"I am still waiting though for folks to weigh in on my question..
"Stable markets Vs a vi Massively defalted markets to be or not to be that is the question.
I would really like to hear others thoughts on this… And rationalization for whatever postion you take."
Hi Jay
I think you have made some good points and I agree with your view.
It makes sense to purchase in areas in US that have been hammered, I believe you will have a better shot of uplift when the market recovers especially if you purchase properties well below the actual building costs.
Purchase at a lower entry level with cash flow opportunities now. Not some "pie in the sky" growth, who knows when that will happen.
As I mentioned in a previous post – "Where to buy "Houston or Atlanta", I stated that I did not see the point in purchasing in the US in areas such as Dallas, etc where the rental yield is no better than what can be achieved in Australia, why would you take the risk may as well play in your own backyard.
WI
jayhinrichs wrote:There ya go just what Alex and I have been preaching..If you go to our web site you will see address's nothing to hide
Jay I am seeing a different culture here.Some thing in the states we would never do.Again this is not the normal for us.If we wanted to invest in Australia, for example.I don't think you would find many that would pay fees to learn and get involved. On the flip side this seems to be the norm for Aussie clients wanting to learn about the USA.
I will say some of the groups I spoke with .They do way more for their clients then the USA sellers would do. I think the difference from what I am seeing is huge. Then again alot of this stuff we just do for our selves.( Not insulting any one just a different mind set).
Years ago when I wanted to get involved in Real Estate. I went to a lawyer office and got legal advice. Then went to an accountant and got all the future accounting advice. I then went to numerous real estate meeting to learn as much as possible. Yes I even paid for a few course back then. After that I found guys doing what I wanted to do. Asked advice went to bank and got started.There were many road bumps and lots of lost dollars. Many a frustrating nights.
So I think if you are charging a fee and truly care about your clients I am all for it.So I understand why they don't put the addresses on their web sites( If you take the time to help your clients and do everything they don't have time to). Which is still amazing to us in the States where information is easily attainable. Again different culture but Robert Kiaski spelled wrong has thousands of paid members. So I guess we do it here as well in the States.
I just hope that when you are charging the information you truly do take care of your clients. Look at for the best interest not just the dollar amount you can make with the gold rush in the states.
worldinvestor:
I would imagine what attracts the mum and pop OZ investor is the low price of entry… From what I know in OZ properties are like were I live here on the west coast and probably more akin to pricing in the San Francisco Bay area ( penninsula Side) Seattle and better parts of Portland were I am…
So I think if you can't really afford a OZ rental and you want to get in the property game people get in a trance thinking about the 20k house they can buy in KC.. sit back collect their rent and everything is great. They soon realize that the 20k house in KC is just like a 20k house in Detroit or INDY or St. Luis or Memphis… These are homes that are in areas that were very nice 20 to 30 years ago, they have suffered white flight. and now are minority rental areas pick a minority it does not matter. these homes have little to know upside ever, and are just a bear to keep rented and maintained etc etc.
So I think the attraction to Dallas and Houstan and Atlanta to a certain extent and what I have seen in Charlote with Alex. Is that you have much nicer newer homes….
Texas market did not deflate as bad as the other markets one reason is TExas is a mother on lending laws. You do not just walk away from a home in texas… The bank can and will sue you for the deficancy.. Not so in 11 other states its illegal for banks to do that or other states that they just do not choose to sue on the note… TEXAS they CAN and THEY DO… So the stratigic foreclosure is not as big an option as say Arizona or central CA.
I personally have never invested in Texas I go there often on my way to my markets…. I just know a lot of people that have and a lot of people that had horrible experinces… And other than houses flippers the average investor that by the time they buy from a Reno and marketing company they are basically paying retial.. And there is no up side….
