Hello All,
Perhaps previous topic may already have been posted but what the heck have a go and ready it and give me your opinion.
I’ve already purchased three rental properties in Atlanta Georgia…. using the Law of Attraction, I’ve aligned myself with like minded investors who done quite well investing in the US, use their approach so got the same result so the experience so far is nothing but great. Plus, I regularly communicate with my PM via phone to get some update etc.
We already have three rental properties in Atlanta GA. The two other properties were purchased through my Super (equivalent to 401K in the US). The 3rd one was purchased through personal saving and some loans.
We are planing to get personal loans from a bank buy our fourth property (now I understand the notion behind being “creative” from Robert Kiyosaki’s book Rich & Dad, Poor Dad).
Loan amount $60K
Interest 13% (ouch)
Term: 5 yearsAlthough we have a good credit rating (i.e., only mortgage and car loan…no credit cards), we are considering to get two personal loans (e.g., two 30K personal loans because my finance broker’s advised was, Banks can easily loan personal loan to 30K but extremely rare to get an approval with 60K). we are both working full time so income is available regularly.
One advantage on my side is the third property can provide support on the personal loans. Further, other advantage is I have people (e.g., attorney, builders, my PM who is license broker also, insurance broker etc) in Atlanta GA that can help me once finance is secured here in Australia .
NOTE: This forum is double edge word (i.e., positive voices vs. negative ones)…i’m well aware of some of the comments will be posed but it is better to study both side of the story, make calculated decision then press ahead despite all the ODDS provided my plan is well thoughtafter and recognise the risks (e.g., high interest rate on the loan). If the loans are successful, the ROI for the fourth property will be negative cashflow because the interest payable here is greater than the rental income. So what’s the point of acquiring the fourth property then? Given in five years, we will repay the loan in full or even shorter, the property will continue to generate cashflow looooong after the personal loans were paid.
If you have done this before, or you’ve thought about but unsuccessful implementing your plan etc., you are welcome to comments.
DHCP
“Success is something you attract by the person you become” ~ Jim Rohn ~
Hi DHCP
I am confused, do you have 5 properties in Atlanta in total and of these 2 are in your SMSF, total cost $401K?Cheers, WI
WI i think you will find DHCP is referring to his Superannuation which in the US of A is know as your 401 K taken from the relevant section of the Inland Revenue Code.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I am definitely trying to obtain finance to purchase over in the US. Already have one property paid for in savings, but would prefer to be able to use leverage and use a loan.
Unfortunately I have found it is almost impossible to obtain traditional finance in the US, as I am sure you are well of. Personal loans are definitely an option, but the high interest rates and definitely a turn off. Your monthly repayments will be in the order of $1,365 a month? I guess if you look at it that way, your total expense will only be $81,900 or so, so not too bad really.
Have you looked at hard money lenders? They seem to be fairly popular in the US for people who cannot obtain finance through the banks for a variety of reasons, typically due to poor credit. Obviously the rate they charge is higher than the banks, but keep in mind the rate in the US is only 5% or whatever, so they may only charge 9% or something for your loan. Not too sure how difficult it is to negotiate a deal being from Australia though.
Another alternative is this mob – http://loansusa.com.au/ – I have not used them myself, they did approach me about using their service, but then the communication seemed to break down and has not gone anywhere. That being said we are not looking for a loan in the near future. But they seem to specialise in providing finance for Australians to purchase property in the US. Looking at their examples they seem to be able to provide finance at around 9% or so, so less than your personal loan. I am not sure if they have a minimum deposit required, or minimum loan amount, but it might be an option?
Let me know how everything goes, I am curious for my own investments.
Regards
If you can pay off in five years, sounds pretty solid to me. I like to play a game to see how fast i can get my beginning cap back and five years is always nice. Is there no option to pull equity out of your other houses?
DHCP
For the purposes of clarification (see WI's comments above) it seems you have 2 homes in Atlanta owned by your SMSF and 1 in Atlanta presently owned by yourself so a total of 3….. right ??
I guess you will get all the usual comments about being a risky strategy to borrow that amount of money to buy a home in the US and nobody knows your financial situation to give a fair comment. Seems though that you have some common sense about you and have run the numbers. Does the combined "net" rent that you will get from property 3 & 4 cover the monthly loan repayments in the first 5 years. You probably wouldn't transfer funds each month back to OZ as it would prove expensive but if you HAD to does it cover it ?
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