Thanks for getting back to me so quickly RickH. Love the fact that it seems to be working out for you! I would greatly appreciate it if we could stay in contact over the coming months. I'm sure i could gain a great deal from your experiences… For instance what is legally required for an Australian to purachase property in the U.S.? Hope this doesn't sound a little too one sided for you just unsure of who else to ask.
My general call out for help still stands. Currently researching outer detroit, phoenix and other locals…
If you have any info, please post….
Thanks,
Max
AJAY: I dont have a loan attached to my purchase. Our property was aroung the $50k mark. We were going to finance and do 3 properties but decided no finance and 1 property as got sick of the even moving requirements to secure bank finance.
There are a few posters on here that will give better info regarding US finance ect .MAX:
I am not aware of any specific legal requirements to purchase but I have been advised that setting up LLC for purchase is the best way to protect yourself legally….
Other requirements will be US bank account and some good people on the ground to look after property management ect.Hope the info helps a bit
Hi RickH.
You say you were "advised" to set up an LLC.
Did you actually setup an LLC or buy in your own name?
How are you going to get your tax done???We went with My USA Property. On the surface they seem fairly pricey with the setup costs (about $4,000) but they do take all the stress out of buying. They head hunt you a good property manager, get appropriate insurances and they got me some really good tenants. Their houses I looked at were all rehabbed.
I don't have the time or the inclination to go there, find the right suburb / neighborhoods then find a team to rehab the place then find suitable tenants……..then a property manager who is International friendly. etc etc.
We ended up buying in Cleveland, Ohio. I still have my reservations about Cleveland but the house has good positive cash flow. Neighborhood appears satisfactory. it ticks a lot of boxes……but not all of them.
To buy another investment house in Adelaide I would expect to pay A$400,000 for a decent house in middle class suburb. This does not include the $15,000 approx govt taxes and stamp duty. Which is why I'm not too worried about paying My USA Property some money to do the work for me.
But I can get a decent house in the USA for US$50,000 thats been fully rehabbed, tenanted and fully insured. I can't be bothered setting up an LLC at this stage. I asked the property manager to get me quotes with increased "liability insurance"…..= "no problems at all"
Forget Detroit and all the rust belt. I can't ever see Detroit ticking enough boxes to feel fully comfortable there. I think its the most violent city in the US according to the FBI. Famous city saying "you probably wont get shot in Detroit"…….
I hear poor things about Phoenix.
Memphis is 3rd most dangerous but showing signs of growth.
Kansas City. Fairly poor but doing ok. My next one might be there.
Las Vegas……..hahahahaahhahahahaaaaa…………..Good luck to everyone.
I look forward to everyone continuing there input here.
Hi Gaz,
We have set up LLC and bought our property in the LLC name.
I too were going with MyUSAProperty but switched camps. The LLC set up was half the price and the fees lower. I dont have the time to be “On the ground” chasing everything either. My property manager is in place. I have an attorny in place who has authority to sign docs on our behalf were needed.
Our place was just under 50K rehabbed and in a middle class area of Kansas City. 66% owner occ and close to everything to make it more appealing to renters.
So far so good. If we do buy another it will be in Kansas City again as i feel i know the areas and zip codes that are better than other….in other words i feel confident buying in this areaAll the best
Hi RickH & Biggaz,
Congratulations to the both you on your purchases. Rick…I had been following you from the beginning….determination on your part got you there in the end.
I can appreciate that most people don't have the time, the resources or the ability to invest in US property themselves so there is a reason why most will go to the Aussie "buyers agents". Rick…again I know you had done huge amounts of research yourself on Kansas City. Biggaz..you commented that you invested in Cleveland OH but still have reservations ?? Do you mind of I ask why you invested there anyway….even with the reservations. Was it because this was the city that MyUSAProperty recommended the most ?
