If you were drowning and you only had $100,000 USD to save you, which cities would you buy a few SFR foreclosures in and why?OK so that’s a bit melodramatic, but it you only had 100K left what would you do with it?Please don’t recommend me to enter into anyone’s property package or scheme, as that isn’t my question here.
I thought I should add further criteria that I usually try to stick to--Minimum 3 bedroom-Brick construction-No more than 20 years old-No HOA-Not a crime ridden neighbourhood.
I’m thinking of buying in Florida again and engaging the same PM I have there who are extremely professional. The desire to branch out and try new cities is very alluring too.Cut your losses and find a new hobby. No offense, but your the one of the worst horror story investors ever.
If your property management is professional, they should be able to point you in the right direction of a good realtor. Buy just one good one, buying two with that amount of money will get you in the same trouble as AZ.
Thanks for that; nice comment. To clarify, I've made money overall and come out on top. A lot of first timers come out with a loss.
And I bought properties at bottom of the barrel prices that are likely to be worth a lot more in 10 years time, whilst I still have monthly income from rent.
I was scammed once because I let emotion interfere and handed over money to someone who befriended me over a period of 1 year. Lesson learned and now I know what not to do in the future.Just for comparison's sake, for that money you'll get 4-5 pre-rented apartments in the heart of Fukuoka City in Japan (Kyushu's capital), no extra rehab needed, probably netting around 14-17% before taxes (all other costs already deducted). No warzones. Renters who stick around for years. Pure cashflow. (You want capital gains, good luck to you, I'll stick to the poker tables).
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
hahah your scenario really was melodramatic.
can the SFR property be anywhere in the world, or only in the US?
labradorinlove wrote:If you were drowning and you only had $100,000 USD to save you, which cities would you buy a few SFR foreclosures in and why?OK so that’s a bit melodramatic, but it you only had 100K left what would you do with it?Please don’t recommend me to enter into anyone’s property package or scheme, as that isn’t my question here.I would just continue purchasing foreclosures in Atlanta, there are other markets that do interest me, however I feel I need to stick to one area to reduce the risk/challenges.
Its hard enough to find 1 good property manager let alone 5 or 6. Also logistically as a foreign investor I would not want to be travelling to 3 or 4 States.
In Atlanta 100K USD wont buy much, I have been averaging around $60,000 USD per property, this is changing fast.
I like Atlanta as it stacks up for a number of reasons – cashflow, newer builds, not a one horse town, diversified industries, warm weather.
WI
WI Thanks; I was already thinking about Atlanta.
You need to do your research carefully. Most people lose money because they are dealing with the wrong person at the other end. The secret to great investing is the quality of your contacts in the US. If you are not prepared to do that then you should not be spending your money there. Frankly I can make you more money in Australia.
Nigel Kibel | Property Know How
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If it were me…I would leverage the $100K into 3 good quality A grade homes in better neighborhoods. Better quality area's & homes will attract a better quality tenant and if/when US homebuyers start buying their own homes again these will be the area's where you will see the demand.
There is merit with worldinvestors comments about not spreading your wings too far with too many cities….your then increasing your challenges that come along by having so many different companies to deal with (property managers etc). Concentrate on 1 or 2 and become proficient in those cities. The US is a big place….you will find other markets within markets to enable you to diversify.
worldinvestor wrote:labradorinlove wrote:If you were drowning and you only had $100,000 USD to save you, which cities would you buy a few SFR foreclosures in and why?OK so that’s a bit melodramatic, but it you only had 100K left what would you do with it?Please don’t recommend me to enter into anyone’s property package or scheme, as that isn’t my question here.I would just continue purchasing foreclosures in Atlanta, there are other markets that do interest me, however I feel I need to stick to one area to reduce the risk/challenges. Great advice …. for example I love Florida for many reasons but logistics wise a night mare for me. So I do buy but in my brothers neighborhood only.
