So much talk about how USA or Australian real estate groups are marking up the properties that we buy. So I can't speak for others, but I will speak for my company on how and why we do what we do. This is an example below:
I am going to list a property and what we purchased it for. This is without plans and exit strategies on this property.
I want everyone to realize what goes into buying, selling , marketing , and rehabbing the property.What a lot of people are missing is everything that comes along with buying a property. If I were to buy and sell myself, sure the price comes down.We have aligned with partners in different countries, which opens the doors for for us to enter different markets. Those wholesalers need to be paid. One group without mentioning names both the owner and VP of operations have come here to visit us. That says a lot about an international team. Our future partner from Singapore will be in town next week 11th- 18th to workout partnership plans.
A lot of people are leaving out the cost of doing business for us as an investment company and a wholesale company. For example, I am set to fly to London and then possibly Perth and Adelaide in one trip. Again, for a company these things cost money to do, along with having a staff and keeping the lights on. For a larger investment team, there are costs associated with them being able top buy and sell multiple properties. We make our money by turning volume not just from one of our deals.
Here is the property that we are about to send out to our cash lenders in the USA and International clients. We just got the contract accepted to purchase for $32,100. Now for me closing cost and rehab is going to be roughly 10k .Then we over borrow about $2k for what I call operations cost. This house will rent for $750 to $800.
http://carolinaliquidator.vflyer.com/home/flyer/home/131965000
Now the part that most are not seeing is that this property can, firstly, be sold through our direct marketing program through existing clients. So very little cost to me, as I only owe my cash lender points ( % ) for days I borrow funds.
If it does not sell, then it is time for me to contact my international and national wholesalers. They also need to get paid since they are providing a service, as well as taking the time to build a business relationship with my company.
So now the purchase price would be about $59k . This covers my cost of paying my cash lender, paying a wholesaler if they sold the property, and paying myself.
I just want people to see all that is involved with a real estate deal. Yes, we do charge for our services and we do have partners who also charge for their services. I hope this shows how and why when a deal is purchased for $32,100, why the property is being sold for $59k. We are working with a few financing options with a few different sources for the international clients. I have not physically seen any of these properties close through international financing, so that is why this is based on a cash deal only. With international financing in place, this would also help the purchase price.
Hope this helps
SincerelyAlex
skype Alex Franks 2002 Location Charlotte NC USAAlex [email protected]
Look forward to feed back !
Looks fair to me mate,
Your mark ups arent that big. People want something for nothing these days.
Engelo
EngeloRumora | Ohio Cashflow
http://ohiocashflow.com/
Email Me | Phone MeF@#$ THE REST WORK WITH OHIO CASHFLOW TO INVEST
Nice Alex, what was a heck of a good post
that was*
engelo10 wrote:Looks fair to me mate,Your mark ups arent that big. People want something for nothing these days.
Engelo
Engelo
After number of calls and Skype conversations with international clients.I think the fear of buying a property and being taken for a ride is high on most minds. If clients can do a little research and see the what the property is being purchased and sold for. For us it is creating a comfort level for the international buyer along with educating out investor.
Talk soon
Alex
kylermrice wrote:that was*Kyler thanks
Hoping to open eyes.
I did leave out if I sold in 30 days or less my interest payment to cash lender would be only $1800 so adding that and $4k .This property could sell for $51, 800 and every one would be getting a great deal.
How is KC doing
Alex
Alex,,, most investors are going to want to be your cash lender,,,, I would bet
jayhinrichs wrote:Alex,,, most investors are going to want to be your cash lender,,,, I would betJay I would say 95 % of our clients for Example Jenny that we both know from LA. They come in as cash lenders or home buyers. Eventually ending up as both with our company The model works and has been successful.That says alot about me and our company here.
Alex
Alex
If this was 2007 and I still had all my bullets you would be the man..
turn and burn…..
You have a great operation and I have met your staff very nice dedicated folks.. look forward to working on some long term holds
jayhinrichs wrote:AlexIf this was 2007 and I still had all my bullets you would be the man..
turn and burn…..
