I have been asked by a third party who is trying to get something done about the nastier elements operating on the fringes of the law in the AU/US real estate business.
Very few people have the courage to come forward and say ‘I’ve been ripped off’ but if one or two come forward there is a very good chance something may be able to be done, possibly even getting money back eventually and possibly getting some legal results.
I do not need to know any of these stories myself, but I have been asked to pass on the information.
I am convinced there are hundreds of very bad tales out there, but mostly it is ‘my friend’ or ‘someone I know’. To do anything there needs to be facts and figures and faces involved.
Please PM me, I might be able to provide direct access to people who might help in the US, but only if you wish it. Primarily this is about getting real life stories to someone in Australia very keen on assisting on a large scale.
lawsjs wrote:I have been asked by a third party who is trying to get something done about the nastier elements operating on the fringes of the law in the AU/US real estate business. Very few people have the courage to come forward and say 'I've been ripped off' but if one or two come forward there is a very good chance something may be able to be done, possibly even getting money back eventually and possibly getting some legal results. I do not need to know any of these stories myself, but I have been asked to pass on the information. I am convinced there are hundreds of very bad tales out there, but mostly it is 'my friend' or 'someone I know'. To do anything there needs to be facts and figures and faces involved. Please PM me, I might be able to provide direct access to people who might help in the US, but only if you wish it. Primarily this is about getting real life stories to someone in Australia very keen on assisting on a large scale.this would be a good read, and interest to not only Australians but us Americans as well..
Sincerely
Alex FranksHullo lawsjs and all readers. I don't consider that I have been ripped off as such but there are some providers out there that do it more effectively than others. For myself I would never deal with the same agency again or recommend them but I would with some of those I have mentioned in this response. Read and heed.
I purchased a property in Michigan and my comments only apply to my experience there. So think about the cost of a property. A $35K property with buying fees may cost you over $6000.00 extra equating to $41,000.00 for a $35,000 property through one agent. For that amount you can likely get a better property through an agent that does not charge fees for that same amount. Think also about the cost of setting up an LLC. I paid $450. I have seen amounts up to $800 and as low as $50. So what is fair? Why the difference?Think also of the vacancy time on your new property.Some sites advise against buying an untenanted property on the open market. LISTEN TO THEM. I proceeded to purchase one such property and after paying over 6000 USD for the privilege. I was immediately forgotten for 2 weeks until I asked what was going on. I was then offered properties that had little relation to what I had told the agency that I wanted and was required to offer more than the asking price to stand a chance of being successful with a bid. I only had first option on a few properties and the rest were on a first bid submitted basis. I bid unsuccessfully on 14 properties between April and November 2011. Some bids were not even submitted on claims that the computers were down and my emails had been missed, another was withdrawn and in the end I was placing bids on multiple properties and waiting for up to 2 weeks for advice on whether the bid had been accepted and generally that they were not. There were a number of occasions when I had to contact the agency to see what was happening as there was a continuous lack of communication lasting up to 2 weeks and only restored after my contact. I was successful with a bid on a turnkey property but after reading the management agreement I passed it in as the agreement amounted to all care and no responsibility. I was astounded that any one could ever accept it. I didn’t but the agent didn’t seem to have a problem with it.When I was finally successful with a bid on a property that required rehab the rehab did not start for 2 weeks after settlement and 2 weeks later it was ready for rent. Over this 4 week period the property was not listed for rent and it took another 6 weeks to find a tenant. One thing you aren’t told when purchasing an untenanted property is that it may take up to 3 mths (or maybe more) to find a tenant (in the good weather) come winter I expect that it may take longer so look at the return on your investment with an untenanted property and the ongoing maintenance and management fees on that property. All of a sudden that 20% roi is heading towards –ve territory. You have outlayed the cash. The bank is happy, the agent is happy, the management company is happy as they are still charging you fees and your cashflow is now in the –ve territory. Prior to finding a tenant my property has cost me over 46000 USD. I have just sent another $1500.00 across as there is still no cashflow and there are ongoing costs associated with holding the property . I could have purchased a comparable or better refurbished and tenanted property for less than that with no vacancy and instant cashflow and a lot less stress.Section 8 vs private tenants? I own a number of investment properties in Australia and from experience there are house proud people on low incomes and there are pigs on higher incomes so it is really a matter of the agent vetting the applicant effectively so I don’t see a problem with Section 8 any more than private especially considering the consequences of a Section 8 tenant losing the privilege if they do not perform to standards. The bottom line is only buy tenanted properties (turnkey) from agents that do not charge