Its hard enough to find 1 good property manager let alone 5 or 6. Also logistically as a foreign investor I would not want to be travelling to 3 or 4 States. Even for me traveling back and forth to Atlanta was a nightmare and it was a 38 minute flight.
In Atlanta 100K USD wont buy much, I have been averaging around $60,000 USD per property, this is changing fast. Charlotte same thing .Homes priced $59k low end $89k higher end..
Alex
Alex SC wrote:I would just continue purchasing foreclosures in Atlanta, there are other markets that do interest me, however I feel I need to stick to one area to reduce the risk/challenges. Great advice ….Don't quite follow – I get the logistics bit, but how exactly does putting all your eggs in the one city basket reduce the risk by anything? In my view it vastly increases risk – unless I'm missing something in this equation? (assuming you'd do your DD wherever you may invest, wouldn't spreading your investments geographically reduce your risk far more?)
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:Don't quite follow – I get the logistics bit, but how exactly does putting all your eggs in the one city basket reduce the risk by anything? In my view it vastly increases risk – unless I'm missing something in this equation? (assuming you'd do your DD wherever you may invest, wouldn't spreading your investments geographically reduce your risk far more?)
You haven’t dealt with US trades, banks or PM’s. It is like herding cats just making them understand what it is that you want, let alone getting them to actually do it. Two cities = 10x the problems of one city. Three cities would be 100 times more difficulties.
It is VERY difficult for someone who hasn’t been through the dramas to understand. Simple things like ‘I haven’t noticed any rental deposits in my account for these properties over the last 3 months’ and the response ‘Oh, you didn’t let us know you actually wanted them banked’. dealing with the US is not something that is easily done!
zmagen wrote:Alex SC wrote:I would just continue purchasing foreclosures in Atlanta, there are other markets that do interest me, however I feel I need to stick to one area to reduce the risk/challenges. Great advice ….Don't quite follow – I get the logistics bit, but how exactly does putting all your eggs in the one city basket reduce the risk by anything? In my view it vastly increases risk – unless I'm missing something in this equation? (assuming you'd do your DD wherever you may invest, wouldn't spreading your investments geographically reduce your risk far more?)
In my playground Oz, I invest in all States, I follow the cycles and I think this is a great strategy to reduce risk and it has worked very well for me.
US – I am dealing with a different beast, as mentioned the banking system a challenge, property management statements and the psyche around PM service is frightening. Finding suitable Subdivisions that's another story, the list goes on.
Its just not practical to try to repeat this process somewhere else.
I have spent so much time trying to understand/research Atlanta and believe it or not even when I ask the locals about various areas etc. they have no clue, coz its spread out and they seem to only take an interest in their own area. Maybe I am speaking to the wrong people… who knows. I believe I have a better chance of getting it right if I focus on one State.
Cheers, WI
Enlightening, thank you.
I won't add anything else about how things are different in other countries, because, as I've learned on this site, that's considered blatant advertising
Q1 – have any of you found, in your dealings with turnkey operators like Alex or Jay here, that they take any of the edge off these difficulties at all?
Q2 – how about buyers' agents? wouldn't there be nation-wide or at the very least state-wide agents that can help an investor who wants to spread their investments a bit more logically risk-wise? Alex mentioned they are only used for large investment portfolios/budgets, but I'm wondering, if someone's buying three properties for example – wouldn't it be already worth using one?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,
I understand the advertising thing – I actually think a Japanese property would stack up very well. You don’t have (many) crack head losers hell bent on ripping off the system in Japan. I have spent a fair amount of time in Japan – my problem is I can’t speak the language, and especially after my US experience that would make me nervous:) I can totally believe you about the ‘easy’ cash returns, dealing with the Japanese would be a walk in the park in comparison to low end US rental property.I would be very ‘nervous’ dealing with a buyers agent based in Australia. It might be worth anyone reading some of Speedy Gonzales posts on the pitfalls.
My sister is a buyers agent (emma171) and I know she does great work. Not just because she is my sister but because she only became a buyers agent originally to help out people who have been royally screwed.
