USA – Where to buy?

Jay,
Not sure what is on offer.  Visited the website but not much information there.  Is it a land purchase and then hold?

As a follow up to my comments on Vegas and cheap lots. in those markets to put it into perspective. Lots that were 100k plus were sold shovel ready in bulk and I mean 500 to 1000 at a time for under 10k per lot.

You are already seeing new construction going up on those, and they can compete with the foreclosures because the reset of the land values.

Its the same here in Portland we building about 2 homes a month in 4 different subdivisons. We can do that because what was a 200k lot we bought from the bank for 80k we lowered the price of our finished product from 475 to 350 and they are selling.

Portland for 20 years until the crash built 10k to 12k housing units a year. 09 saw less than 1k.  2010 about 1500 and this year looks like close to 3k based on permits applied for. So the rebound is happening, prices are lower, The builders that bought land at the peak are the ones that lost out. Along with their lenders. Most lots in our market are bank owned thats who we have bought them from.

60k US plus 2400 a year option payment. return in 5 to 7 years 10X plus. My partner and I and my childrens trust will hold 50% of the investment, I have another group here in Portland that just closed on 20%, young guys that have successful local business's.

My main interest in posting this was to see if there is any interest from OFF shore investors that want to buy and hold strategic properties with huge upside as oppossed to cash flow rentals, which seems to be the only thing talked about on the forum.

There are many smaller deals  this one is 5.5 mil purchase price, which I consider a mid size deal. but when we roll out in 5 to 7 years at 30 to 50 mil it becomes a sizable transaction.

My thought is there are smaller deals that the big boys will pass on, Deals that are say 250K to 750K. that present great upside,
 
so in my brainstorming I am thinking hey if there is appitite for these off shore we could start to pick them off one by one. And to take it further if we built out the product, which we are capable of doing we would make anywhere from 30 to 75k builders profit per house which is what we are enjoying today. Any run up in values and it gets real good real quick.

Different level of investing for certain, Much higher quality product  and price points.

Let me know your thoughts.

I have been away from the forum or quite a while, always find it interesting to check in every now and then.
The scheme Jay is talking about, although I'm not familiar with the particulars (never even been to Oregon, one of the few states I haven't) is something that sophisticated investors might want to look at.

We've had a decent number of Australians invest with us in residential land lots in planned communities across the country, although when investing with us, the difference (I think) is that you would get individual title to the land, and could sell at will. Lots in some communities across the country are off by as much as 85-90%, those of you on here that follow Lee County, FL will know what I am talking about.

DetroitDan is right on Detroit, we've put most our investors in there with net yields north of 15%, and I know I sound like a broken record, but NOT all of Detroit is bad. We have done deals on the "fringes" like Warren, Dearborn, Oak Park, Eastpointe, and these are all good areas. We're an asset manager, not a broker, so we LITEARALLY have to invest in these places ourselves, and if we can't sell the property on once we have finished the rehabs, then we will hang on to them. Section 8 in michigan is fantastic as well compared to the rest of the country.

Kansas City is interesting – we are very big on Indianapolis as well, it's got a very strong rental market, low purchase prices, the "bad" areas are very isloated, consistent yields north of 15% net, and is slowly transforming from a manufacturing/rust belt type of economy to an economy focused on services and Government.

There are deals everywhere, it's just very important to decide what YOU want – if growth is what you want but no need for income, then either land (long term) or a property in Florida (higher HOA so low yields, but great groeth prospects) or parts of Texas, Cali etc would be good, but if you want cash flow then my vote is still 100% for the Midwest, and our clients seem to second that, but as always – look at what you are buying, and at what price.

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Florida land were does one start.   Here is a History lesson for some just so you get some perspective of why you have 5k lots in florida and other parts of the country.

Lehigh acres and coral gables, lets start there, these subdivisons were created in the 50s when florida was swamp infested mosquito ridden place, the state in an effort to bring people and money let land developers go wild, and wild they did, Leheigh has over 750,000 lots of record, coral about 500k  So we all know real estate 101 supply and demand, there is an endless supply there, demand is weak , these lots origianlly sold mainly to snow birds from Mich Wisconsin, Illinois etc. back in the early 50's what was a tidy sum them 2 to 5k , they maybe got up to 10k over the next 40 years. then come the big boom not to be confused with the big bang, Builders moved into these areas because lots were dirt cheap and bulit 1000 of houses. there is sewer and water to some of them and they have more value but the vast majority are on Well and septic. thats a well and septic every 100 ft. So these 1000's of houses were built mid 2004 alittle before up to 2007, prices of lots rocketed all the way to 90k then the crash the 250k house went all the way down to 35k, I know I bought 2. lots plummetted back to 5 to 10. There are still over 500k lots undeveloped these are not what you would consider buying and holding. I was on a state of CA land use steering committee in 1985, subject: what to do with the millions of lots that were platted but really cannot be built out becasue of infrastructure constraints. We flew to fort meyers and had meeting with planning staff etc. These 2 sub's are the poster child in the whole state of developments that can never fully build out because the road systems sewer and water could never handle it.

