Hi everyone. I'm off to Jacksonville on Thursday for a couple of weeks, then having a quick road trip, hopefully taking in Cape Coral, Orlando, The Keys, Miami.
The trip is part holiday, part property investigation, with a view to possible purchases. I was just wondering if anyone had any contacts in Jacksonville that would be worth meeting up with? Has anyone bought in Jacksonville. What were your experiences? Which areas are recommended and which areas should be avoided?I've heard some people say that Jacksonville is a good place for investment and the Panama canal expansion will give the area a boost. Others have said investment opportunities are much better in Cape Coral / Fort Myers, Orlando, Atlanta etc. Is it too late for investing in Cape Coral – it sounds to me like it was the place to invest 2 years ago and there has been a lot of capital growth in that time?
For those who have purchased in the US, how is it all going? Has it been worth it? Will you be doing it again?
Who is the best person to use to set up LLC etc (and is this the best vehicle to buy through). I already have a couple of Trusts set up in Australia, should I buy through them in an LLC?
It seems to me that the people actually based in the US advise not to invest in areas with high rental returns due to the tenant and management problems. I went over to San Antonio about 6 years ago specifically to look for property but came away disappointed because it seemed impossible to find good management. Looking back I'm glad I didn't buy anything then with the way the exchange rate has gone and the fall in house prices in the US.
I've been emailing a bloke called Scott Alan from Myrealtysource,com who seems very helpful and knowledgeable and recommends buying in Cape Coral area, but I have my reservations as it sounds like it's too late to buy there. Any comments?
I've renovated lots of houses in Australia and may be looking at doing that in Jacksonville (if it's a good strategy there), as our ties to Jacksonville may be getting stronger, so I may be spending more time there. I could go on and on and on, but if anyone has anything to tell me that they feel would be useful, please don't be shy.
Hopefully I can meet some good property people in Jacksonville / other areas of Florida and report back on my experiences to help other people in the future. Looking forward to receiving lots and lots of useful comments from you all.
Phil.
Cheeves ?
Be honest if I was going to Florida I would talk to Cheeves from this forum. Again not promoting or advertising but this could be a decent contact for the area.
Also send me PM I got a friend from Adelaide who purchased from a Australian reseller in Jacksonville and he has been basically left hung out to dry. Instead of me putting any ones name out their. Pm me and I will forward my friends his contact information so he can fill you in.
Good Luck on your trip Florida is nice this time of year. Heat has not set in just yet.
Hi Buzzer:
Scott here, aka Cheeves. True story, but the first time one of my Australian customers called me a bloke years ago, we almost had some fighting words, until I found out that the term is endearing
I've said my piece about Cape Coral so many times, but certainly will point out that although growth has taken place, there is still a good window of opportunity to buy homes under 100k. If you hold for say 5 years, I can almost assure you that you will be in a much better place then today. Why? Well, construction permits are doubling almost every month. Why? Inventory is dwindling. I have said this for 12 months now. CAPE CORAL WILL MEET REPLACEMENT COST VALUES BY THE SECOND QUARTER OF 2015. Buying a house for say $100k has an average replacement cost of $160k. So, in 3 years you gain a modest 20% every year. I might be off a few bucks, but that is my theory and I'm sticking to it. I am an analyst by trade, wholesaler at heart. I'm a numbers freak and if you believe in trends and bell curves, today is favorable. Additionally, Cape is a very safe area to invest in where you will get an annual ROI of about 8%. Show me someone that illustrates double digit ROI in a good area of Cape and I'll call them a liar. It's a safe, second home market rented and bought by a demographic that minimizes risk.
FYI, 12 months ago, I spoke to an investor from Australia. He thought my prices of $75,000 for a duplex in Lehigh Acres was too high. I sold it to another investor a day later. Todays duplex prices are about $90k. Funny thing is this SAME Aussie investor called me 2 months ago thinking of buying. I said the price is $80k for a duplex and he balked again. Probably figured prices would come down eventually. So I sold that duplex 2 weeks later for 88k. Point is, prices are going to continue to rise until sales volume or inventory changes from the direction it is going in. Local income levels favor price increases from the median / average…and the favorability is high. Prices on housing can afford to go up some more and as income levels improve more, so will prices. We are not caught up in the "fake market" we had during the boom. Real jobs are being created…Infrastructure is going crazy here and the Baltimore Orioles are in talks with the city to takeover the former Red Sox Stadium…That would bring 3 baseball teams here. Don't undermine baseball. It brings in a massive amount of revenue for 4 months out of the year which brings loads and loads of tourism.
Unfortunately, I don't know a thing about Jacksonville except the Hooters Restaurant I went to ran out of Coors Light in the keg and I was greatly disappointed. For that reason, never again will I visit Jax
Hope this helps…
Your bloke:
Scott / Cheeves
CheevesFinancial | Cushman & Wakefield - Commercial Property SW FL
http://www.CommercialRealEstateVoice.com
Email Me | Phone MeHi,
This thread seems to have wandered off topic a little by talking about meet ups. Consequently, I have deleted a number of comments.
