http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/01/19/BURS1MR4H5.DTL
Been a frosty 3 or 4 years for US investors. 2012 is going to see a rebound of US investors coming back into the market.
Make no mistake there is trillions of dollars of US cash sitting on the side lines. Do not beleive that US investors can't buy because they can't get credit etc. The US investor by and large has just been shell shocked and has rolled their funds into cash and liquidity….. Once this train gets started it will be a feeding freenzy agian in a few years.
Last 2 years have seen little competition for these cash flow properties thats about to change I predict.
And this is were capitol growth will occur…. US investors by and large are very happy with much smaller returns than what I see from the other side of the oceans thereby allowing them to buy the same asset for more money…..
And remember if the investors are jumping into the SF Bay Area market that means they are buying 400k to 600k SFRs that are break even to negativly geared, and that has not happened in 5 years.
And with the feds bundling up government owned properties and sellling them to larger investors that will hold them as rentals. The amount of foreclosure inventory your exposed to in general is going to shrink drastically, We are in talks with a few hedge funds now on how to take on the control and management of these assets for them as our model is specific to complete control and management and does not leave the investor twisting in the wind with management issues.
Exciting ride coming up.
JLH
To clarify, this does not mean that inner city war zone properties are going to do any better,
However the areas that are nicer and the price points higher these properties are going to become more valuable.
Upper mid west rust belt stays the same, there will be rebound in CA AZ FL GA and other sun belt areas and or the better neighborhoods of the bigger cities across the country.
Aussies have to remember that your not the first to the dance when it comes to buying a 25k rental in a cash flow only market, the US investor already tried that and gave them back to the bank, so there will not be alot of demand from experinced investor to go back into that asset class they will have learned their lesson first time. The cash flow markets will be what they are for as long as we are here and alive they will never really change it will all be a function of whats the rent and what kind of return can I get and if I am happy with that return its like a fixed annuity.
There will be consolidation in the cash flow markets as well. For instance a poster on this Board Alex is putting together a purchase for 67 cash flow homes, And to run these C D class investments you need Velocity and numbers… You get killed ( can be literally in Detroit) owning 1 or 2… You own hundreds and you run it like a business… And the house is just a fixed asset producing revenue… Like a Moving Van for U Haul.
We had a nice year this year and added 81 SFR's to our Portfolio with the goal set at 500 to start them 1000. we got almost 10% there in our first 6 months…..
Now we have some larger investors looking at our model and our company and getting ready to jump in. As with all the buzz going on about our US government packaging up 5 mil bundles of vacant homes and selling them only to investment groups that will ONLY rent them…. Like I said you going to start see a tightening when that starts to manifest its self.
OK Off to work I got houses to buy deals to close and people to talk to
)Thanks Jay, good write up.
EngeloRumora | Ohio Cashflow
http://ohiocashflow.com/
Email Me | Phone MeF@#$ THE REST WORK WITH OHIO CASHFLOW TO INVEST
Yes Jay is a wealth of information on USA markets being he comes form both sides of the fence.The lending side and the rehab side. For me I have been the type of buy and flip guy Jays companies lent money to. So I understand the rehab and management aspect pretty well .Where I am learning the lending( banking side pretty quick in today cash market.
With alot going on in the USA I do hear the rumbling about hedge funds coming to look at single family homes and rental market. So that is saying some thing going on.
Alex
Alex SC wrote:Yes Jay is a wealth of information on USA markets being he comes form both sides of the fence.The lending side and the rehab side. For me I have been the type of buy and flip guy Jays companies lent money to. So I understand the rehab and management aspect pretty well .Where I am learning the lending( banking side pretty quick in today cash market.With alot going on in the USA I do hear the rumbling about hedge funds coming to look at single family homes and rental market. So that is saying some thing going on.
I would be interested to know whether you are finding the foreclosure market tighter, in other words has it become harder to secure good properties, ie more competition.
Cheers, WI
Alex
Jay – Interesting article on Bloomberg appeared ysterday saying exactly that.
Karina – I have refi'd $2m worth of property in the last 3 months with a nice cash out – the banks (in this case Chase) are actively asking for my next deals. I really didn't expect anything from the loan apps, but they came through. If I can get that as a non-resi alien, then money is moving into the market and by default prices will increase. There is no other possibility.
I haven't delved into the subprime pond (spreading supply lines too thinly has brought down everyone from Cesar and Napoleon to Hitler and tricky dicky) but that doesn't mean it isn't great.
The 'incredible' buys IMHO have a very short half life. This absolutely cannot last forever.
worldinvestor wrote:Alex SC wrote:Yes Jay is a wealth of information on USA markets being he comes form both sides of the fence.The lending side and the rehab side. For me I have been the type of buy and flip guy Jays companies lent money to. So I understand the rehab and management aspect pretty well .Where I am learning the lending( banking side pretty quick in today cash market.With alot going on in the USA I do hear the rumbling about hedge funds coming to look at single family homes and rental market. So that is saying some thing going on.
I would be interested to know whether you are finding the foreclosure market tighter, in other words has it become harder to secure good properties, ie more competition.
Cheers, WI
No I don't think it is harder in Charlotte for us but in Atlanta yes.Every investment team ( resellers are using the Atlanta market ) I can count all the west coast teams from the USA that are using teams in Atlanta . There are plenty of properties their . So really just matters what you will pay for them. Like I said our Atlanta I will still buy and sell ,just very limited deals from that market. Instead concentrating on Charlotte NC and surrounding areas.
I Feel the rental market in Atlanta will be affected especially if you want 20 % returns. Then again these are just my thoughts.
Talk soon
Alex
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