fees. There are a few; Property 4 Peanuts, Detroit Wealth and US prime that I am aware of (check them out I may be wrong). Management agencies charge up to four weeks rent to place a tenant so consider vacancies after the end of the initial tenancy and how long it will take to get a new tenant. I found a website that claims ‘the city of Detroit has a waiting list of more than 9200 pre approved families with Housing Choice Vouchers (HCV) who are currently in unsuitable emergency or temporary accommodation, some simply cannot find a suitable home’. The property manager I am with was proud that they had obtained a tenant after ‘only’ 42 days. As I was concerned at the prolonged vacancy I spoke with another agency, Metro Detroit Rental Experts and they claimed to be able to provide a tenant in 1-2 weeks so it is a matter of either having an active property manager or one who just lists the property and sits back and waits.(Taking your money in the meantime)I had considerable correspondence with one of the directors of Detroit Wealth (Mark Ijlal) and Metro Detroit Rental Experts (Chris Shaw) (both dealing with international investors) and I have reproduced some of their responses to my situation much of which was volunteered and not solicited. I have not used the services of either organisation but I would seriously consider it in the future based on their advice with no pressure for business. Please read on for some really good advice from Mark and Chris which I feel reinforces what I have attempted to relay here. Good luck with your investing.In summary my $33,000.00 property has cost me in excess of $48,000.00 and all indications are that I am fortunate to have a tenant.Should you want any further information you can contact me personally on email: g’[email protected]. Unsolicited advice from local Detroit agencies This information consists of that provided to me during correspondence with Detroit Wealth and Metro Detroit Rental Experts and relates to all the questions and experiences I had during my foray into the US property market. There are a lot of people getting less than favourable service and I believe that their advice is invaluable.The content of the advice conflicts with a lot of the advice you may find on various websites. The strongest advice I can give is to NOT buy untenanted properties on the open market.Detroit Wealth advice: never buy a property unless it already has a tenant inside OR if there is no way of doing it then make it a part of your contract that their fee (case in point over $6000 fee) is not getting to them till the property is closed, rehabbed and tenanted. Once people get paid, their motivation level drop to zero. Sad but true. They are on to the next sale instead of sitting and making sure that the property is delivered per promised: repaired and tenanted. I hear this every single day and actually have heard that story for 11 years now since I have been investing in Detroit foreclosures. That is why when I started Detroit Wealth – I decided that I will not sell, even though I have to sit on these properties for may be one more month than needed, any property which does not have a tenant in. We have 7 properties coming out of repairs in the next week. Every single one of them tenanted. The 2 I did last week on Piedmont and Coyle – both tenanted already and I have not even sold Coyle yet but the tenant is already in at $900 per month. To me personally, it is just so cool to be able to talk to an investor who is not here physically and know that they will have no surprises after they buy, that it is all done and done right. Very old school thinking but I am an old guy and it seems to work for me.I paid $450.00 for an LLC I have seen amounts up to $800 on some sites Response: $450 for forming the LLC is a complete joke. It cost $50 to form an LLC and it takes around 3 minutes to do so so making $400 from a client that you are selling a property and making money on that is just unbelievable. I know companies who are charging $700 to setup a Michigan LLC. We form LLC's for all our our clients in Michigan and they just pay State of Michigan fees which is $50. Do not buy South of 8 Mile Rd Response: Warren, Grosse Pointe, Eastpointe, Harperwoods, Oak Park, Redford, Southfield and many more smaller cities circle the city of Detroit. You could be driving on 8 Mile Road and on one side of the road is Grosse Pointe and the other side of the road is Detroit. Same with Warren. Detroit is a very big city and like all big cities it has good areas where families want to live and less than desirable areas where nothing is going on for many many years. All of our properties are on West Side of Detroit. Why? First our office is in West Side of Detroit so we can keep a close eye on our client's portfolio and our tenants like the idea that their property management company is right around the corner. Second, Darrick is a third generation Detroitter (I moved here 16 years ago but grew up in Pakistan and lived there for 25 years) and he knows the City of Detroit in and out as his grandfather and his dad both lived and raised families in Detroit. I choose to buy properties in good areas in Detroit because I don’t outsource property management. Darrick owns Metro Detroit Rental Experts 100% and I have no stake in it but he is my partner in Detroit Wealth and we always thought that if somebody were to trust us enough to send us money from thousands of miles away then we have to repay that trust back and keep the management business and do it in house so we can make sure that these properties are being managed the right way. Trust me it is a pennies business. There are no dollars in it. 10% of rent collected is $85 per property but we need an office, staff to answer phones, internet advertising, tenant placement specialists to go out and rent these properties out – it is pain in the rear end business but something that we feel is the most important part of our business and hence we keep it in house and trust our own people to do it.