To keep the integrity of this thread for the original poster I think it's only fair to start a separate thread regarding meet ups, skype conferences, etc. where that conversation can be resumed.
Thanks for your help.
– Moderator
That is fair and we can start a new thread. The chatting did bring on a good idea though, would have been a good read. Can you repost it in the new thread please. There was good ideas for areas we like that, other investors might like to look into also.
Thanks everyone for their replies.
I've been in Jax for a few days now and have been having a look around at a few different areas and properties. We're in a condo at the beach, which is a nice laid back area.
Carrying on from my previous visits, this country just continues to strike me as one of total contradictions: –
There are churches everywhere (and I mean, everywhere – huge, monstrous churches), yet the crime rate is so high and murders are so common. Everyone appears to be so friendly and helpful, yet so many people seem willing to rip other people off. It's the most civilised nation in the world, yet so many people are living in poverty. There are so many new ideas and inventions that come from the US, yet the banks still can't seem to get themsleves into the internet age and seem to want to do all their business face to face with cash and checks. I could go on. It's a very, very interesting place, to say the least!Amazingly, after what has happened over here in the housing market, there are still financial institutions advertising housing loans to low income earners at 3% deposit etc. I even saw an ad yesterday stating that re-financing is possible on "upside down loans" (negative equity) of up to 150%! Very interesting. Meanwhile there are foreclosed homes up for sale all over the place! There aslo seems to be more rental properties available than I thought there would be.
Off to the beach for a walk to try to clear my head! Weather is great.
Buzzer wrote:Thanks everyone for their replies.I've been in Jax for a few days now and have been having a look around at a few different areas and properties. We're in a condo at the beach, which is a nice laid back area.
Carrying on from my previous visits, this country just continues to strike me as one of total contradictions: –
There are churches everywhere (and I mean, everywhere – huge, monstrous churches), yet the crime rate is so high and murders are so common. Everyone appears to be so friendly and helpful, yet so many people seem willing to rip other people off. It's the most civilised nation in the world, yet so many people are living in poverty. There are so many new ideas and inventions that come from the US, yet the banks still can't seem to get themsleves into the internet age and seem to want to do all their business face to face with cash and checks. I could go on. It's a very, very interesting place, to say the least!Amazingly, after what has happened over here in the housing market, there are still financial institutions advertising housing loans to low income earners at 3% deposit etc. I even saw an ad yesterday stating that re-financing is possible on "upside down loans" (negative equity) of up to 150%! Very interesting. Meanwhile there are foreclosed homes up for sale all over the place! There aslo seems to be more rental properties available than I thought there would be.
Off to the beach for a walk to try to clear my head! Weather is great.
What he said:)
The more you get to know the US the more weird it is. It is so familiar, but it isn’t. Buzzer is doing everything correctly. What is scary is people who buy without having the first hand experience Buzzer is getting – you WILL lose money if you do not understand what it is you are dealing with.
PS: I am not in any way Anti-USA.
What amazes me is that people who have never purchased in the United States will fly over and visit a dozen cities in 2 weeks and think that is enough. Good luck with that
Most people who fail to invest successfully do so because they do not do enough due Dilligence
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
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Buzz
Everyone appears to be so friendly and helpful, yet so many people seem willing to rip other people off.….. No need to go to US for this, plenty here in OZ.
For those who have purchased in the US, how is it all going? Has it been worth it? Will you be doing it again?
Have been in the Atlanta market for 12 months, am over the moon with selection of properties to date, am still looking but has been difficult of late to find properties that fit my criteria. With slippage that may occur I am only interested in properties that will provide higher yields to reduce risk.
Property management – early days, however all properties tenanted immediately, I am not too keen on the lease contracts, but these are stock standard in Georgia, good luck to anyone who can change it.
Banks – shocking, they charge fees for everything and backward, plenty on this topic on forum
Insurance companies – l wont deal with them as its a waste of time, just hand ball to property manager, lawyer.
As I mentioned early days for me, another 12 months and I will let you know how things are panning out.
Cheers
WIThere are ripoff artists around the world, not just OZ or the US. Frankly speaking, Buzzer's comments about the US and banking system is right and wrong. Low down payment mortgages are for FHA mortgages. Here are qualifications for FHA financing which also have strict loan amount limits:
- Two Years of steady employment, preferably with same employer.
- Last two years Income should be the same or increasing.
- Credit report should typically have less than two thirty day lates in last two years with a minimum credit score of 620 or higher or in some cases no credit score at all.
- Bankruptcy's must be at least two years old, with perfect credit since discharge.
- Foreclosure's must be at least three years old, with perfect credit since.
- Your new mortgage payment should be approximately 30% of your gross (before taxes) income.
That is hardly a subprime loan. FHA qualifications are harder to achieve then they were in the past but it is available. The banks have to get money moving so those fresh out of college by a couple years with steady income who don't have mommy and daddy to pay 20% down can now buy a home as long as they know what goes along with FHA. Ok, enough with that.