I know one guy from SAn Joe CA. who has a nice business in Dallas, and they buy 125k to 150k houses that they make about 20 to 30k per deal on. those houses then rent for 900 to 1200 and they look nice…and they are nice. Just no Up side in them your already paying full market for them and the builders can compete with new stock and whats a buyer going to do. Pick you home that has been a rental for 10 years or this brand new home for the same money… Or very close to the same
So what I like about Atlanta is you take that same 125k Dallas home and we are all in at 50 to 70k… It sold new for 150… we are buying for far less than replacement cost. And I do beleive when all the properties get absorbed here over the next 5 years. and new construciton starts back up… New construction in these markets will be 125 to 150 for start… And these projest will pull our 50 to 70 homes up to within 20% of the new construction. there by doubling our money on capital growth. but buyer beware you buy in the wrong neighborhoods in Atlanta and or buy super cheap Atlanta and you will get the exact same experince you get in the other mid west town… troubles with rents and renters and no upside ever.
So thats how I rationalize it. Last thing on Texas the property tax's can just be monster big.. ONe needs to be very careful before they settle on a house there and get with the tax collector and see where your property tax's will be once the house goes out of Homestead or owner occuppied status to rental status.
jayhinrichs wrote:So thats how I rationalize it. Last thing on Texas the property tax's can just be monster big.. ONe needs to be very careful before they settle on a house there and get with the tax collector and see where your property tax's will be once the house goes out of Homestead or owner occuppied status to rental status.
Jay….I agree that taxes is something you need to look out for when you invest in Texas….I have invested in 3 so far and rejected quite a few because of the higher taxes for particular properties…..comes down to doing your homework. The Homestead exemption in Texas by the way isn't that big a deal and doesn't make that big a difference…..it's gives you $15,000-00 exemption on the assessed value for SCHOOL taxes only. Unless your over 65 or disabled then the homestead exemption is all that applies.
I guess everybody has their own investment "models" and property is not a one size fit's all approach. I am a bit younger and have time on my side….to me the power of leverage available to me from a US lender at rates below 6% ….it will see me own the property outright in less then 15 years. Once I collect rent…allow vacancy….taxes, insurance, maintenance, loan payments etc….I don't have to contribute a cent and will own it for my $40,000 down payment. This combined with the Texas story of jobs, and population growth just made me feel more comfortable when making my investments.
"So I think if you are charging a fee and truly care about your clients I am all for it.So I understand why they don't put the addresses on their web sites( If you take the time to help your clients and do everything they don't have time to). Which is still amazing to us in the States where information is easily attainable. Again different culture but Robert Kiaski spelled wrong has thousands of paid members. So I guess we do it here as well in the States".
Hi Alex
some of these companies selling to Aussies will charge $4000+ once this is paid it is only then will they provide addresses, this is wrong as you need to know what the company is purchasing, why the hell would you join if you can not do basic DD on what they are sourcing.I would never recommend that anyone pay a fee upfront to anyone without addresses. If the properties are great then there is no reason for this.
WI
No one can stop the unscrupulous but we can by give freedom of information and hoping they read it! The very nature of the "buy this property look how awesome it is" model is it rotates on SALES not back end. It just isnt, no matter what you think, the buy…
Flicked roughly the pages and someone said they have a broker, have a team, cut out the middle person etc… YAY YAY YAY… It just isn't that hard…TRULY…
Better yet… If you want to buy through a wholesaler go straight to the wholesaler of your choice… Cut out the dating agency who has less clue than you do from the few I have seen.
You don't need an introduction service to the US market. Redfin, Listingbook.com, Georgiamls.com, Trulia, they ALL will give you instant access to this market. EVERY agent will send you free daily listings.
Call ANY agent and interview them…. Ask them if they have reliable contractors who can renovate, ask them if they property manage… If they don't, call the next one… Save yourself a bucket load of money. Negotiate your property management fee upfront. Find a broker who holds the property management license as well. Pick up the phone and interview them. Many agents are starving at the moment. Say to the one you like, I will buy through you but I need a 3 year cut on the property management fees… I won't pay more than "x". Negotiate what it is to renew the lease (argue free), and to relet the property (again, argue free… Pushes them to find a GOOD tenant straight up). Make it contingent on your business going there. Be honest… They will be too because they are licensed and risk their livelihood here. They may not negotiate and you may be fine with that but you will hear their answers and decide for yourself. Real estate brokerages are licensed to the hilt here, they risk EVERYTHING if they mess with you. A random stranger in Oz??
