I am about to purchase through American Real Estate Investments. I found two houses that were 5.5k cheaper than what was advertised on another broker account. Not only did the broker add his 3k fee, but his purchase price was 2.5k higher than what was for sale on AREI property list.
You mean- should you continue because they sound good as they are $5.5K cheaper? Doesn't AREI charge a fee?
Where is the house? What's the overall cost? what's the reno cost? How long will it take? What's your net cash flow? How much under current market price is it? what's the rental demand? How much rent will you get? How long will it take to rent? How much is the management fee?
I have just closed on two properties with AREI. Received my first rental payment the other day. So far so good! They were very helpful and also helped me set up my own SMSF.
Is it a conincidence that the 2 positive posts have never posted anything here before? I think not.
OK just for some balance here's someone I recommend.You can view the video at this link
http://www.youtube.com/watch?v=ZaDK2wwgBegThey are offering the real deal and pass on the properties at the same price they secure them for with no middle men or mark ups involved so investors can truly buy at wholesale prices.
email [email protected]
@Catylst – That was exactly what I was thinking. "Why are there two vague, but positive, messages about this company from first time posters. Both with an underscore in the middle of their name?"
Maybe some sneaky marketing tactics at play here.
Ryan McLean
Free eBook "How To Find Positive Cash Flow Property"
http://CashFlowInvestor.com.auRyan McLean | On Property
http://onproperty.com.au
Email MeThis property is already rehabbed and tenanted
Purchase 43,000
Taxes 652
Management 800
insurance 450
Rent 805
Net return 18.04%Other company had the purchase price at 45,000 and then they added 3,500 in finder fees on top of this price!!!!!
Property was in Kansas City but just sold yesterday.
As I am new to this forum I also want to see if anyone else has seen this type of price difference and what companies mark their prices right up?
I just want the best deal and am still in early stages of looking
Spoke to AREI and they said they don't charge a finders fee.
And no, I am not marketing anything. Just a person trying to get some information who just got some word from some companies and who really does not know how to start it here.
You forgot to add solicitors fees, purchase costs etc.
What is the FINAL (all up) price of purchase?You need to know ALL the costs so as to be able to ascertain if it is a worthwhile investment.
If they don't charge a finders fee, how do they make their money. Everyone needs to get paid. If they don't charge a fee then it's built into the price.
Karina tells you ALL the costs and lets you know how much you'll receive as CF each month. She sells the houses for the price she pays. No markup. But, yes she charges a fee. No hidden charges, all up front. You can check the website to see how much it sold for.
All I can think of is a saying that was knocked into me by a mentor “you don’t know what you don’t know and when you find out it will be too late” and after GFC I have a few million more reasons not forget that one. My point is: you invest in the US and you are wondering about these details then you may be spending your money a little too soon.
Modernity Investing
Email MeIf you really want to throw money away PM me and I will give you my acct details. As an added bonus (early bird special?) I wont call you every day at 3am with tenant and tax costs.
There are good buys out there, but why in gods name do people insist on supporting charletans and thieves??
Even people who vehemently attacked me for saying things like that a year or so ago are themselve starting to ask sensible questions.
I have spent a (relative) lot of cash in premium areas in the states in the last year or so (adding to the 15 previous years) but it STILL costs a lot to get things right – and I know people who get things done for the ‘right’ price – like spending $5k a door to bump rents $650 – $1400.
I applaud anyone trying new things, but the things I see people trying are guaranteed to get you slaughtered.
I like property but it annoys me when people are trampling each other in the rush to invest in something that will almost certainly convince them all property investment is going to do nothing but send them broke.
lawsjs wrote:I applaud anyone trying new things, but the things I see people trying are guaranteed to get you slaughtered.I like property but it annoys me when people are trampling each other in the rush to invest in something that will almost certainly convince them all property investment is going to do nothing but send them broke.
lawsjs your straight talking it. But I most like your quote above!
The stampede is a sight to make one cry.
If every one of your “dollars” is a soldier going out to fight for you, the “dollars” going off to the battles as outline above are very unlikely to come home.Modernity Investing
Email MeThanks SS.
It IS possible to do well in foreclosures, but gee you have to know what you are doing… My sister in LV does, but she works bloody hard and has been in the states doing property herself for 15 years. It is possible. but the successful guys are VERY quick on their feet and VERY local.
There was an excellent article in the Fin Review 16th Nov 2011 page 31. I sent it to my broker in LA. This is his response with spelling errors included:
“….This is exactly what I have been telling the few people that have contacted me from AU. The gal that wrote this (Monique Sasson Wakelin from Wakelin Property Advisory) and I are on the exact same page. As I mentioned when I last wrote you, you more or less did exactly what she said and things have worked out despite the fact that you live on the other side of the world.
