- gazmatazz wrote:. My two properties are both in Mackay
good buy, I think mackay, like Gladstone, will prove to be a bit of a gold mine in coming years (barring a major crash). When did you get in there, and did you manage to get them positively geared (if you don't mind my asking)?
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
Wi,
I quote 55 a foot because that is what any builder who is in the business of building the same quality homes as you and I are buying are paying to build them.. My partner in Atlanta is building now.. I build in Oregon.. for these vinyl sided 7 foot ceilings formica counter tops cheap cabinets and basically as cheap as you can buy fixtures doors etc. thats what it cost us to build.
Lots are 1 to maybe 10k per… In Atlanta metro and there are thousands of vacant ones. I have posted before the 1/2 acre estate lots I bought last fall for 3500 each,, and there is ( even in todays market neighboring homes) that are 275k plus and you know how nice a home that is in Atlanta Metro.
There is not going to be any huge inflation in material cost or labour anytime. soon.
Now if your building one home at a time your cost will be significantly higher,, However you and I are going to compete with new home builders and thats what they pay to build.
I would be happy to share a couple of spec sheets with the audience if you like.
SAturday,
There can certainly be liabilities on title at foreclosure sales.. and that is were the wheat is cut from the chaff.. Amateurs get stuck with the lemons those that have been in the bizz know how to research title ahead of the auction.
yes you get hold over tenants and you have to deal with them
And for sure you can get trashed units.. Foreclosure buying is highly risky but can be highly rewarding as well.
YOur right on the mark with your comments.
Karina,
so if I understand you right your negotiating a sale between a seller ( in this case a bank) and buyer and your charging a facilitation fee.
Are you a licensed Real Estate broker in GA… How do you do this legally if your not , just curious really.
MGCdavis
WI is correct on these very cheap apartments… These are only suitable for investors that do this for a living and work and live in the community.. these are all low end be it black white hispanic,, this is the lowest common denomenator in tenant pool i the US… Extremely hard to manage and turn over is a given…Neighborhoods are ghetto war zone type.
by and large…
tread with extreme caution with these types of property.
jayhinrichs wrote:Karina,so if I understand you right your negotiating a sale between a seller ( in this case a bank) and buyer and your charging a facilitation fee.
Are you a licensed Real Estate broker in GA… How do you do this legally if your not , just curious really.
Jay,
I guess you are asking me how are we negotiating the purchase and sale of the property and earning a real estate commission as you need to be a licensed realtor to earn a commission.
In answer to your question I am not a licensed real estate broker and I do not earn a real estate commission on the transaction.
We have a relationship with a licensed realtor in GA that is actively negotiating on OUR behalf so there is a licensed realtor involved in the transaction who earns a real estate commission. They have a brokerage license.
Our fee is one of a facilitation/consulting fee for our services, we analyse the property, determine whether we consider the property to be a good investment, the potential rental market, assist in identifying renovation costs and provide a network of support to facilitate the end to end purchase including property management. I was an investor in the US market before I set up Select American Homes and have transferred the skills that I have learnt through the ownership of my own properties to help others do the same.
What’s different about us is that we don't add a margin to the price of the property and are transparent with our fee structure. Our clients know exactly what we charge and I have no issue in disclosing our fee is at this time $5000 per transaction. This means that if we secure a home for 60k, our clients pays 60k + our facilitation fee. We don't charge upfront fees or membership fees, fees for tours or to view properties. We only get paid if a client uses our services. There are no hidden fees or kickbacks to us from the vendors we engage. We engage vendors to assist with the renovations and property management as we understand international investors need more assistance than just buying a property they need to have a complete network that will look after their longterm interests and make the property a profitable venture. We have a good relationship with vendors that assist with all aspect of the transaction. Its a win win situation for our vendors and our clients. Our vendors get constant new business coming in and our clients get access to vendors that value our business and understand that they need to perform to a standard we expect of them.
I have tried to structure my business model as one to help investors get into the market at a “wholesale” price and take advantage of the great opportunities available in the foreclosure market without having to pay a retail “rent ready”price.
Apart from running Select American Homes I am an investor also and have been investing in Australia and the US for many years so I write the following with my investor hat on and not to judge anyone else’s business model.
