- morpheusbushy wrote:Sorry, don't have any.
Arrrghhh … you mean I have to do my OWN ??? lol
Actually, I have already begun and San Antonio is where my heart is
)))Marg
Perthgurl65 wrote:Arrrghhh … you mean I have to do my OWN ??? lol
Actually, I have already begun and San Antonio is where my heart is
)))Marg
Great, share your research!
Hello all, thought I'd drop a line here to say that hubby and I will be sharing our experiences of purchasing IPs in Phoenix AZ and Kansas City MO on this thread… if anyone has anything to say about either of these areas we'd be interested in the good, bad and ugly
morpheusbushy wrote:Perthgurl65 wrote:Arrrghhh … you mean I have to do my OWN ??? lol
Actually, I have already begun and San Antonio is where my heart is
)))Marg
Great, share your research!
Ok … here is some info that I've come across so far that has been appealling to me. I am so flat out with other things atm(and it's 2am) that I haven't analysed it too well yet, and I haven't written anything about the demographics …. next time !!!
Darn … the data charts at the bottom are going to change their format once I save this post …. not too hard to work out the info tho (it's my favourite part of my research) Having a bit of trouble finding statistics for foreclosures … any assistance would be much appreciated
Here goes … hope I'm not rambling on too much; and I hope you enjoy the info as I haveSan Antonio is expected to be one of the Next Big Boom Towns In The U.S.
According to Forbes mag of 6 July 2011 " Many of our top performers are not surprising…. No. 1 Austin, Texas …Of course, Texas metropolitan areas feature prominently on our list of future boom towns, including No. 4 San Antonio, No. 5 Houston and No. 7 Dallas, which over the past years boasted the biggest jump in new jobs, over 83,000. Aided by relatively low housing prices and buoyant economies, these Lone Star cities have become major hubs for jobs and families".“In San Antonio, the homes for sale inventory has decreased markedly. That means less competition for sellers and fewer opportunities for buyers.
Also, 2011 has seen the return of the area's typical 2% to 3% home value appreciation rate. That means sellers are less likely to consider low ball offers and more likely to expect a sales prices that are closer to their asking prices. Consequently, in the near term, buyers can expect to encounter less seller flexibility and harder negotiations.
Why is San Antonio's realty market so much better than most of the Nation's other large cities? Clearly, San Antonio has weathered the late great recession very well. The area's past economic and demographic trends and its long term projections reflect a large and vibrant metropolitan area with a strong, stable, and growth oriented personality”. ~ Stephanie and Randy Kelley, Realtors® of Keller Williams Legacy, San Antonio, Texas1st Quarter, 2011 Housing Statistics: San Antonio, Texas
HOUSING MARKET FORECAST
Trend Forecast: UP
Forecast Accuracy: 75%
ForecastChart.com publishes forecasts for the trend in the annual appreciation
rate of home prices in 380 Metropolitan Statistical Areas. The House Price
Trend will be either UP or DOWN. The forecast for the trend in the San Antonio
housing market for the 12 months ending with the 1st Quarter of 2012 is UP.
The Accuracy of the Trend Forecast for San Antonio is 75%. In other words,
when tested against historical data, the forecasting methodology was correct
75% of the time. Accordingly, ForecastChart.com estimates that the probability
for rising house prices in San Antonio is 75%. If this Housing Market Forecast is
correct, home prices will be higher in the 1st Quarter of 2012 than they were in
the 1st Quarter of 2011.MARKET SUMMARY
1st Quarter, 2011 Housing Data: San Antonio, Texas
Historical Home Price Appreciation
Last Quarter -0.36%
Last Year 0.4%
Last 5 Years 12%
Last 10 Years 45%
Last 20 Years 106%
Decline From All Time High 2.42%Annual Home Price Appreciation Rates
1981 38.69%
1982 -15.49%
1984 14.42%
1985 -8.21%
1993 6.41%
1994 0.09%
2007 6.56%
2008 -1.31%
2009 0.47%
2010 0.29%Real Estate Appreciation, Rank & Percentile
Last Quarter -0.36% Rank: 52 of 381 (86th Percentile)
Last Year . . . . . . . . . . . . . . . . 0.4% Rank: 66 of 381 (82nd Percentile)
Last 5 Years 12% Rank: 25 of 381 (93rd Percentile)
Last 10 Years . . . . . . . . . . . . 45% Rank: 84 of 381 (78th Percentile)
Last 20 Years 106% Rank: 113 of 346 (67th Percentile)
Decline From All Time High 2.42%
San Antonio appreciated -0.36% in the Last Quarter. At that rate, the San Antonio Real Estate Market was ranked
52nd out of 381 metropolitan areas for Real Estate Appreciation. San Antonio was in the 86th percentile. So San Antonio, TX performed better in the Last Quarter than 86% of the 381 metropolitan areas covered in ForecastChart.com.MARKET HIGHLIGHTS
1st Quarter, 2011 Housing Statistics: San Antonio, Texas
The all time high in the San Antonio Home Price Index was 178.1 in the 1st Quarter, of 2009.