There are a lot of people who get into real estate at a time like this because they hear about the quick profits that some make and they want to jump in and get some, that’s called “greed” and that’s what makes capitalism work, unfortunately. So, the same greed that got the inexperienced in the real estate market when it was hot, and caused the collapse, get a new batch in to do the same thing as we leave the bottom. At the top we call them “speculators” and t the bottom we call them “bandits”. Your an investor which is someone looking to make a reasonable profit with a minimum of risk. You have a plan and you stick to it. I read a very good story in an AU magazine and it quoted Warren Buffet about just buying $12 billion of IBM stock at close to their all time high. He said IBM “fits my principles, it is something I expect to own indefinitely.”
There is nothing wrong with playing with some funds and taking some additional risks in a market you know.
What is crazy is to think that you can invest remotly from the other side of the world and actually find deals that the people here don’t see.
It is the epitomy of arrogance and stupidity in my opinion. Like if I flew into AU and started selling your property to people over here claiming to know a good deal based upon my experience in Los Angeles. The truth is that even LA experience doesn’t work in most other areas of the US. Here is a link to the hottest player in Long Beach. They hit it so big in the run up years that they made the cover of INC Magazine as one of the hottest growing companies in the US. They sold all their stuff in Long Beach and headed to Texas and Arizona and you can see where it got them. I sold a few of the places they sold as they were leaving and my clients are doing great……”
I removed the link for privacy, but the preface is this:
Background
xxx Holdings, LLC and its related entities were primarily in the business of purchasing, rehabilitating and operating multi-family apartment complexes in California and Arizona. After acquiring, fully refurbishing and operating each apartment complex for some time, the complexes would either be sold or refinanced.
xxx Holdings and its related entities held title to 51 properties, including a commercial property which served as the Debtors’ headquarters located at xxxxxxx, xxxxxxxxx, California, and a residence. A listing of all the Properties held by xxx Holdings and its related entities is attached hereto.
Based on the extensive analysis and research completed by the Chapter 11 Trustee and his professionals, the Trustee determined that six of the Properties generated sufficient cash flow or had sufficient equity to operate while the Property was marketed for sale. The Trustee determined the six Properties listed below would be operated and sold and the remaining 46 Properties abandoned.
etc etc etc etc etc
It makes for very depressing reading.
no solicitors fees as Missouri transactions are purely title companies. You can use an attorney at your own discretion.
Closing costs are $780
They make their money on the spread between what they purchased from the bank, plus add on the renovation cost, then they add their profit on top. Some australian brokers are said to then add the finder fee on top of this price so seems better to go direct????
I suppose it is much of a muchness then. You either pay a finders fee or you find someone direct and save money on the finders fee
@Stepping Stone
I understand your theory completely.
People who invested for capital gains got slaughtered in 2006, had their home values decline and started to feel the pressure of making repayments when the home was worth half.
People who invested for cashflow, were still able to make repayments thanks to cashflow, these cashflow investors then had the luxury of either walking away from their homes (thanks to non recourse loans and 100% LTV loans) with little financial impact.
I agree no one knows everything, you need to do thorough research, and always think of worst case scenario. I cringe when people invest for capital appreciation. Throw your money there and cross you fingers that one day it will multiply in value.
My point and probably yours as well Mark is, invest in your education before making any decisions. Don’t just accept that it is something you “don’t know”, this is just lazy. People who make money in this game (Australia or U.S.) know how to minimise risk and take opportunities when they see one.
I see the U.S. as an opportunity right now, but, there a dangers as well. Hence why I am wanting to lean on people on here for some help and see if anyone else had an opinion on these added finders fees companies are charging compared to this company I am looking at going through.
If this company is consistently getting better net returns on the same houses, and without the finders fee, then this is a better deal surely. Am I missing something?
FEES
This is a business and people are going to be charged REGARDLESS. Yes, being in the USA and buying in bulk (not bulk list, but from real estate agents) so I pay the agents and then factor in rehabbing the properties so I pay my contractors too! Then we have the property management side as well (alot of fun let me add that in there) and the company who makes loans to international investor(s) and both charge as well. So, in today's real estate game if you have the cash to play well real estate is the way to go. If you have to use teams to get things done for you then you should expect to be charged. If buying through a local reseller who has been to the States expect to get charged from them also. Now leverage is another topic, but we will discuss that another time.
Sorry, to just jump right in, but I work my ass off to get my company where it is! I expect to be paid. If the deal makes sense at the end of the day, does it really matter what I or others get paid? If everyone on here has a better way or can find better deals by all means go and do it.
Here in the USA and everywhere else people assume they can just jump in the real estate game and do this all by themselves. I really hated the television program Flip this House. They are so full of it because they over promised and made people think it was that simple and everyone could do it. Well like all businesses there are companies that specialize in certain areas and markets. Can you do it by yourself? Sure you can, but that comes with a ton of work.
