- Freckle wrote:engelorumora wrote:
Your up early lol
Not if you're in NZ…
What you doing in NZ?
Too many sheep there lollol
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Nigel Kibel wrote:Generally the best asset class is either apartments or hotels however they will also look at retail depending on the quality of the Tennant.In terms of occupancy we generally look at properties that are fully let or just under unless it is a renovation opportunity.
Ok cool,
Thanks
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engelorumora wrote:What you doing in NZ?
After 15 years in Oz we missed the green stuff, mountains (real ones) , white stuff and recreational opportunities far more varied than Oz has to offer.
Quote:Too many sheep there lollolYou have more. Ours are better looking.
hahahahahahhaaha
Love it mate
You should come and visit the US.
I would be happy to show you around my country hehe
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engelorumora wrote:You should come and visit the US.Bit like going to Canterbury Bankstown when the Bulldogs are playing
Freckle wrote:engelorumora wrote:WOW,There might be some good buying opportunities again if the bottom falls out from all of these funds.
Thanks.
Not in the US and maybe for a long time. The next GFC event will almost certainly hasten a change in the reserve currency from the US$ to a basket of currencies (incl the US$). That creates a huge problems for the US currency.
The US currency is seen as a commodity to facility global trade. The US can run deficits into the global system to supply the US$'s countries need to trade effectively. If the US$ is not needed then the trillions of US$ in the system become surplus and essentially worthless. You might get 10 cents on the dollar until the system rebalances … I'm not sure how it's going to work out but it certainly won't be good. Anybody holding US$ or assets in US$ will have a bad day.
If the US$comes under threat in this way then interest rates are likely to rise substantially (think mid 80's @ 22%) to mop up excess US$ liquidity.
Currently inflation is being misreported by the US government because if the true rate were published (in excess of 10%) then interest rates would have to rise substantially to contain inflation. There's no way they raise rates without going belly up.
It is very difficult to envisage any way in which a transition from US$ reserve status to a basket of currencies will play out. I can't see any way in which it will be good for investors. The upside is that the US economy would become more competitive by a significant margin. You might even see the US and China sort of change positions. China becomes a consumer and the US a manufacturer. God knows US manufacturing quality is streets ahead of the Chinese.
Interesting times ahead.
Nigel, Engelo or anyone in the US market….
I think Freckle has bought up some really relevant issues that on a thread dedicated to US property may have substantial consequences…..
Would anyone like to provide any argument against those issues put forth or alternatively comment on them based on factual analysis for the benefit of the rest of us including those exposed to the US markets…….?
I think some of the comments Freckle makes are valid. There is no doubt that hedge funds are buying properties especially at the top end paying in some cases full price i cash.
Then look at markets like Texas that are currently booming and this was in a market that did not fall during the GFC so there could be a chance of the property mrket becoming over heated.
However it is also important that we look at the vacancy rates and rental increases over the last few years. Again in cities like Dallas rents have gone up by around 21% in the last 12 months. Property vacancy rates are now under 3% in many cities. This does show strong demand and a lot of people would like to have home ownership again. As finance gets easier I would expect demand to increase.
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lollol
Your a funny man.
We need to meet in person one day. It would be a pleasure learning from your business experiences.
Thanks and have a great day.
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Hi JT7,
Thanks for your comment.
Unfortunately I am not as tech savvy as Freckle and Zmagen are so I cant really compete with them when it comes to backing up with information and stats.
I have the utmost respect for Freckle and enjoy his post but still stand by what I said a while ago. If everything mentioned in previous posts about the US is really going to happen than this will heavily affect every country world wide and no one will be spared.
After living in the US for the past year everything seems to be normal. People are working, shopping, going to sporting events, buying real estate, buying cars, etc…
I am happy to go about business the same way I have so far and continue buying real estate here.
If I was invested in Australian property with a LTV of 80% or more I would be more worried in that scenario than I currently am here in the US.
The worlds smartest people come from this country. I am sure they will figure something out to get it back on track.
Thanks and have a great day.
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Nigel Kibel wrote:I think some of the comments Freckle makes are valid. There is no doubt that hedge funds are buying properties especially at the top end paying in some cases full price i cash.Then look at markets like Texas that are currently booming and this was in a market that did not fall during the GFC so there could be a chance of the property mrket becoming over heated.
However it is also important that we look at the vacancy rates and rental increases over the last few years. Again in cities like Dallas rents have gone up by around 21% in the last 12 months. Property vacancy rates are now under 3% in many cities. This does show strong demand and a lot of people would like to have home ownership again. As finance gets easier I would expect demand to increase.
I agree Nigel with your last sentence. As soon as banks start lending again I believe the owner occupiers will start buying again. Its much cheaper to buy and pay a mortgage than rent. Some of the mortgages are just too good. I am very happy to have my SSN so I can start shopping around for some loans now without being considered and alien haha.
Thanks.