I made my first purchase in October last year and all is working out well for me to. I invested in an area north of Dallas TX. This was all done without a buyers agent. I'm not opposed to the concept….it's just that I was going there anyway so had no need to involve one. I had researched for 12 months solid myself so had the basics down. I was able to secure a property…get finance…get a great property manager…referred to an attorney & CPA….insurance, appraisals, title companies etc etc. I'm flying to DFW again in 3 weeks to secure my second property. A good friend of mine who lives in the US has just done the Robert Kiyosaki Rich Dad course and part of it was investing in single family homes. He was then introduced to a property company in Dallas where he purchased 3 homes. 4 months down the track he told me about them. I contacted them and loved what I heard. They have dealt with lots of Australian buyers so are familiar with our tax laws (including SMSF's). The statistics about Dallas are staggering and will amaze you. The prices have appreciated in the last 12 months and it's population is growing at a huge rate. I am looking at a place for $85,000-00. It has been refurbed extensively and it rented for $1100 a month. I will get finance from a local private bank for minimum 50% (but likely 65%) LVR so after taxes, insurances, loan repayments etc I am left with $600 a month net (@50% LVR). 15 minutes to downtown Dallas. Property Management is provided and all done on a web portal. Again I pay no buyers agents fee's as I am dealing direct with the wholesaler. If anybody is interested I might post details each day that I am in DFW as I am spending a week there looking at the options available
Biggaz….one thing I suggest you do is look into seriously is then impact of owning the property in your name. You are automatically classed as a foreign owner at present and this will have big impacts on things like withholding tax (look up FIRPTA), US estate and gift taxes and eventually when you sell it.RickH wrote:AJAY: I dont have a loan attached to my purchase. Our property was aroung the $50k mark. We were going to finance and do 3 properties but decided no finance and 1 property as got sick of the even moving requirements to secure bank finance.
There are a few posters on here that will give better info regarding US finance ect .MAX:
I am not aware of any specific legal requirements to purchase but I have been advised that setting up LLC for purchase is the best way to protect yourself legally….
Other requirements will be US bank account and some good people on the ground to look after property management ect.Hope the info helps a bit
I think that I also recall that a certain percentage of the income must remain in the US but its like only 35%… best to check on that…any ways any positive income is better than none.
speedy gonzales wrote:Hi RickH & Biggaz,Congratulations to the both you on your purchases. Rick…I had been following you from the beginning….determination on your part got you there in the end.
I can appreciate that most people don't have the time, the resources or the ability to invest in US property themselves so there is a reason why most will go to the Aussie "buyers agents". Rick…again I know you had done huge amounts of research yourself on Kansas City. Biggaz..you commented that you invested in Cleveland OH but still have reservations ?? Do you mind of I ask why you invested there anyway….even with the reservations. Was it because this was the city that MyUSAProperty recommended the most ?
I made my first purchase in October last year and all is working out well for me to. I invested in an area north of Dallas TX. This was all done without a buyers agent. I'm not opposed to the concept….it's just that I was going there anyway so had no need to involve one. I had researched for 12 months solid myself so had the basics down. I was able to secure a property…get finance…get a great property manager…referred to an attorney & CPA….insurance, appraisals, title companies etc etc. I'm flying to DFW again in 3 weeks to secure my second property. A good friend of mine who lives in the US has just done the Robert Kiyosaki Rich Dad course and part of it was investing in single family homes. He was then introduced to a property company in Dallas where he purchased 3 homes. 4 months down the track he told me about them. I contacted them and loved what I heard. They have dealt with lots of Australian buyers so are familiar with our tax laws (including SMSF's). The statistics about Dallas are staggering and will amaze you. The prices have appreciated in the last 12 months and it's population is growing at a huge rate. I am looking at a place for $85,000-00. It has been refurbed extensively and it rented for $1100 a month. I will get finance from a local private bank for minimum 50% (but likely 65%) LVR so after taxes, insurances, loan repayments etc I am left with $600 a month net (@50% LVR). 15 minutes to downtown Dallas. Property Management is provided and all done on a web portal. Again I pay no buyers agents fee's as I am dealing direct with the wholesaler. If anybody is interested I might post details each day that I am in DFW as I am spending a week there looking at the options available
Biggaz….one thing I suggest you do is look into seriously is then impact of owning the property in your name. You are automatically classed as a foreign owner at present and this will have big impacts on things like withholding tax (look up FIRPTA), US estate and gift taxes and eventually when you sell it.Speedygonzales,
You say above your friend recently did the Robert Kiyosaki seminar and he recommended investing in single family homes? I have been following Robert Kiyosaki and all he has been preaching about of late is investing in silver and gold? Do you know anymore regarding the seminar your friend went to, as I would be very interested to hear some points of the advice, private message me if you can,
Adam
Congratulations RickH on the purchase.
