if you had $300,000 cash…how would you invest it in USA property? what strategy would you use?
Depends what you want to achieve
Funny, I asked the same question a few months back, trying to get an equivalent portfolio suggestion from anyone in the USA…never heard back. Are you after cashflow or growth, handson, remote? What are your primary directives here?
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
Invest in 2 Class 'B' properties, make about 6-8% yield in an area with good upside potential. Safest thing going right now. The Class 'C' market has been struggling if you can find honest property managers that can post their 12 month ACTUAL yields instead of their double digit yields on paper. Over the last month, I have analyzed a C property in Florida, Georgia and Arizona. The one in Florida, I sold with an estimated yield on pro forma of 12.5% and then stated a "best guess" yield at 10%. The property yielded 8.7%, and I was personally involved in this, met the tenants, background checks, etc.
The property in Georgia had a pro forma yield of 16% that actually yielded 4.6%. The property in Arizona had a pro forma yield of 12% and it yielded less then 3% (maintenance issues and 3 turnovers in 1 year!).
Class B is where its at.
CheevesFinancial | Cushman & Wakefield - Commercial Property SW FL
http://www.CommercialRealEstateVoice.com
Email Me | Phone MeHi Cheeves
With regards to Atlanta – 3 turnovers in a year, that would absolutely be a killer.
I am curious, how would you describe a 2 class B property?
Those 6-8% yields I believe are just not attractive for foreign investors, coz we can not LEVERAGE in Australia and our interest rates are now very attractive, if you look hard enough there are properties in Australia that provide 7.5% yields and much lower risk.
I personally think the boat has sailed and the stock that I am seeing now is way too expensive or inferior.
WI
Thats an easy one… My new short term foreclosure fund
WI,
I think what your seeing is the stock move back to more of historic norms.. Properties just could not stay that low that long.
And of course we have talked in depth about the very large money players moving into certain markets were 6% yield is fine for them as they are counting on CG to bring their yields into the low teens.
The attraction to the US is simply such a low entry point to play… this also leads to very risky investing behavior. Which is well documented on the site here.
We need to realize up until 07 08.. If a property was neutral geared here in the states or slight negative with 20% cash down investors were flocking to them.
I was making loans in Atlanta in 06 and 07 at 75 to 90k WHOLESALE REhab added to it.. Who was to know or guess that that area and properties would devalue by 75%… Rents have stayed static basically for all these years as well.
So thats were your seeing the prices creep up as the US investor jumps back in with both feet and is trying to get better than the .05% they get in the bank..
JLH
As a relatively passive investor, I wouldn’t put more than 10% of my portfolio in the US. Id look for a couple more US houses then I could check out a few of Zivs Japanese apartments at greater than 10% yield if I had faith in the yen.
It would be a nice to have foreign currency earnings if the A$ falls.
Jay has a point about directing passive investors to high yield US funds instead. Only then you still have management risk and fees to consider.
Agree, that's what diversity is all about. Ups and downs of one currency spells opportunity for someone who's got more than one, not disaster. Yen goes up, money comes home, yen goes down, buy more property.
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
leverage! thats the big 1
if you had $300,000 cash…how would you invest it in USA property? what strategy would you use?
I would set back 100,000 for flipping. Proceed to buy properties with that liquid and average a quick wholesale deals.
Would then buy A class for about 50,000 in the new Google fiber hoods (That's what there calling them, trying to be very urban) Rents thousand plus each month, kill two months for insurance and taxes. Would really just like to sell them for 100,000 each to first time home buyer. Would it be to gready to sell them for 200,000 to a nice guy from Cali that is used to San Fran bay area real estate. I don't
Nice strategy.
give me 2-3 more months and I'll let you know what we got for $300k in Japan. Looking forward to this 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
go to vegas play black jack ? 150k and drink and enjoy vegas for a few weeks other $150k not sure ..LOL
Love these post the problem is
Zig
For example when some one comes to us as a client. We need to know short term or long term goals are . Then we see what they are trying to accomplish . Cash does not mean anything with out a plan of attack for the client and the person building a portfolio.
Just my two cents
Alex
Completely agree, Alex, when I say "I'll tell you what can be gotten" I'm referring to my own personal criteria and goals. Sorry, should have added that.
having said that, the area, budget, country etc sometimes dictate what sort of strategies can or can't be applied. If someone approaches me and asks for my help establishing a capital growth based portfolio in Japan, I'd probably refer them to your blackjack table too, we're a purely (high) cash flow environment until further notice. Similarly, if someone asks my opinion on how to establish a zero management, remote controlled, hassle free portfolio, I probably won't send them to flip houses or buy and renovate a SFR by themselves in the US, etc.
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
You could buy an apartment complex. If you buy commercial property you will have your $300,000 and can then use that as a deposit to borrow around 60% of the value of the property. In other words you can buy a property around $800,000
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
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Bet it all on the black! I always do
kylermrice wrote:Bet it all on the black! I always doDepends upon which state you're in
Nigel, are whole blocks higher cash flow than diverse, sparse properties, with the owner taking on building maintenance costs factored in?
if it's anything like what we found in Japan, I'd say the only value in owning the entire building would be redevelopment/rebuild and renovation potential, but I'm wondering if its any different in the US or Australia?
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
Nigel I am jumping in with both feet for commercial deals near me in Charlotte.
WI is correct most people here commercial is not for them. I think after buying and selling houses for years commercial is the way to go.
We are working on large unfinished developments. Slowly looking at setting up to build when time is right.
talk soon
Alex
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