You have a great operation and I have met your staff very nice dedicated folks.. look forward to working on some long term holds
Me too I want to keep the 67 houses and figure out a way. This is long term retirement.
Alex
@ Alex
Things are good here, this is my favorite time of the year to buy other than the tax sales in August. Nobody really buys till the spring here. Get most of my low income rental properties this time of year for cheap. Hope you are doing well in your neck of the woods
Great Stuff Alex…Aussies out there looking, here is a legitimate US property guy who is genuinely doing the 'right' thing by himself and his purchasers. <moderator: delete advertising>. Anyone thinking of dipping their toe in the water with the US (and I think you cannot lose) should look no further than these guys who are honest, open and tell it like it is.
I would also like to add that people who sell RE with RE licences in the US give you (even if you are a foreigner) a govt backed legal protection that any US citizen gets. It is very powerful if anything goes wrong. Not just anyone can sell US RE…
I hope and pray that the time of the fly by night rip off Aussie fast buck merchant has gone. Use the experience of these guys if you are a new investor. I haven't bought through them but every instinct of mine says they are worth looking at very seriously. I could almost promise you that you would learn more from speaking to someone like Jay, Alex, Emma or kylermice for 20 minutes than spending $20k on a 'unique buying tour' of the US.
Lawsys,
I think there have been some really good points of view brought up on this site since I first found it a year ago. and I see the OZ investor now considering Net returns that are a little more realistic than best case scenario… It took us a year however we just closed our first set of transactions 7 Notes ( properties) to a group of medical professionals in Perth… I really liked the way the transaction went together.
The accountant found us on the http://WWW... we then sent our Credentials package first off, which it still amaze's me the amount of uncredentialed companies out their doing this. Any way that was first make sure who they were doing business was licensed to do it.. Background checks on the principals… Need to make sure we are not Lebanese Terroist
Bank Letters speaking to capacity and capability etc etc.Then we went into the investments themselves we fully went over what true NET yeild was and is… And how EQUITY share works in the US… Once accountant had all those facts together he presented to his clients who then made buying decisions within a day. We have a very small marketing fee that we pay for referrals. it was offered to the accountant he refused and wanted us to credit the buyers which we did. Their main concern and the topic John kept coming back to is.. Ya we can buy a house thats rented now but we do not want to deal with it when the tenant moves in a year. and or have a vacant house, just do not want to deal with the Risk's associate with management. ( of course music to our ears as thats who we are and what we are about)
So bottom line. these Buyers spent some money on a Aussie professional to do their due diligence for them. found our product determined between risk and reward they would go with safe bet.. No up front fee was paid to look at inventory.. The inventory was hand picked for each investors needs… And there you have it . A very business like transaction without all the sale hyperbole' of invest with my company you can get 18% net and 40% gross and my property manager is the best etc etc.
Our next exciting news is that we are being considered as a exclusive agent for our product at one of the largest RE firms in NZ and AU they have over 350 offices. and have no presense in US… AGain they have been doing due diligence even have a front man over here in the states who is US based and is a RE broker….We came referred… So again NO LOAD to look at inventory then a fully managed investment with predicatable cash flow..
This is were our US business comes from IFC s Independant financial consultants that refer clients to us.. Again for predictable returns and safety. Most us investors unless they really like to work on the 3 T's tenants trash and toilets , are really resignating with what we are doing.
One of the big powerful US endowments has just stepped in… the Columbia Endowment just put 50mil out in Pheniox and are buying up to 400 SFR's 80% ltv 6% caps…..
So this buying opp we are seeing may not last as long as everyone originally thought, Up until now you had all us little guys doing a 100 a year etc…. We have put our package in to get the FNMA investor homes direct from FNMA.. So hopefully those will be coming our way as well..
JLH
NO! The buying opportunities need to last 5 years more
In your sandbox Kyler they will always be there until you give up.