The 1st Quarter, 2011 index value was 173.8. That's a decline of 4.31 points or 2.42% below the San Antonio Home Price Index all time high. The Home Price Index indicates that the San Antonio Market is up 45% over the last 10 years. Home prices in the San Antonio Real Estate Market have gained 0.45% over the last 12 months. Over the last thirty years, it is up 119%San Antonio, TX Market Statistics and Real Estate Trends at 01 August 2011
San Antonio, TX August 1, 2011
– San Antonio's home resale inventories decreased slightly, with a 1 percent decrease since July 2011. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in August. The median listing price in San Antonio stayed the same from July to August. There were a total of 146 price increases and 1856 price decreases.
San Antonio, TX Market Snapshots
All Homes
? ? Today
1 Month Ago
6 Months Ago
1 Year Ago
2 Years Ago
Total Inventory
7759
7833 1%
7365 -5%
8439 9%
–
Median List Price
$163,000
$162,500
$149,500 -8%
$158,600 -3%
–
Median Days
on Market75
73 -3%
96 28%
75
–
Median House Size
2012
2008
1894 -6%
1948 -3%
–
Median Price
Per Sq. Ft.$83
$83
$81 -2%
$83
–
San Antonio, TX Market Data Chart
All Homes
? ? 9/10
10/10
11/10
12/10
1/11
2/11
3/11
4/11
5/11
6/11
7/11
8/11
Price Reductions
1883
1751
1340
1166
1412
1413
1732
1755
1849
2014
1856
451
Number of
New Listings1797
1756
1383
1443
1725
1645
2205
2198
2099
2043
2045
445
Listings
Sold/Expired2241
2210
1678
1986
1939
1767
2248
2163
2192
2264
2251
496
I have been involved in the San Antonio property market since 2005. I even ran a real estate firm there in 2006. In the top 10 predicted cities all 4 cities in Texas are in the top 10 with Austin at number 1 and San Antonio at number 4. Both cities are 110 km apart. Why buy in bad areas when you can invest in a safe market. <moderator: delete advertising>
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:I have been involved in the San Antonio property market since 2005. I even ran a real estate firm there in 2006. In the top 10 predicted cities all 4 cities in Texas are in the top 10 with Austin at number 1 and San Antonio at number 4. Both cities are 110 km apart. Why buy in bad areas when you can invest in a safe market. <moderator: delete advertising>Hi Nigel
LUCKY YOU !!! I love San Antonio … I have never been there,but, whatever new thing I learn about the place makes it even easier to love it even more
I am 'green' in property investment, and I need all the information I can get, so I appreciate your helping me to learn what I need to know to do it well …. thank you
(There's a few other treasures I've come across who I look forward to chatting with too ~ give yourselves a pat guys … you know who you are !!!) lolI'm specifically interested in foreclosures for the simple reason of cost savings; but I can't find a data base that give statistics … can you also help me with that?
Can I ask why you opted out of the r/e firm ?
Thanks again, and I hope it's a happy day for you
MargHi all, firstly I must advise that I have a vested interest in posting on this forum as US Property Invest sources and consults on properties for Australian investors looking to invest in the US market.
So where to buy? An extremely important question, and there is so much information out there that it can, as one poster put it "make your head spin," so I'll try and keep it simple. Firstly you need to look at the purchase price to net returns ratio, or simply ROI. Then look at the potential markets and narrow it down to only those cities that have good core economic fundamentals. A key indicator of this is the unemployment rate, has it been steady over the last year or two, or has it increased or decreased? What are the main and supplementary industries of the city and what is the potential for improvement or decline of that economy.
Okay so let get down to specifics. There has been mention of Kansas City being a good place to invest your money, and I would have to agree. Why? Basically because the cap ex for a tenanted, fully rehabbed property, with defect free warranties etc is only $40k to $50k and the nett return is often still north of 17%. But importantly because Kansas City is the urban hub of the rural or bread basket area of America, an economic segment that is somewhat insulated from the economic woe of Greater USA. I also agree that Indianapolis is emerging as place to invest for the reason already given by others. But there are also other cities that provide good ROIs and economic stability. For example I have seen no comment on this forum about Columbus Ohio. Now, I would not put my client's money in many, if not most other cities in Ohio, but Columbus is one that I would. Apart from being the Capital of Ohio, and therefore providing a lot of Government employment it also has the largest University in America – Ohio State University, which directly employs 52,000 people, and indirectly many 100,000s more, and in essence this has kept the unemployment rate stable and significantly below the US average, and will continue to do so.