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ENG Don't look for lending requirements to make some sweeping change.. The underwriting guidelines for Owner ocuppied will stay were they are for the long term.. Heck with FHA loans its still only 3% down.. and rates are great.. You just need decent credit a Job.. The NO money down loans and bad credit loans just are not coming back. One would have to be a fool to bring that product to market for homeowners. And the banks have long memories. In my opinoin if a young family or single person or domestic partners cannot coble together 3% plus settlement costs they should not be buying a home and should stay as renters. And if you have bad credit its because you can't manage your income vis a vi your expenses.. ( with the exception of Medical debt) … So what this leads to is that there are whole sections of many of the markets that is popular for turn key investing that will NEVER come back to home ownership and will always be trashflow housing period. Any one who is buying properties in the credit challenged low end demographic will have a rental for ever basically. So to buy those types of homes with the idea that banks are going to lend again and you will make some big capital growth because Owner ocuppied will suddenly be able to get financing and move back into these neighborhoods is really and ill conceived notion. Those US citizens that want to own homes will be looking at nicer neighborhoods where there are fellow home owners not neighborhoods that are 50% or more rentals. Now granted the Trashflow houses will give you the higher yields however the Capital Growth is going to be in the properties that are much nicer than these and as such an investor has to pay far more than 25 to 50k for them… Just like my TWH company ( which by the way I just got bought out of last week Yah) our GA portfolio was sold to a hedge fund. Here on the west coast housing for owner occ's has rebounded substantially, however we are talking medium home prices 250 to 275.. with a really nice sweet spot at 350 to 425k.. And new construction is red hot in Portland Or. In the last 18 months I have sold each of my new builds prior to completion. I have 11 houses going now and 7 on the market at this time of the 7 on the market 5 were sold in the first 30 days of construction. When you look at middle america markets you will see new construction in the low 100's to mid 100's this is were your first time buyers are going to be buying.. Same in Texas and Florida.. they are not going to be buying in beat up old rental neighborhoods at least thats my personal opinion on the subject.
Old but worth a couple of comments. We all grumble about mark-ups on wholesale property but if the numbers work – who cares? I buy from tons of wholesalers and I don't mind paying their mark-ups because they same me the headaches of making offers on listed properties that end up selling either in packages to hedge fund buyers or go for double the listing price…either way, a complete waste of time for me. If the deal makes sense, I don't care what they paid for it. It's all about the numbers. Zillow and the like can give you a snapshot as to "value" but you'd better served to value anything in terms of cap rate applied against net rents. At least that is how I value every deal. I've been in my metro Atlanta market for nearly 25 years now and value my network of wholesalers and happily pay them for their deals. You should too but do your homework….what is it rented for and what's the net return….not pro forma but actual!
Financing rental properties will come down to your network and will vary from market to market. Most of my investors are all cash, as am I. We are now able to offer 50% financing at good rates on rented and cashflowing properties in and around Atlanta. The lender we use bases the loan strictly on a quick appraisal and the net rents from the property. Because we only do shared housing, our investors not only get better returns but now better financing. If you are trying to find financing, there is nothing wrong with seller offered terms….just read it all thoroughly. Definitely network with individuals here and in the market you are investing in. Happy investing!
Thanks Jay
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Sorry all, the comment above was meant to post to a much older thread about wholesaler mark-ups and not for here. Not sure how that happened. The hedge funds will fail both at the rental game and the appreciation game..at least in my humble opinion. Some already know it or there would be no reason to reach out to me to see how our model works. We are so small at this point and just in metro Atlanta so how would they even hear of us? They are looking to fix the problem that they already realize they have. Their opportunity is their curse…..they have so much money to move into properties that they are over paying in a lot of markets and buying into deals that will never cashflow. No group can handle buying 2,000 properties in one city in one month. I believe that a ton of these properties will start hitting the market in droves in about 5 years. Just a guess on my part. I think their only way out will be to package their holdings into derivatives and cash out that way. I think Freckle wrote about this last month. For my model, appreciation is just a bonus to us and our investors. For the hedgefunds, it's essential to their success and won't be realized. It will be very interesting to see how all of this plays out.
Key to success now is finding your niche – as Jay apparently has with new construction in his market. Deals in my market are often going for over list price now. With shared housing, I can pay more for them as long as they will rent and cashflow. I think there is a market for flippers who buy trashed homes, complete all system repairs & market to 1st time home buyers using a renovation loan to complete paint & carpet using the 203 program. Not my niche but I am certain it will work, especially in Atlanta where a lot of the cheaper homes are in marginal neighborhoods but have easy access to the interstate.
Many of the properties are selling for less than the minimum loan amount that lenders will go.. So no matter what you do you can't get a long term loan
jayhinrichs wrote:Many of the properties are selling for less than the minimum loan amount that lenders will go.. So no matter what you do you can't get a long term loanHi Jay,
As you know Peak has a great product out there.
Minimum lend is $15,000 lol
Thanks
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Does united states has any lenders offering loans using fully paid properties?
Without going there?
kevsgn wrote:Does united states has any lenders offering loans using fully paid properties?Without going there?
Hi kevsgn,
What do you mean by "fully paid properties"?
Thanks
EngeloRumora | Ohio Cashflow
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Hi engelorumora,
The houses are purchase without loan
Thanks
Yes I have been a fellow panelist with JP at investor events in LA… Peak is a private lender like I am, I was speaking more of a larger institutional lender.. If you look at the Scottsman guide you will see very few lenders will loan under 100k and some will go to 50k. I think what the last post was asking for was a refi of free and clear property.
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