Better if one has equity in a local property to try and get a line of credit here and pay local rates

Jeff

I looked at LoansUSA. The $4400 fee (for non MyUSA costumers) was too high for my liking. If purchasing in the lower price range <$50,000, all of these add on fees just decrease my profits and defeats the purpose of purchasing in USA.

Paying with cash for 1st property.

I would rather spend $1500 on flights / accom and personally head over to the US and talk to banks about the possibility of getting a loan than paying a $4400 fee

Little facts I know:

1. For cash flow positive properties tax on the income depends on the state. Check both the state and the IRS web sites for more information. I believe in Florida the positive cash is not taxed like the earned income is. You do pay porperty tax and this depends on the assessed value of the property which is done in December of each year by the county. In Miami-Dade the tax is about 1.9% of the assessed value. Information about the assessed value and the tax is available at http://www.miamidade.gov/pa/property_search.asp click on Property Information and use the drop down choice for Property Taxes.

I believe the positive cash flow will be taxed in Australia. I am finding out with my accountant.

2. Regarding condos and HOA fees. As mortgages in USA are non-recourse and people lost their ability (or the willingness depending on the individual) to repay and faced losing the property, investors started to keep the money from the rent and stopped paying any outgoings (mortgage, HOA fees, etc). Some HOA reacted by implementing a policy whereby if you have tenants the rent would go to the HOA account first and the HOA will pay you the remaining to your bank account after deducting their fee. If you are thinking on a condo, do check if this rule has been implemented as well as the level of unpaid HOA fees from owner occupiers.

3. Mortgages for Aussies are 40% deposit for condos and 30% for single title or condos where each unit has its own land title (yes, there are some). The catch is that there is aminimum loan amount of $80,000. This means that for a condo you'll need to purchase something worth abpout $134,000 to meet the minimum loan amount and this means a deposit of $53,600 with closing costs of about $9,000. For $53,600 cash you could buy a nice 1 BR unit outright that could rent between $800 and $900 pm giving you 17.9% – 20.14% p.a. return before expenses. The closing costs when you don't have a mortgage come down dramatically (about $1,600). I was in the Kendall area of Miami back in July and went to check some properties at this price thinking they would need work but I was wrong. Actually 1BR units at this price are in good condition. Those going for about $40,000 most likely will need work but you'll be amazed how far 5 grand at Home Depot can take you.

Yes hundreds of thousands of homes have been affected. The problem is the plasterboard that contains the sulphur elements could be anywhere and all throughout the house, not a particular wall or room. This makes it a real procedure to figure out where it is. Basically every board needs to be drilled and sampled and then plugged up, re-plastered and painted if not affected. If the price of the house is low enough for you to re-plaster the lot and still be way in front, then it is probably ok.

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Hope that helps
Ian
http:theblockblog.com

I agree with previous posters, financing is VERY difficult for non-residents who are looking for mortgages in the U.S. By far your best bet is trying to obtain financing in Australia, using property over there as collateral.
Florida is a good place to invest, although you need to be very cautious. There are also great cash flow deals, the best being in Michigan – I know some people on here are saying “Oh I’d never do Michigan, but will do Kansas City” – as an American and Investor (it’s what I do for a living) I can assure you that while on the surface they might look different, but when it comes down to it, a 20K home is a 20K home regardless if it is in Michigan, Kansas, Missouri or Florida I’m not defending Detroit, I’m just saying that at that end of the market, cash flow should really determine where to invest, as I think capital appreciation is unlikely in all of them, and Michigan has the most generous Section 8 list with the longest list of people waiting.

@highincomeproperty

There is nothing wrong with defending Detroit! That is the market I invest in

It is a great market that has a lower entry price point with great cash flow. I am trying to buy up as much as I can right now because I know things will not be like this forever.

-Dan

Hi all,

From someone that has been helping Sydney investor in purchasing US investment properties, and has purchased many myself I concur with the last comments by Jayman.  You need someone with local knowledge and experience.

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Rob
[email protected]