If you need help in finding a tenant for your current Detroit property – let me know. We get 30 to 40 leads per day for both Section 8 and non-Section 8 tenants and Darrick's company Metro Detroit Rental Experts (http://www.MetroDetroitRentalExperts) does tenant placement for many property investing companies both in USA and from overseas. No point in keeping a good property empty when so many families in Detroit are looking for good affordable housing. Some providers are claiming costs to set up a bank account which I had difficulty with and even HSBC in Australia doesn't make it easy to open a US bank account. What does it cost and how difficult is it to set up a bank account for a non resident? Response: There is no cost to setup a bank account in US. Setting up a bank account is a pain in the rear end. I agree on that completely. If you visit US – than it is easy. Otherwise hard. But getting an ITIN number just requires filling out W7 form and mailing it to IRS along with a copy of your passport OR you can ask for the ITIN number when you file your first tax return in US. The IRS needs a 'reason' to give out a ITIN and ownerhip of USA property qualifies as a legitimate reason. Either way no cost unless you want to hire a company to fill out a W7 form for you which is really an easy form to do. Professional/buying fees As far as hidden fees as concerned – I have never liked it when a business charges me those. So I don’t do it either. Whatever it is – it is right here in black and white. Bluntness is not the best marketing strategy but it seems to work for me. Let me know if you want to connect you with my tenant placement team. They charge first month rent as tenant placement fee and then 10% every month of the collected rent. Pretty customary fees but they do have 6 full time tenant placement specialists who do nothing all day but show prospective tenants properties all around Detroit. I hope these responses help you with your decision to invest. There are issues here that don’t appear to have been raised on other blogs.Thanks for the response, but there are plenty of posts regarding advice. Please refrain from advertorials, there are people seriously out to help genuine buyers who have fallen foul of australian marketeers on the edge of the law. They are looking for people who have lost money to tell their story to try to get some positive action.
There is no doubt your post contains great information, but this thread is hopefully going to help people who have been ‘really’ hurt by some very nasty elements – not just ‘bad buys’.
Make sure you do back research into the story first. I know of a couple of people that were thrown to the wolves for something that was done by a completely seperate group… Burn the rubbish not the ones that are there to help
jad wrote:Make sure you do back research into the story first. I know of a couple of people that were thrown to the wolves for something that was done by a completely seperate group… Burn the rubbish not the ones that are there to helpAgree 100 % finding out exactly both sides of the story is the key.Not just what one post. In this real estate business you see a lot of winners and losers.
Surprised by the lack of comments here so far….
Alex
I am too Alex. I think it is probably fear and embarrassment. Neither of which are warranted – this is not about looking a fool. These schemes were designed to deceive.
OK well here is a start. How would anyone feel about paying way over the odds for a property and finding out that even after paying enough for two (with markups etc) you don’t actually legally even own the property?
Not a lot of grey area in that set of events is there? There has to be someone willing to say something – we know these events are not isolated.
What is upsetting is these guys have usually done it before, and will do it again.
It’s sad how hard it is to find investors sometimes when all the scam people have hurt peoples trust. Lately I have been working with people that have been scammed by failed groups that have purchased and given people terrible properties. The same scenario that most are given, around forty thousand for a dump. You hear the horror stories, falling apart (said they rehabbed it) in a war zone. Most of these companies are bankrupt and gone, the investor is left usually with a preperty they have to relist on the.MLS and take huge losses. I am based out of Kansas city and all the people I work with are currently people that were decieved in the states. I am also surprised there aren’t more people that havent posted in this forum. Lol, yet if u read the forums people will vent. Anybody interested in networking for Kansas city shoot me an email
Kyler
[email protected]alanls wrote:Propert4peanuts and The Foreign property ShopFor anybody contemplating purchasing an American property through http://www.property4peanuts.com
an The Foreign Property shop you should be aware of my experiences with the company's.