I am interested in what "buy" strategy you guys have in place when buying US properties similar to those above such as buy under market value reborrow and go again, use cashflow to build equity and repurchase or something else?
Cheers
Rory.
Hi Rory.
Buy and hold strategy.
If I dont want to hold it for 10 years, I wont hold it for 10 minutes.
Cash flow positive. Middle class area. House must be rehabbed. Increased insurance for peace of mind.
You wil be very lucky to get equity in any property in the USA in the next 1-3 years. Possibly even 5 years. Theres just too much stock.So if you want to get more money out of the Aussie bank to invest in USA property you need to show the bank good incoming cash flow. They will hopefully view that as another source of income. No Australian bank will borrow you money against a US house you have.
Hope that helps
GaryRosa,
We were advised to try and leave 30% of the income in a US account soley to be able to pay income tax bill at tax time. No reason why you cant take it all out but need to save the $$$ needed to cover your tax bill.
Rory,
I am planning to hang on to this property for minimum 7-10 years. If the rent is being paid i have no reason to want to try and sell it. I dont predict any capital gains on the property for some time.Adam2011 wrote:speedy gonzales wrote:Hi RickH & Biggaz,Congratulations to the both you on your purchases. Rick…I had been following you from the beginning….determination on your part got you there in the end.
I can appreciate that most people don't have the time, the resources or the ability to invest in US property themselves so there is a reason why most will go to the Aussie "buyers agents". Rick…again I know you had done huge amounts of research yourself on Kansas City. Biggaz..you commented that you invested in Cleveland OH but still have reservations ?? Do you mind of I ask why you invested there anyway….even with the reservations. Was it because this was the city that MyUSAProperty recommended the most ?
I made my first purchase in October last year and all is working out well for me to. I invested in an area north of Dallas TX. This was all done without a buyers agent. I'm not opposed to the concept….it's just that I was going there anyway so had no need to involve one. I had researched for 12 months solid myself so had the basics down. I was able to secure a property…get finance…get a great property manager…referred to an attorney & CPA….insurance, appraisals, title companies etc etc. I'm flying to DFW again in 3 weeks to secure my second property. A good friend of mine who lives in the US has just done the Robert Kiyosaki Rich Dad course and part of it was investing in single family homes. He was then introduced to a property company in Dallas where he purchased 3 homes. 4 months down the track he told me about them. I contacted them and loved what I heard. They have dealt with lots of Australian buyers so are familiar with our tax laws (including SMSF's). The statistics about Dallas are staggering and will amaze you. The prices have appreciated in the last 12 months and it's population is growing at a huge rate. I am looking at a place for $85,000-00. It has been refurbed extensively and it rented for $1100 a month. I will get finance from a local private bank for minimum 50% (but likely 65%) LVR so after taxes, insurances, loan repayments etc I am left with $600 a month net (@50% LVR). 15 minutes to downtown Dallas. Property Management is provided and all done on a web portal. Again I pay no buyers agents fee's as I am dealing direct with the wholesaler. If anybody is interested I might post details each day that I am in DFW as I am spending a week there looking at the options available
Biggaz….one thing I suggest you do is look into seriously is then impact of owning the property in your name. You are automatically classed as a foreign owner at present and this will have big impacts on things like withholding tax (look up FIRPTA), US estate and gift taxes and eventually when you sell it.Speedygonzales,
You say above your friend recently did the Robert Kiyosaki seminar and he recommended investing in single family homes? I have been following Robert Kiyosaki and all he has been preaching about of late is investing in silver and gold? Do you know anymore regarding the seminar your friend went to, as I would be very interested to hear some points of the advice, private message me if you can,
Adam
Hi Adam,
My friend did the Rich Dad course in the USA where he lives. It was a course specifically covering single family homes. I agree…his latest books and emails indicate silver as his best choice but he hasn't went away from his same old philosophy….cash is king and that still includes real estate. Rather then giving a free plug to the company that he was then referred to I'll PM you the details….perhaps when I come back and have 100% of the info myself
Speedy
RickH wrote:Rosa,We were advised to try and leave 30% of the income in a US account soley to be able to pay income tax bill at tax time. No reason why you cant take it all out but need to save the $$$ needed to cover your tax bill.