I really like Jay’s system which is a partnering type deal – he gets the worry and half the cash, you just get the cash. A bit like investing in Japan maybe.
Alex and Kyler really ‘know’ what they are doing as well – it oozes form their posts. They are in there doing the hard yards and doing it sure for money, but fair money and nothing like the scam artists that are out there.
I have had issues with WI (above) over ‘other’ matters, but she speaks the truth in what she says and I agree wholeheartedly with her property market comments above and elsewhere. She would be another person worth contacting.
All the people I have mentioned are clearly treating this as a profession and not just a way of making money if they weren’t selling pink batts or Tea Trees.
It is a complex area, and certainly not for the feint of heart – there are plenty of mean nasties out there to rip it out of you:)
zmagen
I have purchased 8 properties to date and I used buyer agents to source properties direct from the bank, I personally would not do it any other way. They also arrange quotes for the rehab and manage this until completion. I provide the criteria – ie, sq ft – 3/4 bedder, age etc.
I could not achieve the awesome deals,(30% of building costs) if I was purchasing a turnkey product. Not bagging turnkey, but just not for me.Cheers, WI
lawsjs wrote:I really like Jay's system which is a partnering type deal – he gets the worry and half the cash, you just get the cash. A bit like investing in Japan maybe.A bit, except for the half part. Having said that, from what you've all been posting here, Jay has his work cut out for him, so sounds like he deserves every penny. As you mentioned we (or independent investors) don't need to deal with even fraction of what these guys are going through. As for language barriers – there are a plethora of legitimate solicitors, accountants and agents, particularly in the big cities, who will gladly do everything for you (and as you mentioned, it'd be very rare to get scammed in Japan.) However, their prices are outrageous (in my view at least), are not worth it unless you're going in for huge buckets of yen, and deal only in the major areas (Tokyo, Osaka, Kyoto, Hokkaido) which are as "bubbled" and as low on the returns as any other international port of call may be. As for buyers' agents…(whoops, sorry, should probably stop right there
lawsjs wrote:Alex and Kyler really 'know' what they are doing as well – it oozes form their posts.Couldn't agree with you more, and have mentioned this in the past. When I go for the US, Alex and Jay are definitely where I'll be going. (Haven't read anything by Kyler yet, but will keep my eyes open, thanks for the tip).
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
worldinvestor wrote:zmagen wrote:Alex SC wrote:I would just continue purchasing foreclosures in Atlanta, there are other markets that do interest me, however I feel I need to stick to one area to reduce the risk/challenges. Great advice ….Don't quite follow – I get the logistics bit, but how exactly does putting all your eggs in the one city basket reduce the risk by anything? In my view it vastly increases risk – unless I'm missing something in this equation? (assuming you'd do your DD wherever you may invest, wouldn't spreading your investments geographically reduce your risk far more?)
In my playground Oz, I invest in all States, I follow the cycles and I think this is a great strategy to reduce risk and it has worked very well for me.
WI,
This is very common in the RE sale industry,,, Agents tend to specialize in a focused market.. And Atlanta Metro Plex is just so huge its not realistic to think any 1 agent will be versed in all areas..
I remember in my early years of selling real estate I was living in a county North of San Francisco, that had a population of 50k and the towns were 2 to 5k each and were 5 to 10 miles apart.. Clearlake " largest lake in N. California " sat in the middle of the county,, and most realtors only new 1 maybe 2 towns… I knew the whole county, and sold the entire county. I also bought tax foreclosures where ever they would present themselves so I got to know every square inch of that county… I had agents in my office if you did not want to buy say in Lakeport, they would just refer you off to another agent, I never let anyone go away,, But I liked to drive and I was young then.
Same is especially true in Atlanta , and the same could be said for any big Metro Plex.. Your not going to get many RE agents that work the San fernando valley,,,, ( Valley Girls) to sell homes in Temecula for instance. Or SF Bay area agents that work Marin county to sell San Jose.. <moderator: delete advertising>
JLH
I haven't read any posts by me? Lol, u have commented on them before.
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