Ask them to give you the names of 3 contractors and have them bid on your job.
ORRRRRRR, pick up the phone and talk to a legitimate wholesaler. They will give you property addresses, names for contractors and charge you ONE markup fee.
See post on. 120k USA thing re Section 8. Depends on State.
If you are paying a fee, please don't pay it to someone who isn't doing anything other than introducing you to a real estate agent or wholesaler.
I love Portland … I worked with the gods of urban planning from there… George Crandall and Don Arambula of Crandall Arambula. What a great city…
…don’t ever pay anyone an upfront fee!
Emma I would re think the statement about negotiating with a RE agent to manage homes and "if you will manage them for next to nothing I will buy homes from you"..
Your negotiating with a RE agent who may be starving and has never managed a property before.. He agrees to do this management as you state… they last maybe 3 to 6 months B/C management is a specialty and to manage a handful of properties is really not feasable for the average Agent… for easy math 3 houses rents 1000 and you negotiate them to 7% maybe so thats 210 a month… Any agent worth working with would not be very excited about 200 bucks a month and all the work that goes into screening leasing taking maintenance calls calls from the owner e mails etc etc. Just really do not think this would work out in the real world..Real estate agents come and go.. Also your inviting a robbing Peter to pay paul scenerio now you have an agent who may be not doing well and 3k comes into their account and now they have to pay their mortgage and their goes your rent money… I know I have had it happen to me personally with this exact scenerio a RE agent I was buying GOZONE new construction from and letting her manage them.. She ended up owing me over 5k..
Anyway… Your right about sourcing properties one can easily go to any agent and get them to e mail you listing every day. There are software systems US agents use that you just load in what the client is looking for and an e mail goes out daily with the new properties on MLS every agent has this.. I get 10 a day from all over the country when I am checking out markets…
Like I want a place in Vegas right now to get out of the NW winter… Call an agent get e mails generated daily on my criteria easy.
I think the turn key has a place when it comes to rehab though… Just calling contractors to bid on jobs when you live in OZ your defiantly taking a huge risk there,, One on quality of work and 2 on grossly overpaying….You talk about sending money to someone that will just walk away with it…
I think its more flushing out the team you want to work with let everyone make a little money and off you go.
Some states you need a RE licnese to manage and a Brokers to boot not just any agent can manage. here in Oregon its a seperate RE test altogether and different license… Indiana you need no license, you can just hold yourself out as a manager.
And actually I work with on thats pretty good in a little town north of Indy that I buy and hold in. He is retired constractor and his wife does the books they have about 30 of their own houses and manage about 50.. They don't have a web site and takes a day or 2 to get a call back, but they are decent folks and honest and do a nice job.emma171 wrote:I love Portland … I worked with the gods of urban planning from there… George Crandall and Don Arambula of Crandall Arambula. What a great city… …don't ever pay anyone an upfront fee!Oregon land use laws are the most complicated over thought out of date zoning laws. but liberal Oregonians love them and they brag all the time about how the Oregonian zoning laws are the toast of the entire country . They are so good and admired that not one state has even remotely copied them…
but on the hand… We did not get totally over built so our values though down 30% to 50% in some areas a lot less. did not crash like other areas that saw prices fall 60 to 80% which is still hard to fathom, but it is what it is and now is the time to buy.
The play in oregon is land in the path of progress
worldinvestor wrote:"So I think if you are charging a fee and truly care about your clients I am all for it.So I understand why they don't put the addresses on their web sites( If you take the time to help your clients and do everything they don't have time to). Which is still amazing to us in the States where information is easily attainable. Again different culture but Robert Kiaski spelled wrong has thousands of paid members. So I guess we do it here as well in the States".Hi Alex
some of these companies selling to Aussies will charge $4000+ once this is paid it is only then will they provide addresses, this is wrong as you need to know what the company is purchasing, why the hell would you join if you can not do basic DD on what they are sourcing.I would never recommend that anyone pay a fee upfront to anyone without addresses. If the properties are great then there is no reason for this.