Rory,
I am planning to hang on to this property for minimum 7-10 years. If the rent is being paid i have no reason to want to try and sell it. I dont predict any capital gains on the property for some time.Cool
I am planning on hopefully getting US finance and using the rent to pay it down fast as well as moving money there to help to get more property….specifics are not worked out yet as I am still short on the 50% down requirement.
ajayayyar wrote:RickH wrote:Hi Ajay, I have had rentals in Qld before but this time wanted something with low outlay that generates immediate income. We purchased a renovated 3 bedroom house in south Kansas City Missouri. After proprty taxes, management fees ect we clear about $700 p/m. 1st payment went into the account the other day. I have not attended anyones seminars in the past. I have spent a few months reading up and studying Kansas City and bought in a middle class area 65% owner occupied close to schools major shopping complexes as well is easy access to highway to get to downtown area quickly. We bought using HouseBuyersUsa and their service has been 1st class and so far so good. I believe every transaction is a risk but if you dont try you get no where ! Look at it long term your property pays its own way, you get passive income who cares if the values still down for 5-7 yrs ……. it costs you zipHi Rick,
Mind if I ask how much % down you put to buy the house and very approx value?
Something like property value $100k and put down $20k.
and I assume $700 per month is the amount you get in your pocket even after loan repayments (or am I wrong…)Agree on your point about passive income…
cheers, ajay
ajayayyar,
if you ACTUALLY read the thread you will find that rickH has already answered your questions.
– He bought in Fairlane Dis, Kansas
– He paid cash 100%Just some experience with MYUSAPROPERTY …
Have been trying to work with them for 12months now. Have been trying to work directly with Andrew Allen (CEO) as my situation has been difficult. As always Andrew responds professionally and makes lots of promises and commitments to help but never or rarely follows through. I have been left high and dry. Here's a summary:
1. Purchased a 4 unit complex Dayton Ohio, went for the one with 4 tenants and fully refurbed to minimise my risk … even though it meant a lower return;
2. No or limited info on the area, so did my own research … seemed ok when considering photos, county web page etc and seemed a minimal risk when considering the return and that it was already fully tenanted and refurbed;
3. Got some photos exterior and interior … guess MYUSA only showed what they wanted to;
3. Property settled. No keys, No agent, No leases (yes I should have done some more research or pressed to see all this before settling, but Andrew assured me it was all there and he was managing it. He would described the scenario that the settling agent had all this info);
4. Andrew provided new agent contact details. I signed. Still no keys. I arranged with the agent to change all the locks and take control;
5. First inspection: 1 tenant not 4 (and advice this tenant was no good). The 3 vacant units were untenantable. The place needed a complete refurbishment – cost $32k (paid $50k for the units). Advised Andrew, who of course was horrified and was just going by information that he had been sent from one of MYUSA's clients he was selling this for … he could not possibly be held responsible for misrepresentation as it must have been misrepresented to him ….
6. MYUSA refunded my fee (nice of them) and Andrew advised he would continue to assist … as I said, he is very accomodating and tries hard, but is way out of his league for a credible business and the relevant due dilligence that I had paid for. Andrew helped me find a new refurb agent, which only charged me $14k … yes he did a good job (so the photos showed), but my managing agent wanted another $7k to finish the job properly ….