It should also be noted that they have applied to companies house to have
property4peanuts and 'The Foreign Property shop' struck off.
Investors should also be aware that they have created another company
called http://www.valueproperty.info to sell American property.I purchased a property in Atlanta from them late 2009 and made the final payment
in February 2010. They were contracted to refurbish the property and provide me
with a clean title. It is over sixteen months since I paid for the property and
I still do not have the title. The title records are in the public domain and are
easily verified. The alleged refurbishment took over a year, far longer than
anticipated. I have asked for proof that the refurbishment was done but none has
been provided. I had photographs taken recently and it is clear that some of the
work that was supposed to be done was not done. They allegedly found a tenant for
the property however the tenant only stayed for two months then moved out for no
apparent reason. The property was then empty and a vagrant moved in
and the property was damamaged, I have photos.
I am in an inteollerable position as I am unable to do anything with the property
as I am still not the legal owner. It remains damaged and unmanaged.
Not only have they taken my money but not delivered a clean title, local
taxes are due on the property which need to be paid, if they are not paid the property
can be seized by the council and sold at auction for a knock down price.I also purchased a property from them in Detroit. Although I have the title it
was not clean, taxes are owed for the year before I purchased it. The contract states
that outstanding taxes will be paid by the seller. I also have concerns over the
refurbishment, I have asked for proof that it was done but no documentation has
been provided. In fact there is no supporting documentation for either house
despite my numerous requests.This is a brief overview of the situation. I have masses of supporting evidence
and much of it is documents that are in the public domain and beyond dispute.To summarise, I have paid for a house but did not get the title. The property is damaged
but I am unable to do anything about it. There are outstanding taxes on both
properties, neither has clean title. Both properties are in breach of contract.
The people behind the companies are still trading but trying to close the old
companies and start new ones. I doubt if I am the only victim of these companies.
These companies need to be exposed in the public interest.Hit me with private message I think you got something here to go after who did you send the funds to.
If this was not done through a title company , or Lawyers escrow account.
Talk soon
Alanls,
It sounds VERY similar to my experience with Andrew Allan, Jeremy Burgess and My USA Property. I had outstanding taxes too for a property I purchased in Detroit which did not have a title under my name. I am going after those two names above, I suggest you do with those people who misrepresented you too. Sooner or later if enough people kick up a fuss there will be better regulated processes put into place.Richard
I got messed around by a property management agency that tried to rip me off. They said work was done when it clearly had not. Trying to contact the manager was also quite difficult. In the end I drafted a letter of complaint to their professional association and faxed the draft to the PM agency. I stated that I would send the letter to the association if after 14 days I did not receive a full refund for the works and the repayment of all PM fees to date as they hadn’t provided me with the service as stated in the contract. I also request that the contract be cancelled. I received the refund in under a week and we went our separate ways.
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Email MeAlex SC wrote:alanls wrote:Propert4peanuts and The Foreign property ShopFor anybody contemplating purchasing an American property through http://www.property4peanuts.com
an The Foreign Property shop you should be aware of my experiences with the company's.
It should also be noted that they have applied to companies house to have
property4peanuts and 'The Foreign Property shop' struck off.
Investors should also be aware that they have created another company
called http://www.valueproperty.info to sell American property.I purchased a property in Atlanta from them late 2009 and made the final payment
in February 2010. They were contracted to refurbish the property and provide me
with a clean title. It is over sixteen months since I paid for the property and
I still do not have the title. The title records are in the public domain and are
easily verified. The alleged refurbishment took over a year, far longer than
anticipated. I have asked for proof that the refurbishment was done but none has
been provided. I had photographs taken recently and it is clear that some of the
work that was supposed to be done was not done. They allegedly found a tenant for
the property however the tenant only stayed for two months then moved out for no
apparent reason. The property was then empty and a vagrant moved in
and the property was damamaged, I have photos.
I am in an inteollerable position as I am unable to do anything with the property
as I am still not the legal owner. It remains damaged and unmanaged.