The retail “rent ready” product does not appeal to me as an investor. Why because I am not getting the property at the best price I can. It doesn’t make sense to me as an investor to pay someone 71k for a property they just closed on for 27k just because they organised and paid for a renovation and have a tenant already paying rent.
As an investor I would prefer to do the hard work myself, find the property, co-ordinate the renovation and find the right contacts to property manage and lease the property as I will be able to get a much better quality product for the 71k invested. It will get me a much better house in a much better neighbourhood to do the hard work myself.
Firstly my property will actually be worth 71k as the surrounding values will support this. I don’t have confidence that if I buy a house from a wholesaler at 71k that they paid 27k for that if I need to sell the home the property will be worth 71k and I will be able to get my money back.
As an investor I am prepared and understand the risk of doing it all myself. (vacancy, additional rehab costs, potential risk of vandalism etc) I manage that risk by buying the best properties I can and not buying the low end of the market and I understand that for a few months the property wont deliver any income to me. Ironically people buy “rent ready” property with huge undisclosed mark ups because they feel its less risky to buy something with a tenant in place, its more convenient, its easier. The risk in my opinion of doing it this way is much higher as investors are buying an inferior product than if they spend the same money and buy at the foreclosure price. People are paying 10's of thousands of dollars more than they need to with some firms.
Like I said I am not here to judge anyone’s business model. It is up to the purchaser to select the business model that best suits their requirements. I highlight this particular example as it was an example that was recently posted on this forum being marketed to Australians.
I have received a lot of criticism from competitors, family members of competitors and in some instances I suspect competitors “reincarnated under new identities” to highlight their views on this forum and make a point that I am not a licensed real estate agent when in fact there is no reason that I need to be to offer the service that I do. I guess competition is not always welcome.
What I can say is that I can sleep at night knowing I do the best I can for each and every one of my clients, I am upfront with what we do and am fully transparent on how we get paid. I always have my clients best interests at heart.
We source some beautiful homes for our clients which I am very proud of. There are still some great deals out there.
This is a property we sourced recently in the under 90k range that one of our clients is moving forward with. Just an example of what is out there in this price range even in this very competitive market.
Video Footage
http://www.youtube.com/watch?v=_-7qj_-ofR8&feature=youtu.be
Photos
http://s1178.photobucket.com/albums/x374/selectamericanhomes/Glenleigh%20Way/?albumview=slideshow
Karina Perez Ronderos
Phone +61 412 900 111
Sah,
Sounds better than those getting totally screwed by spuiekers.
My only comment is that if for some reason someone makes a complaint to the RE commission your going to have an issue.
I had many turn key guys that were clients of mine that I made loans to their customers over the years who did the exact same thing as you ( claim they were not RE agents) recieve Cease and Desist letters and fines from the states they were working in.
Now if you buy these properties your self and then on sell them thats totally legal.
JLH
Jay,
When we decided to set up our business we had input from a US attorney of how we should structure ourselves to operate within what is allowable by law. We followed that advise and operate within those rules.
Would love to hear more about your product and how you get paid. I believe you work on an upfront fee and some equity share arrangement on the capital growth is that correct? Sounds interesting if thats the case, would like to know more.
Karina Perez Ronderos
+61412900111
Karina,
Just because a US attorney bless 's you does not mean it would stand up to the RE commission.. You may have an action against the attorney for E and O.. But if the state thinks your selling real estate without a license it does not matter what your attorney said.
Many attorneys lose cases when the RE commission or the State attorney general decides to look into a certain business practice.. Be that as it may, as I stated its better than the alternative which is the out and out crooks that I have seen totally abuse their poor Ozzie and GB buyers and cause them untold financial hardship stress etc.
Everyone has a different threshold of financial loss… One mortgage broker I knew in SF lost 50k on deal it was his clients money. the client was distraught walked in to his office shot and killed him on the spot.
Another very sad story happened to me personally, I bought a foreclosure in Oregon,, I went over to serve the eviction papers the hold over owner would not leave.. We had to have the sheriff show up to evict him.
Sheriff knocks on the door it just opens.. There on the front table is a letter the guys wallet etc. We are standing in the doorway me and one of my Female RE agents… Sheriff turns to us and says get back in your car. He knew what was going on.
In the back yard there was the poor guy he had committed suicide over losing the house. Took me a long time to get over that one. To think you could buy a foreclosure and it ended up with someone taking their life.