7. Add to this a defaulting tenant (owes me $2k), an area in the red light / drug district and homes nearby untenanted and boarded up (only found this demographic after 5 months ownership … not for want of trying to find out, just that the agents seemed to be reluctant to tell me and MYUSA simply had no idea) …. the list of issues goes on and on.
8. AUD$80k out of pocket …. have just placed it on the market for $USD$20k as my stress levels have hit the roof and my bank balance gone through the floor … did I mention the Tenant is now suing for falling in the unit!All I can say is it is pure chance if MY USA PROPERTY manage to set you up with a good one … it is not to do with their good management or 'people on the ground' … I was advised all of this and that the property was screened and out of the millions of properties for sale this was one of the good ones that My USA as experts and professionals have sought out on my behalf.
If you want to know more, I am more than happy to share my experience … you will get nothing but the truth from me. Be cautious when dealing with Andrew from My USA though as I guenuinly believe he is trying to help and he believes he is telling the 'truth' in an entrepenerial / marketing way … he is the kind of optimist and positive thinker that under normal circumstances you would like to be around.
kind regards
GPI must admit i were dealing with MyUSA and got cold feet when all the photos sentwere dated 2007 from memory.
When i asked for updated photos I were told this would be difficult due to tennant privacy laws.Also on doing my location homework the houses offered were in the worst parts of town. Some ranked in the 10 most dangerous zip codes in the USA.
In hindsight i am happy that i didnt proceed and the major reason we didnt was because the finance was taking forever to go through so we decided to walk away…..did lose the "membership fee" but better than losing the lot !
bilobunch,
First of all I am saddened to hear your story and how this effects you personally but I get angry when you state that MyUSAProperty's attitude is "well it was misrepresented to us so you can't blame us"….that's a load of crap. Here is a company who sprouts being "experts in helping Australians invest in US property" and they couldn't bother doing some due diligence. Indicative of all sales they have made I suggest
My fear is that there is many more of these stories to come out of the woodwork and many more lives ruined. Guess it justifies staying away from the Aussie buyers agents who really have no idea of the US market to begin with and rely on "people on the ground"…man those guys saw Andrew Allen coming a mile away and are taking unsuspecting Aussies for a ride.Bilobunch:
Not sure where to start other than to say these kind of transactions give our business such a bad name. However for everyone that comes forward to share a horror story there are 10 like you that are embarrassed would never admit they made a mistake or got taken by a Promoter or buying service.
In the states we have our own versions of buying services. Google Armondo Montalongo you will see he gives free seminars on how to make millions and retire in a year with non of your own money blah blah blah. Then you go to the seminar you get all pumped up by the pitchman and you sign up for the 3k 2 day intensive training, They then go through the normal how to get rich quick stuff like short sales foreclosures how to do owner financing wrap mortgages and the like. The next big pitch and this is where they a really get the Americans is they then sell you a mentorship program for another 30k. With the idea that you have 8 hours a day contact with your personal mentor to help you through all aspects of the transactions. Well I have personally been to these companies they are all in Salt Lake Utah, The promotion companies have huge boiler rooms set up with 100 cubes and 20 to 25 year olds manning the phones big coolers of Red Bull and Mtn. Dew to keep them properly caffinated. These kids know no more about how to mentor someone than any other person off the st. so at the end of the Day someone who came to Armondo's Free seminar has spent oh maybe 40k and still has not bought anything. Then if you want to go with him personally remember he had a reality show, then you can pay another 10k to be his guest on a bus tour of all the deals you going to clean up on. He actually gets on TV and tells people they will start making 40k a month flipping houses if they just follow his program.
When you google him you will see all sorts of law suits etc. Being a hard money lender I have made loans to and talked to many of his and others students with the same horror stories.Ok back to the Aussie situation. I have stated before on this forum that people get way to caught up in return on investment other than capital preservation. And I agree with Speedy this USA buyer they were probably taken as much as the poor owner, However thats bad on them they should have no way put you in an invest how you described it, That shows a total lake of Due diligence and Charater on their part. However they are making profits on each of these sales this is how the business works. And by the time the out of area investor gets a property there is usually 2 to 4 fee's paid out to wholesaler local, Rehabber who bought it and sold it, Out of area marketing company etc etc. As a lender I will not make a loan on a property until I have seen a certfied HUD 1 when the wholesaler purchased the property then I can work the numbers from there.