If you go out of LA towards Edwards airforce base ( home of the Shuttle) thats riverside and San bernadino counties biggest counties in entire country there are over 2 million lots platted there back in the 20s if you fly over especially in a small plane like I have done 100's of times you will see checker board dirt roads the occasional mobile home. these lots have been trading for tax's and low dollars nearly 100 years. Some profiters will come in and try to flip them off to foriengers one group in San Francisco was selling lots he was buying for 100 to 500 dollars each at tax sale and selling them to unsuspecting chineese for 20 to 30k each. Of course they were cash buyers and the profiter very well orginaized, I was in his office he was Chineese there he is with his Rolls parked infront of his office, and pictures of him with Reagon.

bottom line there are land plays in the states and then there are land plays that are like florida not worth a crap. These same florida lots create this whole tax deed investing scheme as well since there are a million of them.

hope the history lesson helps people are flying back into Leheigh to snag those 35 to 60k houses built in 04, I personaly thing if you want to live there or use it as a second home that they are great buys. And there should be some appreciation.

its cost 75 a foot to build so your 1500 ft house is going to 90k or so to build plus your 10k lot. So its reasonble to think these homes on a case by case basis will go up to 100k and maybe alittle more if some folks want the area and a more custom home. its going to be hard though with virtually every house owned by an Aussie who has put in renters. Buyer of homes by and large will not buy in areas of high rental density

Jay,
I will check out the link, however, I don't share your views on the Florida land opportunities. Partially yes, there's a ton of land inland (pretty much any county not on the coast) where land isn't worth anything at all.
The Cape Coral (I think that's what you meant when you said Coral Gables, which is an area in Miami) area still has very few lots selling for anywhere near $5K. The average sale now in Cape Coral (I'm talking the incorporated city and not including Lehigh Acres, and not including the swamp lands outside it) for a vacant building lot is $51.000, with the average in 2006 being $415.000.

You're right that if you are working on "the inside" of this business, you can ind SFH in the area, especially in Ft Myers for $20-$30K on occassion, although that'd be the exception and not the rule. We don't do a lot of stuff in FL still as we're focused on the high income properties, but I think for a long term investor, Cape Coral and FL in general present excellent opportunity.

We only need to look at where people are moving when it comes to retirement, and also now with the cost of homes so low, it'll take a while for land prices to go up, but I think over a 5-10 year period, it'd be hard to not make money.

Off course, if you buy a property with a 10-15% net income, you'll have been paid back all your initial money after 7-10 years, but a lot of investors prefer the multiple exit strategies and low maintenance that a land investment offers.

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Your the first one to quote 10 to 15% net returns for cash flow rentals. First time on this forum anyone has come close to what the true cash flow will be over time. All these claims of 15 to 20% NET cash flow are just wishful thinking as in wanting to beleive in the worst way it will be true.  Any US investor with any kind of experince will take gross cash flow and deduct 50% for long term operational expense's before mortgage payment. So if you paying cash for a property. just use 50% of the projected rent as your net income and then figure your net annual return. If you do a little better so be it. but over the long haul this is where it historically has fallen. If you have a nightmare tenant the Net cash flow can be zero or negative. If you are one of the lucky ones that has a tenant move in and stay 5 years and do all their own little repairs, then your return will go up. No property stays full 100% of the time. And no property can be maintained for 20 to 50 a month unless your planning on operating it as a slum lord.

Deciding where to buy property depends on so many different factors: Just to mention a few: budget, bias to cash flow or capital gain, how long you intend to hold onto your property for, risk profile (very important – no investment is worth losing sleep over), whether you plan to physically visit your property and how often…etc.

For long term capital growth places like Florida and Las Vegas should be on your radar. The issue with these places is that there are so many foreclosures that it will be some time until any gains are seen. Basic demand and supply! That said, we are seeing a pick up in parts of Miami from foreign investors who are having an impact on the market.

For income and some stability consider update NY or Kansas City. The issue with Kansas City is you really need to be extra careful about location.

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Only fly in the ointment with your deals is your grossly underestimating the operating cost and therefor your return on investment numbers are pure fiction. there is no rental in the US that hs NO VANCAY Facotor, and only 300 a year for MAINTAINANCE this is the high of folly and stupidity if someone thinks they can base the returns on these bogus formulas. Anyone can make these look good if you have operational costs at 20% or less of what they really are. For instance I know of one transaction this company sold to an Aussie for 94k  promised 1600 a month in rent. and a 12  .5 net return and 19 gross, who gives <moderator: delete language> about gross returns its all about net. Any way this Aussie closed end of Feb. the rehab was 15k and by looking at the U tube that was probably puffed up by 5 to 7k so contractor made a nice profit there. here we are 5 months later property is still vacant the rehab that We would have done in 2 weeks took them 2 months. So the return on investmetn on this one is probably going to be close to zero for the first year. And thse transactions repeat themselves. Because the Aussie investor wants to beleive who ever will tell them the best story on the highest return. once the property has sold the seller is down the road the Aussie is stuck and wondered what happend to that 12 to 15 % return that they will never see.

I have owned thousands of these you and your country men are dillisional and will never acheive these returns over any lenght of time maybe year one then they will keep going down and down, and those who bought upper mid west in the Hood and war zones they just through there money away because they were flat being gready thinking they could get some 10 to 20 % return.

Do YOU GUYS NOT UNDERSTAND that is these returns were real and consistant that the local US investors which there are many more of them then you Aussie would snag them and you would never see them

The US investor is indeed doing that and the Aussie is buying the crap by and large, and I would venture to guess that fully 50 % of Aussie investors will loose all their money investing in these <moderator: delete language> properties over the next 3 years.

Do not mean to be so  blunt but it is what it is I know. I have lent to over 1,000 of these , just google my name you will see.