Usually the people that lose the homes take it out on the home IE vandalism etc etc.. And I had a few other Attempted Suicides. Wife never told the hubby they lost the house I show up and they are just shocked that they no longer own the home and the wife hid it from them..These are usually gambling drug or alcohol related.
There is more to this whole foreclosure mess we find ourselves in… And humanity is humanity. You throw in all the trama of losing a home then all the crooks that come in and take advantage of the investors.. it can be a crappy business from that stand point.
But here we are buying 10 plus of these each month.. What I like now though is that most of these 95% are vacant in the earlier years of my foreclosure buying days. 90 through 2006.. You had far more holdover tenants. Now a days it takes the banks years to actually foreclose the owner has lived for 2 to 4 years for free and I think that softens the blow.
As for TWH anyone is free to go to our website it clearly defines what we do… We own the asset bring the investor in as the bank.. Investor gets paid a NET return and we split equity.. pretty simple really and the least risky by far of the turn key models. Once any turn key operator sells a house its off his plate and on to the next persons.. If the house has an issue its on the new owner just like if we have an issue its on TWH not the investor they are the bank.. Its far better to be the bank than to borrow from them… WE like it.. Can't keep up with demand.. And majority of our business is referral at this point or clients coming back for more.. My clients are more cash flow orientated and really do not want to own rentals per se.. Most of them have rentals or do but do not want to deal with the 3 TTTs anymore or have to go back and forth with the PM… They just like getting their check from us every month on the 15th and never worrying… About any of the ownership issues. At the end of the day I am dead certain that our program will return more Net profit to the average rental property owner than the DIY especially anyone who is out of area be it country or across the US Just the travel cost to come and look at your properites unless you own 10 or so will chew up half a years cash flow… Majority of my investors are CA OR WA and TX.
WE have had exactly 2 Investors view their properties in person. 1 before they bought and Penny from Lodi California just went and looked at the 2 she has with us in Atlanta 2 in Birmingham and1 in Jackson. And since our PM is our partner and a co owner of the asset she gets to look at the home with a fellow owner not just a for hire PM.
Ok my B day today off and running.. My wife is selling a house today I am going to go as wing man.. I go do that every couple months.. our market is red hot here in Portland for first time buyers and move up.. We have little to no sales to investors. Investors rarely buy sfr's they only buy multi. She sold a 4 plex last month that need a ton of work for 320k its gross rents were 2400 a month. and the buyers one a realtor the other a contractor were tickled they got such a good deal.
But here in Oregon you have 99% occupancy and Pm is much more like what your used to in OZ people pay on time with auto drafts and leave the houses or apartments pretty decent. I would say half of the tenants in the Southeast would never qualify to rent anything here in Oregon,, Not good enough credit scores.
JLH
Jay,
You are making some assumptions about our business model which are incorrect.
Your business model is interesting. One question for you, how do you determine the price of the note? If for example you source a property at 40k, spend 8k on rehab and 2k in closing costs, do you sell the note for 50k or do you make a margin upfront as well as keeping an equity share of the growth? I can see your business model would appeal to those that want a guaranteed rate of return.
Karina,
No assumptions of your business model… Your simply have a website were you advertise properties that can be bought and you take a fee… pretty much clear cut Real estate agent buyer relationship,, however at the end of the day sounds like you have satisfied customers and thats what its all about,, especially when you see the absolute out and out fraud and deceit your fellow countrymen perpetrated on you their clients
On the TWH Model we have an all in figure price to buy and rehab, then we have some run the railroad dollars in there its between nothing( IE we really like the house and are banking on equity) to maybe 6k or a little better occasionally.
Investor splits equity,, we Pay ALL running cost.. at the end of the day and we will have to see when the end of the day comes to pass,, I think our model will out perform most DIY just because we are far better at managing houses than any individual can be.. And we pay NO letting FEE ever NO monthly management fee EVER, and no mark up for repairs.
At this point we really can't service any Aussie clients as our inventory sells in a matter of hours and they are all US IRA investors that can just cut checks. And there is no learning experience.
I stay on this site primarily as a service to the new blood coming in.. And hopefully give some good info on markets and how to buy. So at this point you can consider me a observer and I have no product to sell.. I made one sale to the group of Perth Doctors then my sales went ballistic here stateside and I cannot keep up with domestic demand. this could change but it is what it is.
