- lawsjs wrote: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.
Lawsjs
Thank you for the kind words.I believe things should be simple, and doing the right thing. Word will spread , doing the wrong thing word will also spread. The world is smaller then we think. Social media is at our finger tips. Information is free and easy to attain.
Monday or Tues going to have a break down of the rehab video for all to see. At the end of the day, I love this business and what I do. So it will come out in the videos, and the work we do here.
Talk soon
Alex
PS you were correct about your sister..Good stuff..
Alex
jayhinrichs wrote: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
Jay that is awesome so I expect some funds for some Charlotte holds.
LOL good post…
Alex
emma171 wrote: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…. My parter and one of our cash lenders are in it to win it.I like the one on one type relationship.Slower but not just trying to cash out on every one who comes knockingfinding 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". Yes and No been working with a lawyer on setting up LLC shell up and selling as a business. Jay met the lawyer I am talking about. Then again I am a real estate and house guy so a bit over my head.
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… Yes to many Australian and American companies alike are selling in so many markets. So they have inventory to cash in on. Not a big fan of this. That was main reason we pulled out of Atlanta. In Charlotte I have all the extra"s that I need to run a large company. Living here and knowing every one helps. So those are the intangibles that help my company. Now on the other hand some one like Jay being he was in the lending business.As he lent funds to me back in the day and we did not even know.At least I was in good standing with those loans. Jay has lent to many teams like myself. So his know how is superior to most who are just selling to make a quick buck.
. 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…. Here is simple cost and example years ago I had a pressure washing company and I went out in spring and fall and charged $99 to $180 dollars per house to clean vinyl siding .Cutting grass my guy charges $45 bucks. Cheaper if I give him bulk. So many expenses that people are not seeing or believing. Ac we as a company make sure out investors get the units services twice a year. Add in the $99 fee but saves on long term replacing unit.
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( Vacancy rate and exit strategy is one thing that worries me about Atlanta )
. 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,( I was but just a teenager ) this is OUR time. ( sure is today is the day to buy and hold so 10 to 15 years from Now WOW...
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 LOL Yes Jay is getting well known , competition between him and me .All in good fun, he is way smarter but I got way more energy .He will understand that inside Joke .
Talk soon
Alex
kylermrice wrote: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.
Guys cash flow today and hope for a appreciation later. So diversify in any and all markets you buy in.
Alex
CASH IS KING
Going to get that as a tattoo when i clear my first million in a year, lol
I have that on my forehead… circa 1993… then it got removed around 2001…. then I thought put it back on circa 2006… only to have it removed in 2008….
now might not make 2011 but 2012 I am already picking my colors and where it should go.
lol, man. you will have to post a youtube video of you getting the tat and then jumping into a pool of cash, that would be a great in four face video for your website. I know some good artist in Portland, hook you up with some real nice tat work!
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,( I was but just a teenager ) this is OUR time. ( sure is today is the day to buy and hold so 10 to 15 years from Now WOW...
i was just a kid in grade school, but i read about the 80's market and am glad i get to be part of the greatest real estate opportunity ever. It is now my full time hobby/job. I would like to hear Jay's thoughts on how this housing market compares to past markets that you experienced with these type of opportunities.
kylermrice wrote:lol, man. you will have to post a youtube video of you getting the tat and then jumping into a pool of cash, that would be a great in four face video for your website. I know some good artist in Portland, hook you up with some real nice tat work!Not to get off the real estate topic but my son in law is a tattoo artist of some reknown here in Portlandia
Nice, have to check his work out sometime then
kylermrice wrote: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,( I was but just a teenager ) this is OUR time. ( sure is today is the day to buy and hold so 10 to 15 years from Now WOW...i was just a kid in grade school, but i read about the 80's market and am glad i get to be part of the greatest real estate opportunity ever. It is now my full time hobby/job. I would like to hear Jay's thoughts on how this housing market compares to past markets that you experienced with these type of opportunities.
The 80's I was in California bay area, and the Califorinia market was a market unto itself.. Alot like the Aussies are experincing the last 5 years. Houses we bought for 200k in 82 were 750k by 87…. I bought a lot in Palo Alto to build my personal residence in 86 for get this 705k 1/4 acre scrapped an old 20's house..
Anyway early 80's saw us coming out of a deep recession in the 70's that was post vietnam lack of production, had nothing to do with housing., you could buy a house in Cupertino for 40k in the last 70's and maybe 100k until 82 or so… Then Apple and HP hit and well if anyone knows Bay Area Pennisula real estate the rest is history… housing there is basically $1,000.00 a sq ft and up.
Not to be confused with a nice Atlanta buy for $30.00 a foot. or the low end stuff in Kc at well Five bucks a foot or whatever you pay for that product.So prices peaked in 89 then we had the big earth quake and the first Iraq war and the market came to a screaching halt. And you saw a lot of out migration or brain drain not to be compared with White Flight… And a lot of that brain drain came up to Portland and Seattle ( think Intel in Portland) and Microsoft in Seattle. This cause the Nw market especially in seattle to climb in the early 90s. Prior to Microsoft the Seattle market followed whatever Boing was doing. And in the 80's it was dead in Seattle.
