Hi There,
I am new to the USA property market, infact I am yet to purchase my first property but am planning a trip in Jan 2012 to do so.
I have been doing a lot of research on where to buy and it seems there are a wealth of oppotunities it just depends on your stratergy. My stratergy is to gain a positive cash flow yield of around 10-15% and capital gains over the medium to long term. I can see this this is possible in many areas.
At this stage I have broken my areas down to 2 and have a few reasons why, see below:
Fort Myers:
This is where Steve and Tommy have been investing and I can see great potential in both cash flow and capital gains . Fort Myers seems to be growing in population and employment oppotunities are opening up more. My concern here is, is it too late?
Are there already too many foreign investors in this area creating too much competition?Fort Worth:
Fort Worth is home to many large corporations head offices and also the population growth is quite good, for this, and other reasons- there seems to be some good deals for both positive cash flow and capital gains here too.
My father has recently opened a branch of his company in the US in Forth Worth which will give me an advantage I believe as I will have access to his accountant, lawyer and realtor in Fort Worth, not to mention free accomadation whilst in the US. Also if something goes wrong I have the security of having one of his staff members on the ground in Forth Worth while I am thousands of miles away in Australia.
Can some one please help advise me on whether or not they think having someone there in Fort Worth is a worthwhile advantage or should I broaden my investment horizons to other states like Florida?
I appreciate your advice
Thanks
JaneHi Jane and welcome.
Just to give you my 5 cents worth….
As you have said, the US is a BIG place and each city has its good and bad points. I think that if you actually go to where you would like to invest as you are doing AND get good mentoring (as well as the relationships ie. attorney, accountant, realtor, banker etc) that come with this, then you will find good deals if you look hard enough.
Also, if you haven't already, I would suggest you also research your chosen cities on http://www.spotcrime.com as well as
http://www.city-data.com – their forums can also be interesting as the locals chat about zipcodes to avoid and the like…In regards to the comment about Fort Myers and too many foreign buyers. There are heaps of foreign and local buyers everywhere in the US. We obviously hear a lot about FM if you follow Steve and Tommy, but they aren’t the only ones. I don’t know much about Fort Worth but I am sure it’s exactly the same. You just have to Google the info and you info about South Americans Europeans buying up property.
I think one of the most important contacts you need in the area is the propety manager, it doesn’t matter to much about where everyone else is.
If I was investing out the USA or any market here would be my simple tips for all investors to follow.
1: Meet the TeamFind out who everyone is and understand their rolesKnow who are the people involved with this companyGet the facts2: Get referralsGet all the details from clients3: Property Management System( most important )for success with cash flow rentalsFor instance since you are in Australia you would want to know they have a solid system in their marketA: Repairs – how are they handled
B: Evictions – how are they handled
C: Payments – how are they handled and processed.
Monthly reports (P & L Statements)4: Real Estate Goals ( some thing every one needs )Have a plan -Without a plan of what you are doing and exactly what you want to achieve in real estate your goals will not be met. With goals in place this will help to build a real estate portfolio.5: Personally viewing the properties and the Team in actionView the property. I think all investors should at least fly out to view the markets and the homes they are thinking about purchasing. I would also try to go Monday – Friday. This helps to see how we they run there companies on a daily basis.Weekends are great, but no one else works on the weekend. So hard to really see what goes on in some areas.
To get a true feeling of things, Monday – Friday is when the action takes place.
Just my two cents but hope this helps
Sincerely
Alex FranksI really appreciate everyones feedback, thanks a lot.
LLCW I have not seen those websites yet they are great links, thanks.
More to take in and think about now…ALExSC wrote:If I was investing out the USA or any market here would be my simple tips for all investors to follow.
1: Meet the TeamFind out who everyone is and understand their rolesKnow who are the people involved with this companyGet the facts2: Get referralsGet all the details from clients3: Property Management System( most important )for success with cash flow rentalsFor instance since you are in Australia you would want to know they have a solid system in their marketA: Repairs – how are they handled
B: Evictions – how are they handled
C: Payments – how are they handled and processed.
Monthly reports (P & L Statements)4: Real Estate Goals ( some thing every one needs )Have a plan -Without a plan of what you are doing and exactly what you want to achieve in real estate your goals will not be met. With goals in place this will help to build a real estate portfolio.5: Personally viewing the properties and the Team in actionView the property. I think all investors should at least fly out to view the markets and the homes they are thinking about purchasing. I would also try to go Monday – Friday. This helps to see how we they run there companies on a daily basis.Weekends are great, but no one else works on the weekend. So hard to really see what goes on in some areas.
To get a true feeling of things, Monday – Friday is when the action takes place.
Just my two cents but hope this helps
Sincerely
Alex FranksGood info. and a great start to not getting ripped off
wholesale competition has definatly driven up the price in FM I bought 2 homes 2 years ago for 35k each at the court house steps those will get bid to 40 to 45 today.
Most off shore folks will get offered them at 65 to 100k each by the time the middle men put there profits in there and the rehabs are done.
My 2 properteis ended up going to Brits for 85k each.
Between me and 3 middlemen, the local FM agent, another middle man in the states and the turn key Brit company about 40k got divided up. after cost and rehab.
Do some serious research on FM. there are literally 1 million lots of record there, there is no shortage. See some of my previous post's regarding FM and leigh High and coral. I was on a government task force back in the mid 80's and Leheigh was the poster child in the US of how to handle huge subidivisions that were built with inadequate infrastructure for full build out.
You see that today in the assessments for UTilities can be as high as 20k per parcel.
Texas just watch out for property tax's and a very flat market. The market does not move either way in texas, they just keep building new.
JLH
I just wanted to comment on what Alex Francs said above, as especially points 1 & 4 really echo what I have posted in many other places on here.
First of all, you need to know who you’re working with. There are literally hundreds of “experts” out there, I’m not just talking about the new companies coming up in Australia almost every week, but also companies across the U.S. who love it when a foreign buyer comes to town. What Jay mentioned above happens a lot, we might be buying at x and selling at y after rehab, but by the time all the middle men have added their slice of the profit, the price to the end buyer has been hugely inflated.
Don’t be afraid to ask frank questions of the seller, and try to find out HOW CLOSE are you actually going to be to the “original seller”, will there be a lot of middle men, or do you get the best deal?
Also try to find out what they have done in the past, and how well they have delivered. If all they give you is a vague answer, or claim that they never have had a deal go south, then I’d be careful.
We have been in the business for a long time, and I’m the first one to admit that we have had deals that didn’t work out perfect, but we will always do what we can to minimise risk, and to assist the investors when something doesn’t work out.It’s been said before, but it’s the easiest thing in the world to be supportive pre-sale, and when everything is running smoothly, it’s when things aren’t going well, you’re going to need your partner there. (Sounded a bit more like Dr. Phil than intended – it was just meant as a piece of real estate advise)…
Number four – yes, right on the money!
We get so many people coming thru that wants to see every single deal although they haven’t decided what they want to achieve, and how they want to get there – and no matter how good we are at our jobs, we can’t decide that for you.We have several different programs, but they’re only right for a certain group of people.
Decide what you want – cash flow vs. growth, low- vs high risk, long vs short term. D
Don’t focus on the areas – you can achieve all of them in one city if you wanted to, focus on the end goal first, then you can find your way there, using your own research and reputable professionals if you choose.
Monthly reports (P & L Statements)
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