Not only have they taken my money but not delivered a clean title, local
taxes are due on the property which need to be paid, if they are not paid the property
can be seized by the council and sold at auction for a knock down price.I also purchased a property from them in Detroit. Although I have the title it
was not clean, taxes are owed for the year before I purchased it. The contract states
that outstanding taxes will be paid by the seller. I also have concerns over the
refurbishment, I have asked for proof that it was done but no documentation has
been provided. In fact there is no supporting documentation for either house
despite my numerous requests.This is a brief overview of the situation. I have masses of supporting evidence
and much of it is documents that are in the public domain and beyond dispute.To summarise, I have paid for a house but did not get the title. The property is damaged
but I am unable to do anything about it. There are outstanding taxes on both
properties, neither has clean title. Both properties are in breach of contract.
The people behind the companies are still trading but trying to close the old
companies and start new ones. I doubt if I am the only victim of these companies.
These companies need to be exposed in the public interest.Hit me with private message I think you got something here to go after who did you send the funds to.
If this was not done through a title company , or Lawyers escrow account.
Talk soon
Alex, let me know if your helping this guy….
If no deed has been transferred then he has an Equatable interest but no interest that is defendable.
The sellers the agents and closing attornies need to be contacted.
So many red flags.
1 year to do reno…
Also FYI it takes a few years 3 to 5 in most states to lose your property for non payment of RE tax's you cannot lose it year one.
Now given whats going on here it probably already has back tax's
<moderator: delete personal comment> This is totally unacceptable and unprofessional for any one in the business.
If you want to send me an e mail with the address we can do some quick research for you and get to the bottom of who owns it and the other types of things… I don't want to duplicate efforts with Alex, but happy to help if you need.
JLH
alanls wrote:Alex,The money was paid to the Foreign Property shop. They are attempting to get themselves struck off from companies
house but I objected to it due to legal proceedings.Alanls
Sorry been offline , I think between Jay and My self we can help hit me with PM and lets see what we can do for you.
Sincerely
I am in Atlanta if that helps and will lend myself to the cause… As we only charge $115, $1500 to paint a house up to 2200 sq ft and 7% of gross rents for property management with no renewal or reletting fee, if you need someone on the ground I HATE PEOPLE BEING SCREWED HERE!!!
If you paid over 8k for repairs and that didn't include an A/C – YOU WERE PROBABLY PRETTY HIGHLY CHARGED……
Let me know if you want a drive by I am everywhere tomorrow – literally from Cobb to Clayton and back again…
leonard wrote:Hullo lawsjs and all readers. I don't consider that I have been ripped off as such but there are some providers out there that do it more effectively than others. For myself I would never deal with the same agency again or recommend them but I would with some of those I have mentioned in this response. Read and heed.
I purchased a property in Michigan and my comments only apply to my experience there. So think about the cost of a property. A $35K property with buying fees may cost you over $6000.00 extra equating to $41,000.00 for a $35,000 property through one agent. For that amount you can likely get a better property through an agent that does not charge fees for that same amount. Think also about the cost of setting up an LLC. I paid $450. I have seen amounts up to $800 and as low as $50. So what is fair? Why the difference?Think also of the vacancy time on your new property.Some sites advise against buying an untenanted property on the open market. LISTEN TO THEM. I proceeded to purchase one such property and after paying over 6000 USD for the privilege. I was immediately forgotten for 2 weeks until I asked what was going on. I was then offered properties that had little relation to what I had told the agency that I wanted and was required to offer more than the asking price to stand a chance of being successful with a bid. I only had first option on a few properties and the rest were on a first bid submitted basis. I bid unsuccessfully on 14 properties between April and November 2011. Some bids were not even submitted on claims that the computers were down and my emails had been missed, another was withdrawn and in the end I was placing bids on multiple properties and waiting for up to 2 weeks for advice on whether the bid had been accepted and generally that they were not. There were a number of occasions when I had to contact the agency to see what was happening as there was a continuous lack of communication lasting up to 2 weeks and only restored after my contact. I was successful with a bid on a turnkey property but after reading the management agreement I passed it in as the agreement amounted to all care and no responsibility. I was astounded that any one could ever accept it. I didn’t but the agent didn’t seem to have a problem with it.When I was finally successful with a bid on a property that required rehab the rehab did not start for 2 weeks after settlement and 2 weeks later it was ready for rent. Over this 4 