WI
All I can say is I love reading your post here . I hope more people see this.
Internet is simple access for any thing you need and it is free.
Alex
The Aussie companies are not the only ones who charge up front.
this one company from Utah they are the back end boiler rooms for the Robert Kosiaki's of the guru world.. Armando Montolongo, bob diamond ,,, and others.
their site is http://www.myreostore.com they want 10k up front to look. You get 3 back on each house you buy.
they are using little to no care in what markets they buy and what property they sell. they sold off a few of my REO's i had in Indiana that I did not want to keep so I know how they present and what they make… they want to make 15 to 20k a house period.
I had this really tidy 3 plex that I sold them for 30k after I had done a nice rehab on it. they sold it for 57k. Double escrowed it and walked with 27k profit. But that LLC needed cash and they do bring in the buyers. They have over 100 people working the boiler rooms. It starts with a free seminar,, upsold to 3 day crash course,, then upsold to 10 to 20k mentor program…
Not sure if people do this type of up sell in Oz or not. But it can cost a property buyer 25k or more before they even buy their first property that they will pay far too much for.I saw 2 homes that they sold in one of my markets. and with in 120 days the houses we empty and trashed.
"So what I like about Atlanta is you take that same 125k Dallas home and we are all in at 50 to 70k… It sold new for 150… we are buying for far less than replacement cost. And I do beleive when all the properties get absorbed here over the next 5 years. and new construciton starts back up… New construction in these markets will be 125 to 150 for start… And these projest will pull our 50 to 70 homes up to within 20% of the new construction. there by doubling our money on capital growth. but buyer beware you buy in the wrong neighborhoods in Atlanta and or buy super cheap Atlanta and you will get the exact same experince you get in the other mid west town… troubles with rents and renters and no upside ever".
Sounds good to me.
I would say another major lure to Texas is the fact that foreign investors can source finance at an attractive rate.
What I think is incredibly scarey about this one is that the investor receives a "bank valuation" and assumes this must be spot on, how could you possibly take this seriously in this current market of foreclosures, short sales, foreigners paying over the top prices.
Zillow may not be perfect and I am told it generally overstates the sale price, but alarm bells must be ringing if you are paying $50K over the zestimate. Build cost today and how much you pay per sq ft is one way of keeping the figures real.
Also, what about the investors purchasing in Texas actually taking over a mortgage, I really don't get that one, common sense would tell you that you are paying too much for the property in the first instance.
WI
Can anyone refer me to wholesalers of properties in Atlanta and KC?
worldinvestor wrote:"So what I like about Atlanta is you take that same 125k Dallas home and we are all in at 50 to 70k… It sold new for 150… we are buying for far less than replacement cost. And I do beleive when all the properties get absorbed here over the next 5 years. and new construciton starts back up… New construction in these markets will be 125 to 150 for start… And these projest will pull our 50 to 70 homes up to within 20% of the new construction. there by doubling our money on capital growth. but buyer beware you buy in the wrong neighborhoods in Atlanta and or buy super cheap Atlanta and you will get the exact same experince you get in the other mid west town… troubles with rents and renters and no upside ever".
Sounds good to me.
I would say another major lure to Texas is the fact that foreign investors can source finance at an attractive rate.
What I think is incredibly scarey about this one is that the investor receives a "bank valuation" and assumes this must be spot on, how could you possibly take this seriously in this current market of foreclosures, short sales, foreigners paying over the top prices.
Zillow may not be perfect and I am told it generally overstates the sale price, but alarm bells must be ringing if you are paying $50K over the zestimate. Build cost today and how much you pay per sq ft is one way of keeping the figures real.
Also, what about the investors purchasing in Texas actually taking over a mortgage, I really don't get that one, common sense would tell you that you are paying too much for the property in the first instance.
WI
WI taking over mortgages unless there is a formal assumption which really does not happen in the SFR realm at least in the last 20 years. will open the new investor up to the loan being called due and payable at the banks option. Now if they are originating a new loan to you as in purchase money loan then your fine.