Side Note: If you purchased a property and did not view the properties or meet the team (in person) regardless if it was from a USA team or AU reseller ~then "shame on you for that." If you want sound and real advice please email me. I REALLY DO NOT MIND GIVING IT STRAIGHT TO YOU. FYI- we buy today for cash flow only (future appreciation and capital gains are speculative). We are hoping these properties come back. My crystal ball is broke! So I am sorry that I nor anyone else can guarantee how long this will last.
On the other hand, when bitching about fees here is everyone who has there hand in the cookie jar… When I buy a property and send to my LA or NY resellers we pay a flat fee of $2k per deal for them to bring in a new client. When I attended or conducted the radio shows in LA and San Francisco we paid $5k fee per property. They did not disclose this to there buyers. Like most deals the fees were rolled into the deal itself.(CHECK OUT ANY OF THE LARGE CALIFORNIA INVESTMENT COMPANIES THEY STILL CHARGE $5K A DEAL MOST OF THEM TO RESELL OUR DEALS). That is why I fly to California so much. I can meet with clients who have heard about us from other clients and we cut out those fees out.I am now doing this for the Australian and Asian markets. Sorry, you can't buy anything from us without coming to the States. I am very excited for my first trip to Australia in late Jan.
Oh yes this past month we purchased 36 homes so far and should hit 45 by end of next week. The homes are between Atlanta, GA and Charlotte, NC.
We raise private capital so yes, we also pay the private money his/her share of the deal. Yes, everyone is going to charge for there little part. The best way to cut this all out except for financing is to be direct with a legitimate team. On the other hand, I would want someone who I could go to on both sides if something went wrong. There are a few clients from this site that are choosing to fly over and meet with me and my team in Dec and Jan. I applaud them for taking the time to check things out themselves. If you want to invest in properties and your financial future. Get up and make a point to check things out. Don't do it because someone else said it was a good deal.<moderator: delete advertising>
Sincerely,
Alex
happy holidays and my wife said to shut computer and phone off for the day…Hey Alex nicely done,
lawsys and I have had some off line communications and he is a seasoned investor.
I think the bottom line here is
1. Novice investors
2. Investors wanting to gravitate to who gives them the best presentation regarding return on investment
3. High yeilds in AU banks 5 to 7%
4. The reality that over time ( not the first payment for first year all of these folks comment on ) that the yeilds represented are just not sustainable if you are ( not cheating at Solitar) anotherwords counting everything into the equation. This is the only Real Estate invesment Scheme I have ever seen in my 35 years that investors make these investments on Projected returns and not on actuals. And that in its self says a lot about the individual investors experince and knowledge. There is no experinced or knowledgable investor in the states that is going to take the word of some RE agent or Wholesaler as to what they can expect down the road…. Experinced Investors want to see 2 years history via tax returns and supporting documents of what the asset will do. You would never get a loan on an apartment building based on trumped up proforma data. Any lender ( me being one will knock those proforma income estimates down 20 to 25% and thats for the experinced investor.
So you have all these people buying single family homes thinking they are going to run like clock work and thats just not the case. Not the end of the world but just not going to be what is represented. And a lot of them are really going to get tired of the day to day of all the issues that comes with being a US landlord. That part is really not spelled out well in these forums.
Its funny…. really some clients will agonize over a 100 dollar fixit item other will not care. But when their aircondionting unit got stolen and the copper is gone and its 10k to fix their 40k rental then thats an issue.
What is not conveyed here on this forum is that in the US RATE OF RETURN IS DIRECTLY RELATED TO RISK.
Buy investment grade properties at 5 to 7 caps and you have not many worries. Buy low end rentals at returns that are represented at 15 to 20% and then your setting yourself up for the big bummer as Lawsys suggests.
Now Alex on a local front,
I have been having a few te' ta te's with posters on Linda Pilagas site. pretty funny really you should check them out. One guy was promising 100k plus unsecured LOC's with little or no credit checks I had to flame him.
then the next guy was Guaranteeing loan mods with 50% reductions of payments for anyone that came to him and paid his fee.
The Feds are all over the loan mod guys as they are just flat out crooks, the unsecured LOC guys are no better most are out of florida or Wyoming send them your 500 to 2k and you will never hear from them again. I mean really there is no such thing as unsecured LOC's these days I still have a legacy one but thats because of 20 years with same bank perfect credit and assets.
How is some newbie US investor with 2k in the bank going to borrow 100k to buy foreclosures all unsecured.
These people prey on the wannabees. Same thing is happening here only the Aussies have 30 to 100k to spend and a lot of them just chase like I said the best story,JLH
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