What I am talking about is the nicer inventory,,,, the 2oo to 300k house that is being picked up for 90 to 120k
150 house in atlanta thats being picked up for 50 to 70 that kind of thing
the super low end 5 to 10k deals will be there until they either fall or burn down… There is no retail hope for them so its only those that can and will pay cash and run them as a little business… There is definatly an opp for you to load up on these methodically for as long as you can stand being a renovator landlord…
Just like Detroit, toledo Rochester, any of the upper mid west cities when your dealing in the lowest priced homes they will just continue to circulate between investor just like they have since white flight and the late 60 to 70's these are never going to be more than what they are…Inexahustable inventory.
Jay it is fantastic – I echo Jeremy’s sentiments. I made a big decision that I will always focus on working with an individual versus selling properties…. I love the level of involvement that I can keep with each client and each of the properties – I am a thrill of the hunt and the rehab person…. finding the gem is the goal – plus my partner is a builder.
It might be hard slog but I would rather every investor learns what earnest money deposits are, proof of funds, title transfer processes, title insurance, US property management nuances etc than get whacked with buying shell LLC’s – shelf LLC’s (please heavens – the latest recycled issue – buy a “seasoned” LLC for the purposes of obtaining financing) and get burnt. If people are entering a new market, they SHOULD be interested in these matters and should understand that even if they want “no involvement”.
Danger Model
The danger is the same any organization has – organizational growth and managing growth… and this is what I personally feel has happened. Probably starting with good intentions, Australian Facilitator (AF) sells a property with all good intentions – yields are great, everything goes brilliantly, AF sells lots more people properties – maybe they start out with a choice element…. and the first 5- 15 clients do get some great deals in great locations. All of a sudden, the person selling the properties has 30 people wanting a property – and slowly but slowly their “standards” slip… there just aren’t 30 good properties on the market and they are too busy handling the front end…no longer have they even SEEN the properties – but wait, they are needing to sell (that is their model… just sell)…. so now they have to “partner” up with people they “trust”…. now they have no clue what those people are sourcing and if they even are…so they are sell quickly, make hay while the sun shines and then retire or join the seminar circuit…… Or disappear as one “famous” Melbourne company apparently has. This is fine, so long as the investor KNOWS what they are buying and knows how to take matters into their own hands at the end….I mention it a million times when I talk about realistic nets – why doesn’t anyone think the simple things like lawn mowing up to once a week will be a factor ($20 a pop) equals about a pool in Vegas is $100 a month (pools… aka vegetable patches), HOA’s, gutters cleaning, composition shingle roofs, quarterly maintenance/check ups on a/c’s, termite boosters…. not hard, not a no, just a consideration and needs factoring in…. I personally have a rule of thumb to buy at least $15k cheaper in Atlanta and hope for $125 more in rent to equate widgets to a Vegas buy just because there are more “bits” to the properties in ATL and likely higher vacancy.
I think we are starting to see people thinking about their longterm investment goals and strategies in the US market and understand that this is just the first step… but BOY OH BOY, what a step. I wasn’t here for the late 80’s unfortunately but for us for now, this is OUR time. Even just freedom of information means someone in a foreign country can seriously consider things our parents barely could have dreamed of. Buying interstate in Australia was epic 10 years ago.
Yep, I agree with the lifespan having been dramatically shortened with current legislation… I had thought when Vegas “popped” I would have at least 8 -12 months in another market at this stage and hopefully though that will be the case…. from then it will be playing all the different nuances to the US market.
Jay, I just had a client ask me about you so this is all a collective step in the right direction.
Wasn't talking about cash flow properties Jay. I invest in Florida for the type of houses you are talking about. The gem on the water that is 90K that was 500K back in the day. I can pick up about the same house here with the same potential as Atlanta. Wouldn't mind getting one in Mesa, AZ before all the for closers dry up there.
If it wasn't for my cash flow houses i wouldn't be able to buy my long term investment properties. The passive income they generate fuels all my buying power. Some use loans which is riskier to me than doing it this way with cash cow rentals.
i let u guys keep the modest returns with low risk.