However, how we wish it was as easy as just picking a city, because of course in each city there are good neighbourhoods and bad neighbourhoods, good streets and bad streets. So how does one know unless they have themselves spent several weeks in that city doing nothing but researching the property market and the neighbourhood in question? Well, if anyone on this forum has used a US buying consultancy firm in Australia or NZ that they are comfortable with and which has provided them with good results and service then stick with them. For all others unable to put in that sort of time for a $45k investment and considering using a consultancy firm for the first time or switching firms then I would suggest as a minimum that the firm have there own employees on the ground in that US city checking out every property and neighbourhood that is offered, and backing up their findings with a report, not just a report on the building in question but also on the socio economic factors surrounding your investment. Not an agents report or word for it, not a wholesalers recommendation, not something from a client manager in another US city, but their own employee, preferably with a qualified building certificate, physically checking out the property and the neighbourhood and vouching for it. Furthermore, insist that all purchases have a separate independent building and termite inspection done and that anything found during the inspections is fixed at the Seller's expense, and then that they give as a minimum (written into the purchase contract) a 3 month warranty from any defect or maintenance issue. Yes it can be done! So, I guess I'm saying that knowing where to buy in the US is extremely important, critical even, but the buying decision is so much greater than just knowing where to buy. There is for example the type of property, the property management arrangements, the legal checks, the US accountancy compliance and so much, much more. Yes, investing in US property can be rewarding, I have more than a dozen US properties myself, but it can also be a minefield, and anyone considering buying in any overseas location should consult one on one, face to face, with someone that has done it many times before and is familiar with all the pitfall that can befall the unsuspecting Aussie investor.
I think previous poster (Rob) pretty much nailed it, and I think I remember I've made a number of similar comment on similar threads. As some of you probably know by now, I also have an interest in US property – I am the CEO of a U.S. based asset manager that sell a lot of properties to foreign investors, and we work with a number of both direct investors as well as agents from Australia. I've done this since I was 18 years old, so I'd like to think I've got a decent idea of what's happening:-)
We operate nationwide in buying bulk portfolios, and some of the properties will be rehabbed for rental, and those are the ones we sell, with a cash flow, to investors. I have my "favorites" across the country, although to avoid being branded as an advertisement, I won't go too much into detail.
The point I wanted to make is, you can't really select one area over another using a "blanket" statement – which is something I see done time and time again by "buyers agents" both in Australia and outside. They'll say stuff like "we only sell Buffalo cause unemployment is low, but we won't do Indianapolis cause unemployment in Indiana is higher than in the 90's" and any similar statements like that, without (in many cases) never even been to visit the place more than once, and with very little knowledge about what's actually happening.
In it's simplest form – would I take West Palm Beach over Toledo? Sure I would… But would I take a house in one of the worst areas of Palm Beach County (Pahookee, Belle Glade) over a house in one of the nicest streets in Toledo? No, I don't think so.
I have visited Australia three times – and I've been told many times over that Sydney is maybe the nicest place in the world, and that might well be true – it's awesome. But it doesn't mean that there weren't times when we were travelling around Sydney, that I didn't feel a little bit "on edge". That is the same for our American cities as well.
You can absolutely look at the macro statistics – is there a large employer moving to the area, is there general growth in population, are they predicting growth in property values/birth rates/immigrant arrivals etc, as that will affect the GENERAL area that you're looking at.
Then you need to look at YOUR specific target property (like Rob also pointed out, not trying to steal your light here…) and it's IMMEDIATE surroundings. Are there boarded up homes there, where is the boundary between school districts (hugely important in low- middle class areas, as the kids aren't likely to be in Private schools, and public school districts vary hugely between different suburbs) is there a bus route (yeah, we use them (I think..) especially in low- income areas) and the list goes on….
What type of tenant is it, how was he screened, how are the payments made, who is managing the property?
You'll be shocked to hear that Detroit is one of our most successful cities to date. No, not the "$1000 homes" Detroit, but the "North of 9 Mile, working for a living, trying to clean up the image of this city" Detroit, where properties can be bought for a low price, be rented Section 8 to a GOOD tenant, and you can get ALL the insurances you would normally buy. That's a free tip from me – if you can't insure it, it's probably in the hood.