As I said in other posts there are new equity skimmy laws that preclude buying a house from a homeowner who is in foreclosure and just taking title subject to their loan…they are entitled to equity and a licensed forelcosure specialist has to do the paper work and represent the seller only.. this can be attorney , cpa , mortgage banker, certain RE brokers.US citizens are getting nailed on this scheme right and left right now…. And one poster said he knew of some OZ investors that look like they are loosing their downpayment and the homes are being taken away… Buy all cash or new originated loans and no problems. take over existing loans that are in default huge issues one needs to be aware of and navagte correctly.
worldinvestor wrote:I would say another major lure to Texas is the fact that foreign investors can source finance at an attractive rate.
What I think is incredibly scarey about this one is that the investor receives a "bank valuation" and assumes this must be spot on, how could you possibly take this seriously in this current market of foreclosures, short sales, foreigners paying over the top prices.
Zillow may not be perfect and I am told it generally overstates the sale price, but alarm bells must be ringing if you are paying $50K over the zestimate. Build cost today and how much you pay per sq ft is one way of keeping the figures real.
Also, what about the investors purchasing in Texas actually taking over a mortgage, I really don't get that one, common sense would tell you that you are paying too much for the property in the first instance.
WI
WI,
You seem to make the assumption that everybody and anybody can get finance anywhere in Texas based on the above statement. Believe me finance for foreign nationals is not an easy thing to achieve ANYWHERE in the USA and you will find that it is available only in small pockets. My lender for example is only interested in North Dallas because that is the area they operate in and are familiar with. If I presented a property in Houston to them they are not interested…..(I have asked).
The investor doesn't receive a "bank" valuation as you incorrectly assume. You need to do some research on the valuation processes and what acts of law they need to follow in the USA before you make ignorant comments based on no foundation. Banks appoint companies to order appraisals on their behalf…they are not "bank valuations"…they are done by independent appraisal companies and a professional appraiser really wouldn't find it too hard to separate normal market sales from foreclosure sales…they do speak to people as part of the process you realise….people like real estate agents !!A very good friend of mine has been buying property in Atlanta…he got hard money finance at 50% down and is paying 11%. The hard money lender did an appraisal and that backed up what he had paid…he got a 22 page report which shows the comparable sales. So are you saying all appraisals are flawed no matter what city your in ??
And Zillow….really….your comparing a free online appraisal process to a proper recognised valuation. Zillow and Trulia can be miles apart with figures so which one should I base it on.
Hi Speedy
I stand by my statement regarding US market – its basket case and I would personally would not rely on appaisals etc . Personally the only way of knowing whether you have purchased at real/market value is to work out how much it costs to build per sq ft and how much you actually paid per sq ft.
I agree, zillow, trulia etc are only tools as I mentioned in another post, far from perfect, however it does provide useful information ie county rates, rental returns, I guess similar to realestate.com which I use all the time when searching Oz properties as I am sure most do.
WI
Clarification on Property management… I did mean INTERVIEW them…maybe a bit exuberant… I am merely saying that you will probably start with someone wanting to milk you and charge exorbitant fees and it isn’t that hard to get something better. Mind you I have had assumptions that people would do far more due diligence so will stand corrected.. Please make sure you are dealing with experienced PM companies when interviewing….. = )
$ per sq ft…. Be a bit careful… I know what you mean but as I said to someone in Vegas once…I can show you $19 a sq foot .. Doesn’t mean you should buy.. It may never rent and should be bulldozed!
kingsr wrote:Can anyone refer me to wholesalers of properties in Atlanta and KC?With out saying names ,read the post on this Forum great people in both Markets. I was in Atlanta but pulling out.I can PM you some names their if you would like.Great market just choosing not to buy their.
Talk soon
Alex
$ per sq ft…. Be a bit careful… I know what you mean but as I said to someone in Vegas once…I can show you $19 a sq foot .. Doesn't mean you should buy.. It may never rent and should be bulldozed!
Of course you are looking at a homes that are in a good neighbourhood/subdivision and you would be looking at construction no more than 10 years.
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