It is standard in the industry to have between 15k and 50k mark up on these properties over all cost before they get to the end user. but hey thats capitalism and it works because the Aussies are paying cash most of these deals would never get financed by a US bank because the banks would not lend on properties with such big flip fee's in them its inflated value and not true market conditions.
As I read these post I may just start a constulting firm that has no financial interest in any property or area. And do a down and dirty due diligence for potential buyers for a flat fee say a few hundred bucks. I already know the top 10 markets and specific zip codes and markets not to invest in. As I would not touch them as a lender no matter what.
I use my full name on this site as my sign in so people can google me here in the states. Jay Hinrichs Portland Or.
having any investor loose all their hard earned cash by investing in a property that they had no business being in gives our industry a bad name and the good players a much tougher time. unfortunatly you have the heard mentality going on in Aussie from what I can see and as I have stated before the Foriegn investor really gets way to caught up in the % return. And thereby takes far to many risk's thinking they are going to buy a property that cash flows 18 to 25% year after year. Hey I am in the bizz and I cannot achieve those numbers. Of course I do not buy War zones either.
My other thought is I think Aussie investors could do really good just being the bank. And let a professional company like my company or any other number of good smart lenders lend your money. Be happy with 8 to 10% and know your going to in 99% of the cases never loose principal. I am just saying
jayhinrichs wrote:Bilobunch:Not sure where to start other than to say these kind of transactions give our business such a bad name. However for everyone that comes forward to share a horror story there are 10 like you that are embarrassed would never admit they made a mistake or got taken by a Promoter or buying service.
In the states we have our own versions of buying services. Google Armondo Montalongo you will see he gives free seminars on how to make millions and retire in a year with non of your own money blah blah blah. Then you go to the seminar you get all pumped up by the pitchman and you sign up for the 3k 2 day intensive training, They then go through the normal how to get rich quick stuff like short sales foreclosures how to do owner financing wrap mortgages and the like. The next big pitch and this is where they a really get the Americans is they then sell you a mentorship program for another 30k. With the idea that you have 8 hours a day contact with your personal mentor to help you through all aspects of the transactions. Well I have personally been to these companies they are all in Salt Lake Utah, The promotion companies have huge boiler rooms set up with 100 cubes and 20 to 25 year olds manning the phones big coolers of Red Bull and Mtn. Dew to keep them properly caffinated. These kids know no more about how to mentor someone than any other person off the st. so at the end of the Day someone who came to Armondo's Free seminar has spent oh maybe 40k and still has not bought anything. Then if you want to go with him personally remember he had a reality show, then you can pay another 10k to be his guest on a bus tour of all the deals you going to clean up on. He actually gets on TV and tells people they will start making 40k a month flipping houses if they just follow his program.
When you google him you will see all sorts of law suits etc. Being a hard money lender I have made loans to and talked to many of his and others students with the same horror stories.Ok back to the Aussie situation. I have stated before on this forum that people get way to caught up in return on investment other than capital preservation. And I agree with Speedy this USA buyer they were probably taken as much as the poor owner, However thats bad on them they should have no way put you in an invest how you described it, That shows a total lake of Due diligence and Charater on their part. However they are making profits on each of these sales this is how the business works. And by the time the out of area investor gets a property there is usually 2 to 4 fee's paid out to wholesaler local, Rehabber who bought it and sold it, Out of area marketing company etc etc. As a lender I will not make a loan on a property until I have seen a certfied HUD 1 when the wholesaler purchased the property then I can work the numbers from there.
It is standard in the industry to have between 15k and 50k mark up on these properties over all cost before they get to the end user. but hey thats capitalism and it works because the Aussies are paying cash most of these deals would never get financed by a US bank because the banks would not lend on properties with such big flip fee's in them its inflated value and not true market conditions.
