Buying foreclose property in the US/Florida state from Australia as an Investment

– Did you find the process of buying foreclose properties in the US difficult/complex?
Can be…Do you really want to buy an REO and deal with worrying about rehab?  Use a wholesaler.  For instance (and this is not a solicitation , but we purchase 1-10 homes at a time, in many cases from the same seller.  We get some discounts.  The discounts basically cover our wholesale fee, versus what you would be able to buy from the bank direct.  We buy with our own funds, we inspect, and we fix the home to rent-ready condition.  During the acquisition / rehab process, we make the home available to our investors in our network.  We don't require investor to close on the home until rehab is done and tenant is occupying.  We have a proven concept, so we allow closing stipulations and leniencies.

– What paper work is involved?
Contract and closing papers.  Inspection report…Title policy

– What are the associated paper work costs? Stamp duty, taxes, insurance, etc?
It varies.  Not much

– Did you seek help from any local agents? If yes, could please tell which ones?
I would get yelled at  if I told you who was the best in the business

– Did you appointment a Buyer’s agent or did you contact the seller’s agent directly?
There are so many ways people attempt to go after real estate.  Use a realtor, or don't.  In my opinion, if you are international, it is foolish not to use a realtor.  Also, if the bank has listed the property with an agent, GET YOUR OWN.  Agents are like property managers.  Hard to find a good one.  But you will know in your gut by their intelligence through e-mails or phone calls. 

– Did the agents provide any help/assistance with paper work to an international buyer?
As an agent myself, yes, all agents help with paperwork.  Once a property is looking good, you will want to also inspect where the agent can offer refrerrals for inspections.  FYI, it is now a law in Florida that home inspectors MUST BE licensed contractors.  Gone are the days where you can just go to the courthouse and get an inspection certificate. 
Agents assist in the contract for acquisition.  Make sure you understand the contract.  A good agent will also have your best interest at hand.  They will make sure the title is free and clear.  Title companies are good at doing this and if you buy in FL, you will likely close using a Title Company.  Post closing services include assistance to set up property management.  Once that is in place, the agents job is done.  Property Manager takes over.

– Time lapsed between the first contact with the seller’s agent to getting the keys in your hands?
Depends…How long does it take for you to find a property that you want to buy?  I've seen some investors like the very first one I send them.  Others need to see 20-30 properties.  Once a contract is executed, typically takes 20-30 days for cash closings.  Oh, and if you are buying, make sure NOBODY shares title with you.  This is YOUR property.  No sharing with agents…unless you for some reason want to.  It's a nationwide scheme…."put me on title with you and I'll watch this property like it's my own." 

– How did you manage the payment for the property from overseas – did you need to involve the ATO/IRS? Wire transfer?
Swift Wire.  Banks have international wiring instructions.

– Was communication over the phone/emails sufficient or did you have documents courier back and forth or even personally visit to close the deal? I understand visiting the property for inspection but once you have decided on the property was any more visits needed?
Phone / e-mails work for some.  I have had this one client for 3 years.  Never spoke to him on the phone…Only through e-mail and we have a wonderful working relationship.  Others prefer to hear a voice.  Get Skype.  It makes it easy.  Once property is inspected, property manager or realtor needs to do follow up until property is occupied by tenants.

– Assuming you had purchased the property as an investment, did you involve agent for managing tenants?
Some agents also do property management on the side.  Don't do it.  Good property managers focus solely on property managment.  PM is the BIGGEST factor in your investment.  Your property needs attention and someone needs to be held accountable.  If they are doing side business like sales, they likely aren't very good at either.  Most good agents have 2-3 property managers that are reputable.  Don't go find one yourself…Dangerous

– Anything else that you think I should know of?
Only thing I can think of is "Cheaper is not always better".  I think Jay Hinrichs and I both believe that there is "cheaper" and there is "trashflow"….Warzones are the target of international investors because there is a lot of inventory and realtors are pitching it overseas.  I own a property in a warzone.  It was a tester to see how it worked.  I can't sell fast enough.  In fact, I can't sell.  No quality invesotor will take it from me!  It's even hard to give away!

– I am assuming that paying for the property in all cash will be far more easier then getting a mortgage with a US Bank but am I even eligible for US mortgage as a Australian resident? There aren't any U.S banks or Fannie Mae / Freddie Mac lenders that will do international loans.  If you find a lender, they are likely a portfolio lender.  Nothing wrong with that, just know what you are getting into.  Cash is usually the preferred way to go if you are Int'l.

Hope this helps some.

Jay:  Little secret…A lot of realtor aren't smart!  I have seen realtors go on title to have an equitable position which makes them feel good about owning a piece of something.  Then they try to control it.  Then it turns into a disaster.  "Tenant in Common" is not used for SFR's.  I can't dignify much of it, because it makes zero sense, but it is a popular scheme. 

The Business Dept with the state is not smart either, otherwise the number of agents would be 25% of what they are now.  I'm serious, one out of every 4 agents seem to do something to constantly violate their responsibilities.  And I've seen it in NJ, MS, CA, AZ….it is not isolated. 

I have no idea Jay…Like I said, this is not my style.  I just read the paper. 

Aegis has only had to take back 1 property in 2 years.  Considering their volume that is very good.  My brother is the main underwriter of most of the deals.  He doesn't trust anyone else, not even in his own office to ensure least amount of risk.  He's a stickler but they run a very good program there.  If you aren't leary of every deal as a private lender, you will fold very quickly.

Hi Cheeves

Sorry have to disagree with you.

Yes there are US lenders who will lend to Non Residents.

We do a fair bit of US lending for British clients through a couple of UK marketing firms.

NCCP in Australia has limited what an Australian Brokers can or wants to become involved in.

All about Public Liability and of course Credit Act doesnt apply to non residents so we are help them.

Cheers

Yours in Finance

Scott

How are you? Been a  few day away from the message board.My partner is heading to Atlanta working with a bank out of France so he can get licensed to do loans again. Go to any of the major banks in Florida they are happy to lend international clients who want to buy in Florida. The group that was lending here in the states seem to only lend if they do front and back end lending.

Still working on a few other options. We do have a group out of Australia that are doing lending for our clients. We have partnered with this group. They seem pretty solid and the owner and the Vice president of the group have taken the time to come here and check us out. Which is rare. I am not going to put there name out here. They have several of our properties sold to there clients and currently in the loan process.I let you know. I would also want to introduce you to them..

Ricard would like to see what you have available as well

Talk soon

Alex