Wow overseas deals threads sure have died..

Sweet

Jay is back also.

Lets get this overseas section booming again hahahaha

Thanks

After a recent trip to the US I am interested to read what is happening over there from an investors perspective.

I was also surprised to hear from friends of friends who used to work on Wall Street that they have remained in a property the last 5 years that they haven't paid a mortgage payment on for the 5 years.  This is a house that has 4  bedrooms, a den, a massive pool and deck in a good neighbourhood that did lose some value after the GFC but has held fairly steady.  I am curious as to how after this length of time they can remain in the property.  They talk about looking at property they might move to when they are finally turfed out. I just wonder which of you would take them on as a tenant – NOT ONE mortgage payment made in 5 years. 

I'm also curious as to how they can be picky as to the type of property they will take – as apparently what they have looked at so far doesn't suit their needs.  They said that loans are sold and resold and when it goes through the process that they could just be at the bottom of the pile.  They are making no effort to move – not packing boxes just thinking about it – although they believe their time is almost up.  Can anyone shed light on this?

It's great to share and learn from many of the writers here.  We each have something to contribute and hopefully something to learn….and earn.  Much of this is perspective and experience.  The hedge funds have no doubt pushed up values in the markets in which they operate.  In Atlanta, they have actually been over-paying at the foreclosure sales and outbidding one another.  Why you ask?  Simple…they have raised the funds and they need to deploy them.  They cannot perform proper due diligence on most of their buys and their model is one of renting and cashing out with appreciation in 5 years.  But there might not be any appreciation at all in some of those markets…then what?  I don't know really.  I do know that in Atlanta, the funds are running into the same problems as everyone else….finding and keeping good tenants.  My group creates shared housing.  It works for us and produces better results than traditional single family rentals.  We have been approached by a couple of the hedge fund groups to come in and work to create a similar program for them.  I believe they are starting to recognize the flaws in their model which is which they are starting to create derivatives to get out it and, I agree with you, that if this comes to pass, it will eventually crash.  However, that will just create another opportunity for savvy investors to partner and get great deals.  It has always been my view that investing in single family homes is a Mom & Pop business that cannot be cookie cuttered.  That's the reason Warren Buffett talks about buying 100,000s of single family homes and why he isn't doing so directly.  There's no way to do it.  If our Atlanta market crashes again, all that will be lost is the 16% gains we've experience mostly based on the hedge fund buys and groups like ours will continue doing what we do.

If an asset continues to produce double digit returns, do you really care about it's market value?  No, you shouldn't.  There are a lot of different investment approaches in the US: some are selling notes, some wholesaling, some collecting a fee to simply be your guide, some partnering and so on.  Finding market savvy partners with boots on the ground in the markets you choose to invest in will be the key to your success.  We get asked all the time about appreciation and, for us, the simple answer is, it's just a bonus if you get it.  US investors before the crash were all about appreciation.  I only buy based on what I can do with the property today and how it will cashflow.  Our backend buyers are purchasing a renovated & rented asset with a guaranteed 10% return for 18 months.  That's good enough for those who want to actually be passive owners.  Our front-end partners are happy with a fixed return, in a short period, with a slice of the profits.  If we can turn their money 2 or 3 times a year, then they can do better with this model than most anything else.  Smart investors will diversify with a mix of investment routes….some notes, some partnering and some owning.

There are still many bargains to be had in our Atlanta market and others across the US….you have to know where to look and have the ability to turn them & keep them rented.  Otherwise, you just bought an anchor not an asset.

To Kimberly – where did you buy these?  all the best!  Andy