As I read these post I may just start a constulting firm that has no financial interest in any property or area. And do a down and dirty due diligence for potential buyers for a flat fee say a few hundred bucks. I already know the top 10 markets and specific zip codes and markets not to invest in. As I would not touch them as a lender no matter what.
I use my full name on this site as my sign in so people can google me here in the states. Jay Hinrichs Portland Or.
having any investor loose all their hard earned cash by investing in a property that they had no business being in gives our industry a bad name and the good players a much tougher time. unfortunatly you have the heard mentality going on in Aussie from what I can see and as I have stated before the Foriegn investor really gets way to caught up in the % return. And thereby takes far to many risk's thinking they are going to buy a property that cash flows 18 to 25% year after year. Hey I am in the bizz and I cannot achieve those numbers. Of course I do not buy War zones either.
My other thought is I think Aussie investors could do really good just being the bank. And let a professional company like my company or any other number of good smart lenders lend your money. Be happy with 8 to 10% and know your going to in 99% of the cases never loose principal. I am just saying
Bilobunch
I guess the problem with Aussies getting 8-10% is that most Aussies are are paying 7-8% on their mortgages and if the returns are only 8%, they would be better off paying any spare cash off their loans, paying no tax. The advantage of investing in property has always been the capital gain aspect but with the uncertainty in the US market, it remains to be seen whether that happens. As a matter of interest, how would an Aussie become involved in hard lending?
Well now the horse is out of the barn, If your saying Aussie investors are borrowing on their primary residences at 7 to 8% pulling cash out and investing in the states becasue they think they are going to get 15% to 20% return, and make the spread.
Then what you have is a big transfer of weath, half of the aussies that do this will loose all their money buying in the wrong areas. and the US companies and the promoters will pocket their hard earned dollars and theri equity in their homes.
There is no way anyone should borrow on their homes or retirement funds and buy a property in the states unless they intend to use it. In the long run you all are going to lose money, not everyone one but at least 50% and the ones that get caught up with the companys like bilobunch invested with will get wiped out. This is just reality
Why do you folks think these deals are there for you in places like detroit, Dayton fort wayne , and other rust belt cities because the local will not touch them with ten foot cattle prod. There are plenty of americans that can afford a 30k rental they just know its money down the drain in the wrong neighborhoods. And if your going to venture into this asset class you need to own hundreds of them not just one or two it needs to be a business and run very tightly
jayhinrichs wrote:Well now the horse is out of the barn, If your saying Aussie investors are borrowing on their primary residences at 7 to 8% pulling cash out and investing in the states becasue they think they are going to get 15% to 20% return, and make the spread.Then what you have is a big transfer of weath, half of the aussies that do this will loose all their money buying in the wrong areas. and the US companies and the promoters will pocket their hard earned dollars and theri equity in their homes.
There is no way anyone should borrow on their homes or retirement funds and buy a property in the states unless they intend to use it. In the long run you all are going to lose money, not everyone one but at least 50% and the ones that get caught up with the companys like bilobunch invested with will get wiped out. This is just reality
Why do you folks think these deals are there for you in places like detroit, Dayton fort wayne , and other rust belt cities because the local will not touch them with ten foot cattle prod. There are plenty of americans that can afford a 30k rental they just know its money down the drain in the wrong neighborhoods. And if your going to venture into this asset class you need to own hundreds of them not just one or two it needs to be a business and run very tightly
I agree, but most Australians have a mortgage and even without pulling money out, if they have spare cash, enough to buy a US home for example, they would be better off chucking it in to their mortgage if they best return on offer was 8%, so they chase the 18% or so being touted. I have looked at the 18% return properties myself and I agree. You are buying huge maintenance biils, bad neighborhoods and no chance of capital growth. Sure, they are cheap (by Aussie standards) but I think I would pick an area with nice newer homes in good neighborhoods. Less return but safer with better long term prospects. Its all a gamble, but stack the cards in your favor.
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