week period the property was not listed for rent and it took another 6 weeks to find a tenant. One thing you aren’t told when purchasing an untenanted property is that it may take up to 3 mths (or maybe more) to find a tenant (in the good weather) come winter I expect that it may take longer so look at the return on your investment with an untenanted property and the ongoing maintenance and management fees on that property. All of a sudden that 20% roi is heading towards –ve territory. You have outlayed the cash. The bank is happy, the agent is happy, the management company is happy as they are still charging you fees and your cashflow is now in the –ve territory. Prior to finding a tenant my property has cost me over 46000 USD. I have just sent another $1500.00 across as there is still no cashflow and there are ongoing costs associated with holding the property . I could have purchased a comparable or better refurbished and tenanted property for less than that with no vacancy and instant cashflow and a lot less stress.Section 8 vs private tenants? I own a number of investment properties in Australia and from experience there are house proud people on low incomes and there are pigs on higher incomes so it is really a matter of the agent vetting the applicant effectively so I don’t see a problem with Section 8 any more than private especially considering the consequences of a Section 8 tenant losing the privilege if they do not perform to standards. The bottom line is only buy tenanted properties (turnkey) from agents that do not charge fees. There are a few; Property 4 Peanuts, Detroit Wealth and US prime that I am aware of (check them out I may be wrong). Management agencies charge up to four weeks rent to place a tenant so consider vacancies after the end of the initial tenancy and how long it will take to get a new tenant. I found a website that claims ‘the city of Detroit has a waiting list of more than 9200 pre approved families with Housing Choice Vouchers (HCV) who are currently in unsuitable emergency or temporary accommodation, some simply cannot find a suitable home’. The property manager I am with was proud that they had obtained a tenant after ‘only’ 42 days. As I was concerned at the prolonged vacancy I spoke with another agency, Metro Detroit Rental Experts and they claimed to be able to provide a tenant in 1-2 weeks so it is a matter of either having an active property manager or one who just lists the property and sits back and waits.(Taking your money in the meantime)I had considerable correspondence with one of the directors of Detroit Wealth (Mark Ijlal) and Metro Detroit Rental Experts (Chris Shaw) (both dealing with international investors) and I have reproduced some of their responses to my situation much of which was volunteered and not solicited. I have not used the services of either organisation but I would seriously consider it in the future based on their advice with no pressure for business. Please read on for some really good advice from Mark and Chris which I feel reinforces what I have attempted to relay here. Good luck with your investing.In summary my $33,000.00 property has cost me in excess of $48,000.00 and all indications are that I am fortunate to have a tenant.Should you want any further information you can contact me personally on email: g’[email protected]. Unsolicited advice from local Detroit agencies This information consists of that provided to me during correspondence with Detroit Wealth and Metro Detroit Rental Experts and relates to all the questions and experiences I had during my foray into the US property market. There are a lot of people getting less than favourable service and I believe that their advice is invaluable.The content of the advice conflicts with a lot of the advice you may find on various websites. The strongest advice I can give is to NOT buy untenanted properties on the open market.Detroit Wealth advice: never buy a property unless it already has a tenant inside OR if there is no way of doing it then make it a part of your contract that their fee (case in point over $6000 fee) is not getting to them till the property is closed, rehabbed and tenanted. Once people get paid, their motivation level drop to zero. Sad but true. They are on to the next sale instead of sitting and making sure that the property is delivered per promised: repaired and tenanted. I hear this every single day and actually have heard that story for 11 years now since I have been investing in Detroit foreclosures. That is why when I started Detroit Wealth – I decided that I will not sell, even though I have to sit on these properties for may be one more month than needed, any property which does not have a tenant in. We have 7 properties coming out of repairs in the next week. Every single one of them tenanted. The 2 I did last week on Piedmont and Coyle – both tenanted already and I have not even sold Coyle yet but the tenant is already in at $900 per month. To me personally, it is just so cool to be able to talk to an investor who is not here physically and know that they will have no surprises after they buy, that it is all done and done right. Very old school thinking but I am an old guy and it seems to work for me.I paid $450.00 for an LLC I have seen amounts up to $800 on some sites Response: $450 for forming the LLC is a complete joke. It cost $50 to form an LLC and it takes around 3 minutes to do so so making $400 from a client that you are selling a property and making money on that is just unbelievable. I know companies