Another one is Indianapolis – but then again – IN POCKETS, it's a great opportunity. In other areas, it's just as bad, if not worse, than downtown Detroit. We can go all day, and discuss these different cities.
So my advise there is look at the MICRO aspects – who are you using for the purchase, who will manage the property, what type of rental is it – and go from there…
My second point I wanted to make, and this might be counter intuitive – but once YOU have found something that fits your parameters, and you are in a position to afford to do so – buy it!
The simple fact is (and kill me if I'm wrong…) but you'll never find a "sure thing". There's always going to be one or two things about a deal that you're not comfortable with. Whatever that might be – either try and fix it, or if it's something outside your control, decide wheter you can live with that or not.
If you will lose sleep over it, move on, if you can live with it – go ahead and do the deal.I just see a lot of people who get so caught up studying everything from Governments plans for the future, to the predicted future of the Dollar and really ANYTHING, related or un related to the actual investment, that they get so worked out from it that they never make the purchase. I don't mean to sound like a salesman, but if you find something that fits all you need, why wait?
So to sum it up (if you're still here – thanks!) decide EXACTLY what you want (cash flow vs growth prospect) how you want to do it (pay an Australian firm vs free research) what price range, how long you want to hold it, and then work out who you are as an investor. At the end of the day, neither me, nor any Australian agent can know what you really want and desire, although once you have figured that out for yourself, we're all more than happy to help.
Some really good points in these last two comments. I have seen a lot of past comments from people who just can't make it there. We did go and visit some cities recently and were reassured that a) the houses do exist and this is not a scam
b) The most important item on the list is someone who you know and can trust to manage the house(s).We spent too much time on zillow and google, not really getting the right info (but google does show if there are other houses around it and any other features.) when we visited, we focussed too much on whether the houses were what we wanted to live in – that is not the issue. If it is what tenants are happy to live in and in a neighborhood where they look after houses – all is good.
We would like to buy more houses, but in a SMSF. Very difficult getting correct info on ATO compliance on whether a SMSF can borrow money overseas. We have formed a company and an LLC with the SMSF, but info is hazy. Non compliance will cut right across ALL SMSF investments not just the US ones. Anyone done this and feel comfortable?
Not sure what the latest economic bump will do, but they will still need houses to live in and rent – more so if more owners lose them. We will try for section 8 tenants where possible.
good luck to all while we can do this.
I may be in Australia but my business partner is in San Antonio. Also I do not deal with real estate agents.
Frankly I have been doing this for 5 years and am more than happy with the results of my clientsNigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
krefter – I can't help you too much with regards to the SMSF, we've had Australian buyers buying both residential (rental) properties, as well as land lots using their Superfunds (but thru a US LLC) although I can't tell you what they had to do to comly with the regulations.
Very true also about not looking at "if this is a place you want to live in" – most likely, if you're in a position to buy a portfolio of 40K homes, you're not in a position where you'd need to, or want to, live in one of them yourself. But the point is, like you said, that there are plenty of people that are willing to live like that.
Krefter, I can help with your SMSF situation, or at the very least put you on to someone, an accountancy expert in both Australian and US matters, that can help you through the taxation queries you have. Contact me through my website.
Apart from this I am in full agreement with HighIncomeProperty and the comments posted at 12.10 am on Aug 11. Good advice indeed.
New article from CNBC if you are thinking about Texas, talking about Rick Perry, job creation, booming oil business… http://www.cnbc.com/id/44155708
An older (1 year) article talking about tighter lending restrictions in Texas and how they largely avoided the exponential growth and then sudden collapse of its housing market… http://www.cnbc.com/id/36134970/?The_Lone_Star_Secret
The left are already attacking Rick Perry. What is laughable is that Obama is trying to take credit for the jobs growth in Texas.
Perry has been Pro business, for instance he approached Toyota and offered them a 99 year tax break to relocate there Truck division to San Antonio. As the second plant opens they will employ more than 6000 people. This is a direct result of Perrys leadership. I think he stands a great chance of winning the nomination and then the presidency.Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
The Phoenix market has been heating up throughout the summer, yes pun is intended. The investor market is very active with wholesale prices up about $15K since the first of the year. Retail prices remain flat as yet, but it does look as if we have hit the bottom of the market. Available inventory is the lowest in years and sales each month are at all time highs. Banks do still have a high number of homes in the foreclosure pipeline but they seem to have realized flooding the market is not a good thing.
So many people have ruined credit due to foreclosure they are unable to obtain a new mortgage so are renting single family homes. Vacancy rates in phoenix are sitting at 5%. Having said all this I agree that reaching a true ROI is important. When all true costs and vacancy average is factored in, 8% to 12% is a valid range for a good investment. It is important to ask for an itemized account of all costs, including rehab and agent fees.