The CA market 89 to 93 saw price compression even in the pennisula and it was brutal 50% or more defaltion on the high end.
I was in Palo Alto and our prices held. It was the 4 to 8 million dollar houses up in Los Altos Hills and Woodside that got hammered. My brother in law bought a house that originally sold for 4.2 for 1.3 in 93. I sold palo Alto and Moved to the Napa Valley and bought a foreclosure at Silverado Country Club.. At that time Homesavings and Loan was the largest owner of homes in CA… Then market stablized. But you still could not sell a home you bought at the peak in 89 for what you paid for it until the .COM craze took off in 97 prices in the Bay area doubled in 3 years. and those that bought at the bottom are the US versions of our friends from OZ right now that have seen these big equity gains in their real estate. 911 saw a 18 month blip then the housing market became soup de jour all over the US. ramapant speculation in places like Florida Vegas Pheniox.. Investor were creating false markets. And when the GFC hit well we all know what happened.So bottom line Prices falling like they have is not unprecedented it happened in CA cira 89 to 93.. And prices going up as markets turn is not unprecented either. Its about Jobs ( Silicon Valley) Land supply created by either zoning codes ( Portland) or by physicality of the area ( Bay Area surrounded by water and mountains) Seattle same thing.
As oppossed to the Mid west and texas unexhaustable land supply, You will always have pockets in those areas were the weathly will congregate,, But the general housing stock will follow replacement value pricing with a little profit margin for builders.
One of the Aussie posters on this site talks about he looks at construction cost heavily to determine what is a good buy.
And generally in a market like charlotte ( alex home town) and Atlanta AZ LV Is see the same scenerio…Buying fairly new homes at 1/3 of what it cost to build them….As oppossed to a market like Texas that has not suffered a big down turn but does not go up in any apprecable manner.. I personally think the markets that are off the highs by 75% and are established state capitals will do better over time than a Texas market that remains stable because of jobs and growth.. And the primary reason I beleive this is there is just too much land and builders can throw houses up in 60 days that will compete well with rental stock.. We see it today there are builders building and selling whole subdivision in Texas to investors. Same thing happened in Atlanta 5 to 7 years ago.. The investors that bought then of course have serious negative equity.
OK thats about it for now
Thanks Jay!
always enjoy your perspective, i don't know to many people that have the knowledge and wisdom that u have gained over the years.
Cash is $KING$
Brilliant thread, thanks for the great information – I'm also finding global real estate to be an exciting, profitable and great niche to be in.
))Couldn't agree more with Alex – credibility, doing the right thing, knowing your stuff and presenting it clearly are the keys to successfull business, in this field and all others.
Ziv Nakajima-Magen | Nippon Tradings International (NTI)
http://www.nippontradings.com
Email Me | Phone MeZiv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property
zmagen wrote:Brilliant thread, thanks for the great information – I'm also finding global real estate to be an exciting, profitable and great niche to be in.))Couldn't agree more with Alex – credibility, doing the right thing, knowing your stuff and presenting it clearly are the keys to successfull business, in this field and all others.
Thanks for the compliment , send me PM and some contact information .Stopped over in Japan this past Nov.
Alex
Alex SC wrote: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
Great post Alex thank you, did you ever do the youtube video etc?
TZ wrote:Alex SC wrote: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
Great post Alex thank you, did you ever do the youtube video etc?
No this forum gripes to much I think if I should properties felt like I got my wrist slapped to many times.
Long story short property sold wholesale to another investors as the loan fell through as company did not want to do such small loan. Which is typical in the USA. I am doing another property right now actually we in process of about 14 rehabs. This one is going to be good case study.Picked up for $51,500 ( Charlotte NC ) rehab is $17,500 which included my companies holding cost. One of My cash lender is going to lend me $70k which cover purchase , rehab, closing cost. So I am now into the property for $70k plus interest to cash lender but in general 10 % on cash for 90 days. So $77k before I sell the property. We like to clear $5k a deal when we sell. This is where having a staff comes into play.We no longer manage deals but yet my payroll is $5600 a week. So now back to the pricing when we do this as a service and sell a service. One can always do alot better if they buy direct like you down. People like me ad my company are for investors who don't want to do it them selves. At the same time people should investigate and check things out.Fly out look at homes and meet every one..Well rambling now but you get the point.
Now here we go as people see the profit side.Most of our website deals are pushed to the max being most of our properties sell through re sellers. Advice to every one who buys ( NEGOTIATE) with the actual sellers. For example one property I am liquidating for $69k on our site it says $84k by the time the resellers – resellers sell the property this is what happens. So prices are always better when you negotiate direct. in that I am paying cash lender and my profit which at $69 is $3k
Talk soon
Bank Letters speaking to capacity and capability etc etc.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