who are charging $700 to setup a Michigan LLC. We form LLC's for all our our clients in Michigan and they just pay State of Michigan fees which is $50. Do not buy South of 8 Mile Rd Response: Warren, Grosse Pointe, Eastpointe, Harperwoods, Oak Park, Redford, Southfield and many more smaller cities circle the city of Detroit. You could be driving on 8 Mile Road and on one side of the road is Grosse Pointe and the other side of the road is Detroit. Same with Warren. Detroit is a very big city and like all big cities it has good areas where families want to live and less than desirable areas where nothing is going on for many many years. All of our properties are on West Side of Detroit. Why? First our office is in West Side of Detroit so we can keep a close eye on our client's portfolio and our tenants like the idea that their property management company is right around the corner. Second, Darrick is a third generation Detroitter (I moved here 16 years ago but grew up in Pakistan and lived there for 25 years) and he knows the City of Detroit in and out as his grandfather and his dad both lived and raised families in Detroit. I choose to buy properties in good areas in Detroit because I don’t outsource property management. Darrick owns Metro Detroit Rental Experts 100% and I have no stake in it but he is my partner in Detroit Wealth and we always thought that if somebody were to trust us enough to send us money from thousands of miles away then we have to repay that trust back and keep the management business and do it in house so we can make sure that these properties are being managed the right way. Trust me it is a pennies business. There are no dollars in it. 10% of rent collected is $85 per property but we need an office, staff to answer phones, internet advertising, tenant placement specialists to go out and rent these properties out – it is pain in the rear end business but something that we feel is the most important part of our business and hence we keep it in house and trust our own people to do it.
If you need help in finding a tenant for your current Detroit property – let me know. We get 30 to 40 leads per day for both Section 8 and non-Section 8 tenants and Darrick's company Metro Detroit Rental Experts (http://www.MetroDetroitRentalExperts) does tenant placement for many property investing companies both in USA and from overseas. No point in keeping a good property empty when so many families in Detroit are looking for good affordable housing. Some providers are claiming costs to set up a bank account which I had difficulty with and even HSBC in Australia doesn't make it easy to open a US bank account. What does it cost and how difficult is it to set up a bank account for a non resident? Response: There is no cost to setup a bank account in US. Setting up a bank account is a pain in the rear end. I agree on that completely. If you visit US – than it is easy. Otherwise hard. But getting an ITIN number just requires filling out W7 form and mailing it to IRS along with a copy of your passport OR you can ask for the ITIN number when you file your first tax return in US. The IRS needs a 'reason' to give out a ITIN and ownerhip of USA property qualifies as a legitimate reason. Either way no cost unless you want to hire a company to fill out a W7 form for you which is really an easy form to do. Professional/buying fees As far as hidden fees as concerned – I have never liked it when a business charges me those. So I don’t do it either. Whatever it is – it is right here in black and white. Bluntness is not the best marketing strategy but it seems to work for me. Let me know if you want to connect you with my tenant placement team. They charge first month rent as tenant placement fee and then 10% every month of the collected rent. Pretty customary fees but they do have 6 full time tenant placement specialists who do nothing all day but show prospective tenants properties all around Detroit. I hope these responses help you with your decision to invest. There are issues here that don’t appear to have been raised on other blogs.Ugh:
first comment when they say there is 9200 waiting on hud vouchers,,, it has absolutly nothing to do with suitable housing there is far more housing in detroit than there is tenants thats a fact……The city county only metars out so many vouchers a year, as funds allow has nothing to do with the housing stock and everything to do with money avalaible for the program.. So those wishing to get their rent subsidies sign up and wait there turn…
second: I am sure the audinace by now has figured out the RISK REWARD Ratios in places like Detroit…. Again nothing to do with the houses per se and everything to do with the neighborhoods, and sociodemographics of the tenant base.
throw in some huge amount of less than honorable PM types and turn key types and your investment by and large will never ever be what you want and will never get above VR and your expenses are always going to be past VNE…These by and large will be huge negative geared properties until such time as the investor finally figures out they made a mistake and just stop paying any tax's etc and let the property go back to the city for back tax's since the OZ is paying cash no lender to worry about.. NExt set of US wholesalers will buy these houses for 500 to 2k each at tax sale and the cycle will repeat to unsuspecting foriegn investors…
Sad but true especially in the areas of detroit that those in the know know not to invest in, big black hole and that is not a fruedian slip.