I do apologize to all that have contacted me and wanted to invest in TWH we just cannot handle foreign investors at this point.
I will remain an advocate for the buyer as always and try to help were I can… My main focus now is on our quick turn foreclosure fund.. I have started that with an Aussie and we can accept new Aussie clients in that fund and you would have a fellow Aussie to speak with if interested. We are knockem dead with that fund. Very short term and better than bank rates will little to no exposure.
JLH
That fund come with a fixed rate of return, Jay?
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
Hi All,
Thanks again for your comments on my first foray into the US market. Being close to close on my first deal, facilitated by an agent, I'm planning to do the next one more directly.
Can anyone recommend a US buyers agent, preferably based in the Atlanta or Florida areas? I'm not particularly looking for help with the rehab or property management – I already have someone in mind for that in Atlanta.
Thanks again
Mike.
While I personally think the SFR phase is a case of "NEXT" (…..Jay's model would be HIGHLY tempting at this point…) and getting excited at that, these are my thoughts….
IF YOU MUST INVEST IN ATL….. FIND A CERTIFIED FOREIGN INVESTOR SPECIALIST (LICENSED)… (or again, use someone like Jay)…..REMEMBER – THE SELLER PAYS COMMISSION HERE………. so, NO 4.5k mark up…. find one with rehab connections or buy a property that doesn't need rehab and be specific.
They are someone who has this knowledge ( I get bombarded with the spam for the course – this was from just ONE operation):
QUOTE
Expand your business globally with this dynamic course. Working with the International Investor.
Over 200 agents have completed this course in Georgia and it is being requested in multiple states for the near future!
- Playing The Small Market Game.
- Five Moves to increase your odds for Success
- Leverage your success globaly.
- How Foreign Investors Can Buy Real Estate in the USA.
- The EB-5 Visa Program
- What is FIRPTA (Foreign Investment in Real Property Tax Act).
- Understanding the Tax Ramifications of Real Estate Investment
Upon completion of this course, students will take an online examination and will receive a completion certification as well as usage of the CFIS Logos for marketing purposes.UNQUOTE
Honestly, the day of using an unlicensed "facilitator" as a foreigner to purchase US property are over….most properties (ignoring short sales for now) are regular sales or flips. There are thousands of US licensed real estate experts in foreign national sales – CALL YOUR local branch of the National Association of Realtors and ask for their list or just google. As a licensee I am constantly being bombarded with offers for their "sold out courses"….
ATL… seriously????? Now????
Seriously, I am not actively looking at SFR ATL – it makes practically ZERO investing sense unless something LEAPS and as Jay said, it is a huge win to sneak one in but I bet you your spruiker won't be giving you that one – they would be holding if they have the $$………. ATL will be a second home for another 4 years for myself and overseeing our investment group but seriously???? This is a tough market, tough environment for properties and at 90k (on a property that last year was $40k-60k??) especially without having seen a rental increase?? ATL would be one of the the last places I would invest in (ha, it WAS the last SFR market I looked at…and needed to be 10-15k under any other market and at least $125/month higher rents to justify moving here….. investors are like locusts, when they picked dry their preferred market, everyone came to ATL…)…. first picks widget for widget?? Investor friendly states……. .pick ANY desert environment, any NON state income tax environment and ANY city that you aren't going to get raped on fuel surcharges for repairs etc…. if it changes, the locusts will come back.
The bulk of properties under 90k in ATL are shortsales or dire location etc and the exception proves the rule….Again, the day of having to use a facilitator based in Oz who is unlicensed, has never seen your property, doesn't directly do or oversee repairs and is motivated by greed and bulk sales is gone. Short Sales: If you have the earnest money to tie up in a short sale, 8 months to twiddle your thumbs and accept that you will end up paying 30-50% over list price… go for it…
The big boys are outbidding, outlasting and licensed… with billions of dollars and only needing a yield of 6% (see below)…. if you are paying a facilitator on TOP of all the usual fees – AND a property manager to rent the place, AND hyped contracting fees???
SOOOOO….
Call any agent in the area you are looking to invest in. 90% of the sales on the open market are no longer foreclosures they are short sales (add 40% to the list price and you MAY end up, 8 months down the line with one) or flips/regular sales – unless you are buying auction steps.