Alex SC wrote:So much talk about how USA or Australian real estate groups are marking up the properties that we buy. So I can't speak for others, but I will speak for my company on how and why we do what we do. This is an example below:
I am going to list a property and what we purchased it for. This is without plans and exit strategies on this property.
I want everyone to realize what goes into buying, selling , marketing , and rehabbing the property.What a lot of people are missing is everything that comes along with buying a property. If I were to buy and sell myself, sure the price comes down.We have aligned with partners in different countries, which opens the doors for for us to enter different markets. Those wholesalers need to be paid. One group without mentioning names both the owner and VP of operations have come here to visit us. That says a lot about an international team. Our future partner from Singapore will be in town next week 11th- 18th to workout partnership plans.
A lot of people are leaving out the cost of doing business for us as an investment company and a wholesale company. For example, I am set to fly to London and then possibly Perth and Adelaide in one trip. Again, for a company these things cost money to do, along with having a staff and keeping the lights on. For a larger investment team, there are costs associated with them being able top buy and sell multiple properties. We make our money by turning volume not just from one of our deals.
Here is the property that we are about to send out to our cash lenders in the USA and International clients. We just got the contract accepted to purchase for $32,100. Now for me closing cost and rehab is going to be roughly 10k .Then we over borrow about $2k for what I call operations cost. This house will rent for $750 to $800.
http://carolinaliquidator.vflyer.com/home/flyer/home/131965000
Now the part that most are not seeing is that this property can, firstly, be sold through our direct marketing program through existing clients. So very little cost to me, as I only owe my cash lender points ( % ) for days I borrow funds.
If it does not sell, then it is time for me to contact my international and national wholesalers. They also need to get paid since they are providing a service, as well as taking the time to build a business relationship with my company.
So now the purchase price would be about $59k . This covers my cost of paying my cash lender, paying a wholesaler if they sold the property, and paying myself.
I just want people to see all that is involved with a real estate deal. Yes, we do charge for our services and we do have partners who also charge for their services. I hope this shows how and why when a deal is purchased for $32,100, why the property is being sold for $59k. We are working with a few financing options with a few different sources for the international clients. I have not physically seen any of these properties close through international financing, so that is why this is based on a cash deal only. With international financing in place, this would also help the purchase price.
Hope this helps
SincerelyAlex
skype Alex Franks 2002 Location Charlotte NC USAAlex [email protected]
Look forward to feed back !
Again I am wanting to walk every one through the deal.
On Monday or Tues I will provide a video of the property.Showing the repairs that will be needed , and a complete walk through of this property.So every one can see what I am seeing. ( Just FYI Jay Hinrichs showed me some techniques to improve my rehab and working on the budgets of these jobs). This property is now closing Friday .Our California Lender ( Jay you know her Jenny K ) is doing this loan. Now at the same time we are borrowing $45k. So one can see exactly how the money was used. Now we already have a contract to sell this property from our LA client. Which I will also include a copy if some one wants to see a closing statement.
$55k is the purchase price and they are getting 20 % down loan (USA financing only )So now lets look at the total loan $45k paying 6 points on the funds. Interest to our cash lender $2700. $2k to our wholesaler. So we are at $49k after closing Roughly $5k profit. Skinny deal but quick.
Again doing the right thing can go far in this business. Not a killing but doing multiple deals like this can turn a tidy profit. Did have sales price for $59k. ( power of negotiation got me down to $55k )
Thanks all for either posting or responding on this thread.
Sincerely
Alex
Sorry my typing and grammar , skills are not up to Jay , Lawsjs and Emma LOL
kylermrice wrote:@ AlexThings are good here, this is my favorite time of the year to buy other than the tax sales in August. Nobody really buys till the spring here. Get most of my low income rental properties this time of year for cheap. Hope you are doing well in your neck of the woods
Whats up Buddy how are you. Cold here one day and sunny today.Crazy weather we are having in the South Carolina.
Alex
You must be logged in to reply to this topic. If you don't have an account, you can register here.