JLH
JLH[/quote]Jay I am at a total loss why Detroit and what t he draw is. Spoke with a UK group want to attend a seminar in Oct there. CL _ TWH module would be great to introduce.
The thing I am most amazed is how they are and all ask about Detroit , second was St Louis and 3rd Florida.
Well for any one who is wanting to meet and talk real estate , I will be in Malaysia from 11_ 17th _ Singapore 18-22 .
Funny thing I was set to go to speak about our homes and my system in Charlotte . Now I am going speaking mainly on the TWH module.
emma171 wrote:I am in Atlanta if that helps and will lend myself to the cause… As we only charge $115, $1500 to paint a house up to 2200 sq ft and 7% of gross rents for property management with no renewal or reletting fee, if you need someone on the ground I HATE PEOPLE BEING SCREWED HERE!!!If you paid over 8k for repairs and that didn't include an A/C – YOU WERE PROBABLY PRETTY HIGHLY CHARGED……
Let me know if you want a drive by I am everywhere tomorrow – literally from Cobb to Clayton and back again…
Hi Emma
Interested in finding out more about the management service you offer in Atlanta?
I think I have seen the sort of management deal that you offer for those with Atlanta properties but purchased outside of your organisation I just can't seem to locate it. Thus wondering if you care to post the details.
Do you manage the properties yourself (or your organisation) or do you use a third party (licensed broker) where you have struck a deal regarding the management arrangements. If you are personally involved then what is your license arrangements, particularly re trust account and the like?
Also I think it is important that the PM is close by the properties (say within 15miles). The bulk of my properties are located from Loganville through to Covington with the outliers being stone mountain and loganville. So the ideal location is around Lithonia giving the PM an opportunity to check issues such as late rent and simply playing phone flick with maintenance people rather than understanding the real problems.
You go get em Alex,
It really boils down to ADVERTISEMENTS for huge rental Yields… and those who want to beleive.. then it comes down to reality and the tween never meet.
JLH
Oh sorry……..I should have specified… you wont find us but it sounds like Alanis could do with a bit of help.. When i set this up i knew property management can be disastrous…. And as Aussies we just need more! I always equate it to how comfortable an American would be with looking for a Russian bride over the Internet and what their friends would say…
So we do generally only handle my clients as our expectation as Aussies is a little different plus we are only “us”…. So no over worked property manager who doesnt care…but a team that has been together since the “birth” of your baby…..but we don’t buy what most of the spruikers buy AND it keeps us all together as a group and agency for the next 5 years …. United we stand, divided we fall,,,..never planned this to be “big”…just “right”. I would rather 20 of us become millionaires type concept.
. Things that we put in place that work
1) Get before and after photos of repairs – get scanned copies of every receipt
2) ask for or get or suggest to have a standardized rate sheet for every item of repair….I put one in place ages ago and it is our bible… That way if someone tells you that you need a new toilet, YOU know what you will be being charged exactly the same as the tradie knows how much they will be paid. it eliminates so many issues.. Right down to weekend call outs and holiday call outs.I hate with a passion property management but if it is set up correctly there is hope! I know our babies inside and out and every faucet, toilet and door intimately….. and my guys know that they get the ongoing repairs as well as the start up repairs if they do a good job. I haven’t really thought about adopting other people’s properties and it can be a bit fraught (quality of work etc) but if Alanis or anyone else gets burnt, I am there for you…
FYI, the reason people charge you to rent your property out is because they are dealing with 3rd party property managers. To rent a property you must be a licensed agent. If your facilitator is NOT a licensed US real estate agent they would HAVE to outsource or be working very closely with an agency willing to wave that fee. I have found VERY few people get the big picture……. But those that do know darn well that we intend to be together as a group for the next 5 years.
Again, find a licensed real estate agent… We start renting your property the day we close the darn thing because we can!
That being said, as I always offer… If you need something or a driveby, I am slap bang in the middle of Lithonia and Ellenwood (as everyone jokes “Emmawood”) .. When not in Vegas ….and happy to help.
Very sorry if above sounded like advertising.. I had tried to change but Jay beat me to the button!
Just curious, but would the forum allow for members to name and shame… as well as list those that are good companies so that other people may be able to be better informed on this.
A sticky forum with a first post that someone can edit with names of good and bad companies, maybe even with an average score out of ten that is the average of what other people have scored them, could help us all to decide on who to talk to and who to steer clear of..???
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