Churches and Crime rate? Places of worship are everywhere in the U.S as we acknowledge all religions. As far as crime rate, this should have been noticed in your due diligence. Duval County / Jacksonville has the highest crime rate in all of Florida and ranks as one of the worst in the country. Crime rate is actually down in Jax from years past but is still an area with abnormally high rate of crime.
Yes, in Jax you will see bums and poverty, moreso then anywhere in SW Florida. If I see 5 panhandlers a week in our area that is a lot and I don't think its that many. Bums and panhandlers are everywhere, most prevalent in Los Angeles and NYC, two of the most economically successful cities in the world. What is poverty? 20% below the median household income? More? Point is, poverty is everywhere on some sort of scale.
WORLDINVESTOR: Insurance Companies: Are you referring to Title Insurance companies? Are you saying to hand the ball to property manager and attorney instead? LOL. On the contrary, title companies in FL are your friend. Or you can have an attorneys office do everything for you. One or the other…but trusting your property manager with legal things on your investment is what I was LOL'ing at.
Also, why are you opposed to leases? Once someone occupies your home, legally they have rights too unfortunately. I find that leases go in the landlords favor big time.
NIGEL: I agree 100% with you. Fortunately a lot of investors I met stay in one marketplace and do weeks of research. Others fly all over the place after spending a day or two in each area. Clearly that is a mistake.
Face it, foreign nationals don't have a lot of trust in the U.S or the agents who service the real estate industry. That's ok. My favorite line to use is "Give me 1% of your trust and I'll earn the rest". If you are going to invest dollars in our country, don't you think it would be wise to find a friend or someone trustworthy? Might take a leap of faith, but hey…it's investing.
CheevesFinancial | Cushman & Wakefield - Commercial Property SW FL
http://www.CommercialRealEstateVoice.com
Email Me | Phone MeCheeves, LOL, not talking title insurance, property/landlord insurance, purely payments/systems that do not work….. that's another story, hence my comment.
I do not like the lease contracts in Georgia it favours property management companies, you all need to adopt our contracts in Australia.
PM companies want to squeeze every ounce of blood and then some more. I imagine most will not read these contracts, but they should. I think many will be shocked at what they can get away with.
Cheers
WIWI:
Thanks for the clarification. Candidly, I am not a fan of property managers either. I'd love to see a sample managment contract that you are referring to from OZ. Yes, in most cases here, management companies have too much authority. My PM is great, but maybe I am bias because he leases space in my office and he knows I am watching That said he runs a good system. Maybe I can show him what you are referring to and I can try and mold him a bit if it is a win-win.CheevesFinancial | Cushman & Wakefield - Commercial Property SW FL
http://www.CommercialRealEstateVoice.com
Email Me | Phone MeHi All,
I just thought I'd give a quick update on what I've been up to. I arrived back from Florida just over 3 months ago and have been trying to find the time to write this update, but haven't managed to find time until now!
I spent about 4 weeks in Florida, most of the time in Jacksonville. A little time in Gaynesville, Miami, Captiva Island and of course Orlando (to keep the kids happy). Unfortunately i didn't get to spend time in Cape Coral / Fort Myers where I was hoping to have a look around and meet Cheeves. Maybe next time?
Anyway, after almost going crazy trying to work out what was the best thing for me to do – what type of property to buy, where to buy, even – should I buy? I decided that I had to take the plunge, otherwise I'd be back in Melbourne and the whole project would just end up in the "too hard" basket, like it did 6 years ago after my trip to Texas.
We eventually bought a property in a lower priced area of Jacksonville – not a war zone, but certainly not the best part of town. It seems to be a lower working class type area. It's on the north western part of town. We came across a bloke who was looking to sell one of his properties, so decided to buy it from him. It's a 2 bedroom weatherboard, built about 1950 I think, that was recently re-habbed. We paid $34,900 for it and has a tenant in there paying $650 per month, so just over 22% gross return. We had a plumbers bill in the first month for $60 for a blocked drain, which seems to be a common problem in the US for older houses – apparently the old drains are smaller than they need to be and are built from some cement fibre type material that is prone to tree roots growing into them. We've been told to update the drain would be about $500, so that's an option if it keeps causing problems. So, at the moment everything seems to be going along okay.
We tried to open a bank account over there and were unable to do it. I'm not sure how other people have done it because we were told by two banks that we needed social security numbers, or evidence of a permanent address in the US, or a work visa, or something similar. So we are now having our property manager pay the rent into our Paypal account, then transferring that to our bank account. It seems to work well. I don't know if there is a better way of doing it, but that's what we've got at the moment.
We bought the property in a Land Trust, which seemed like a much easier and cheaper option than an LLC and seems to offer some asset protection as well. But I think an LLC would be good, then it could be linked to our Australian Family Trust and then the income (and future capital gain, if any) could be offset against other properties in the Trust. Anyway, that all needs looking into a bit more in the future. I'm still not sure how to go about doing all that or what costs are involved.
So, that's about it for the moment. Any comments, help, criticisms are most welcome. A sincere thanks to you all for your earlier replies to my posts and for showing an interest in what I was doing and for the advice that was given.
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