Phoenix is a great market as the prices are at the bottom and the economy is trending up (retail sales up 7.5% this month). Capital growth should be good over the next few years.
Another positive for markets like Arizona, Las Vegas and Florida are the high number of newer homes. The number of homes constructed this decade significantly contributed to the crash, but they are available now in large numbers. These homes require less maintenance and typically lower rehab costs . Again it is important to have a good agent on the ground to make sure that the home has not suffered significant damage from the previous owner as they were evicted, or from vandals if the house has been vacant for some time.
Trentjr wrote:The Phoenix market has been heating up throughout the summer, yes pun is intended. The investor market is very active with wholesale prices up about $15K since the first of the year. Retail prices remain flat as yet, but it does look as if we have hit the bottom of the market. Available inventory is the lowest in years and sales each month are at all time highs. Banks do still have a high number of homes in the foreclosure pipeline but they seem to have realized flooding the market is not a good thing. So many people have ruined credit due to foreclosure they are unable to obtain a new mortgage so are renting single family homes. Vacancy rates in phoenix are sitting at 5%. Having said all this I agree that reaching a true ROI is important. When all true costs and vacancy average is factored in, 8% to 12% is a valid range for a good investment. It is important to ask for an itemized account of all costs, including rehab and agent fees. Phoenix is a great market as the prices are at the bottom and the economy is trending up (retail sales up 7.5% this month). Capital growth should be good over the next few years. Another positive for markets like Arizona, Las Vegas and Florida are the high number of newer homes. The number of homes constructed this decade significantly contributed to the crash, but they are available now in large numbers. These homes require less maintenance and typically lower rehab costs . Again it is important to have a good agent on the ground to make sure that the home has not suffered significant damage from the previous owner as they were evicted, or from vandals if the house has been vacant for some time.Thank you for posting reality I have been preaching 7 to 10% NET returns and I know this is a fact. But have basically been Booed off this forum. Lots of day dreamers there in OZ
jayhinrichs wrote:Thank you for posting reality I have been preaching 7 to 10% NET returns and I know this is a fact. But have basically been Booed off this forum. Lots of day dreamers there in OZThat is sad to hear! I agree, many people have wayyyy over-the-top expectations about nett returns – most don't take in to account vacancy rates and even re-letting fees.
I am confident of getting at least 8-10% nett return this year on my recent purchase taking in to account almost everything – the one thing that I will do not account for is my LLC set up (@ $2,500) which I will use for multiple property purchases.
morpheusbushy, thanks for starting this very interesting thread. I know it's been a while since anyone has posted but wanted to ask a couple of questions specifically relating to the information contained herein. I see from your blog you have purchased your first property in the USA. Looks nice, but you haven't posted for a while so I hope all is well
Would be very interested in hearing how it's all going.jayhinrichs, I have looked at your website and you appear to have an interesting business model. I do have a couple of questions however. On your success stories page, you list some properties such as this one below:
836 Eagles Nest
Monthly Cash Flow: $309.16Investor Equity Day 1: $20,000 Note Price: $53,000 ARV: $93,000 Loan to Value: 57% Interest Rate: 7% How does this work exactly? Investor equity day 1 is $20,000 – is this half of the purchase price of the property? Note price is $53,000. Would it be correct to assume the note price is half the purchase price plus closing and rehab costs? ARV is $93,000 – where does this valuation figure come from? Is it backed up by MLS sales or an appraisal value? I think the model is quite clever but my concern would be that the actual sales price that the property would achieve on today's market may not be $93k. Perhaps there will be capital growth potential over the 5 years until note expiry, perhaps not and perhaps the US market has further to fall. It's difficult to predict in the current economy no? We'll be in the US mid next year so might swing by and say hi. You also mentioned you had a buy and hold strategy on some land. Would be interested in exploring further. I'll PM you with my email address.
We have been umming and arring about purchasing in the US for the past year and a half. At first we were attracted to the potential rental yields but digging further we were put off by the horror stories of people paying too much, tenants and property managers from hell. We are still interested in investing but don't want to make a terrible mistake with our retirement money.
In terms of where to buy, it seems everyone has quite strong opinions and with the US being such an enormous market it is very difficult to know where to start looking.
Thanks everyone for your comments on this. It has made for enjoyable Christmas holiday reading.
FYI: CFG also operates in Atlanta / Georgia.
Where to buy in the US is dependent on so many factors. The first thing we ask is “what do you want to achieve?” and work from there. There are so many market which is why we diversified our service locations to cater for different types of investors.
)))
Monthly Cash Flow: $309.16
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