Using an above type buyers agent, you can find a flipped or regular house near schools, shops and transport, have an inspection/engineers report and ask the seller to fix any items that come up – just like any property purchase… ask for new appliances, a home warranty to be thrown in etc… if you are cash, you are king over a financed deal…..they WILL throw in the kitchen sink….
Then call any of the 1000 property managers in this state (YOU MUST BE A LICENSED AGENT TO DO PROPERTY MANAGEMENT)… sadly why the unlicensed "facilitators" on this forum can't do it inhouse and you get whacked with extra $$ on that – because they can't rent legally…most are very very overworked and underpaid so take control as WI mentioned on a post somewhere.
TRADES & REPAIRS… where 99% of people will get hyperinflated quotes..
Someone asked paint and a/c I think…..If you are in ATL you are happy to get a second quote on repairs from my guys… don't abuse it with a million free estimates but they deserve the business… tell them you know me (Emma with SelectUSAProperty LLC)……
William Virgil of Stellar Home Painting will paint a 2 storey house up to 2100 sq ft for $1600 in 2 tone paint (including garage etc)…Ph. 770-910-4664 – he will take no more than 3.5 days to complete (I padded by an extra 1/2 day)
Gary Freeman of Freeman Heating and Air is a great solid guy – a/c cages are $275 Ph. 404-384-8125
Ironically it is often cheaper to go with Lowe's for carpet install and purchase as once you have multiple stairs you get a bit screwed…. so $97 whole house install – however going rate is inching up – about $2.25 – $3.00 a yard for install of tile/vinyl/carpet etc….
BUY YOUR MATERIALS ONLINE AT http://WWW.HOMEDEPOT.COM or http://WWW.LOWES.COM – that way if you need a new toilet, it can be waiting at pickup and NOT be ripped off on the purchase! They may need supply lines but seriously, the $88 in ATL all in one toilet or the $69 all in one in Vegas means you know DARN well they shouldn't charge you $200 for install!
FOR EVERYTHING ELSE THERE IS REDBEACON – owned by Home Depot
EVERY TRADE UNDER THE SUN IN YOUR AREA LICENSED AND BONDED AND YOU CAN GET 4 COMPETITIVE QUOTES… be very very specific, say you don't pay for esimates but seriously GOOGLE THIS..
Ask for before and after photos always… and have your property manager give a once over before paying… you may have to pay them an extra $$ for doing this so check in advance.
Did everyone read this…??
Bloomberg News,
Peter Horbulewicz started noticing investors from New York and California at Atlanta-area foreclosure auctions about four months ago. Working for private equity firms such as Colony Capital LLC and Blackstone Group LP (BX), they’d clutch plastic folders crammed with cashiers’ checks and astonish locals with how much they were willing to pay.
“If you go head to head with them, they always win, because they always overbid,” Horbulewicz, a Polish immigrant turned American house flipper, said during a foreclosure auction outside the Gwinnett County courthouse, northeast of Atlanta. <moderator: sorry, article was too long to paste in its entirety. Please see link
SelectUSAProperty LLC
Blackstone have been crowding the Asian market as well (http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20121031000006&cid=1102)…they, like most big funds etc, move in just after the market starts picking up again.
been feeling them in Japan too, but they fire up the market, and stay away from the "diamonds in the rough" types that we go for. They prefer safer, go for potential over cashflow, and don't mind compromising on yields. Don't really bother us, personally.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
For what it is worth, I have invested, and am still investing in residential property in Atlanta, with continued success.
My main response to the opening post is that you cannot buy on price per square foot alone. You need to drive the streets – Atlanta's housing can vary remarkably within 400 meters and the house that you see for $45,000 can look the same as the house you see for $24,000 only three streets away.
In Australia you'd buy the cheaper house – but in Atlanta you're likely to be replacing copper piping, HVAC, and all appliances unless you have it tenanted immediately.
Atlanta is a cash flow / currency play though – don't expect massive capital growth from your investment here.
I think that's the main reason most of us venture overseas, for the high cashflow that's sometimes harder to get locally (and of course the much welcomed but slightly volatile currency fluctuations). If you want to buy safe and (potentially) growth oriented you can buy in the heart of Sydney, Tokyo or Manhattan, not much of a difference really, is there?
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
been feeling them in Japan too, but they fire up the market, and stay away from the "diamonds in the rough" types that we go for. They prefer safer, go for potential over cashflow, and don't mind compromising on yields. Don't really bother us, personally.
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