I think what happens is that markets change. It is a matter of looking for the opportunities.
I am finding that there are still great cash flow deals in Florida especially with commercial and apartment complexes where you can leverage by borrowing 60% on a non-recourse loans.
Now although I agree with your comments on Brisbane generally when I am looking at development projects in many cases they are already over priced.
In The United States you have a recovering economy and I believe that with commercial finance in place I think this creates new and exciting opportunities.
Yes there is a little less interest however much of that interest was from people looking at the bottom end of the market I am finding that most of my investors are more sophisticated and can see the opportunities.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Nigel,,,, Its very evident that the AU investor has totally turned off buying the in the US>.. based on this site as a barometer … With Hedge funds scooping up the deals and happy with 6% returns… The AU dollar low against the US dollar.. looks like the run on US properties is over for now.
I doubt 10 people in AU even look at these post anymore… so I will check in once a month and see if there is more than 2 post.. and or the same post where you tout your FLA investments.
I guess the AU investors are just staying home and buying local which probably makes a lot of sense if the markets there are climbing again which I hear they are.. US markets will never rise like AU markets except for CA. and a few other markets.. Certainly not florida
Well Jay I do not agree with you. We focus on Commercial property often with deals with upsides. Florida has fallen a long way and is rising. Even if it just goes back to normal levels. The deals we have been doing have been great. However we look for opportunities and not just off the self deals.
In terms of Australia I think the market here is shaky, although in theory Brisbane looks good we have been trying to buy development sites but most seem over priced. In America the market has lifted off the bottom and with finance now available you can get some great cash Flow deals. Most of the marketing companies target cheap housing. So naturally when the dollar falls that market starts to fall. However i believe you have to look at quality deals. The fact that you can leverage will make a big difference.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Sorry Nigel my point I tried to make is that given the amount of traffic and exciting banter that was on this site 2 years ago it has completely died except for you me frekle and Engelo.. And its not just the AU companies that have slowed down.. those selling US cash flow homes are not doing hardly any business right now… I was funding 5 to 10 deals a month to AU buyers looking for leverage on their IP I have not had even a application in the first quarter of the year… Its like someone just turned off the switch…
I base a lot of this on the fact that Hedge funds went into many markets and drove prices on the WHOLESALE level up to a point were the TURN KEY guys and MAREKETING companies that sell them had to raise their prices and as such returns were lowered and our TK properties just did not look as attractive… Many of these guys have now moved on to Malaysia and some to Japan and are selling to those folks.
I still do quite a bit of bizz in Orlando both providing 50 to 60% LTV non recourse loans and transactional funding ( short term to wholesalers) their sales efforts are mainly domestic IRA buyers. Although there is still inventory to be had.
I think with all things US real Estate Commercial deals are just like the houses you go for super high returns and they are not the best properties its just a fact that the prime commercial deals or what we call class A really did not budge in the downturn.. So when one goes into a value add situation which is a guess on my part but probably what your US partners are doing, picking the right project is important. I had a friend in PHX that scooped up a bunch of the lower end strip malls and has rode it out and is seeing some upside but a lot of work and a tad more risk for sure.. As people need a place to live people don’t necessarily need to open business’s or stores.. So its really dependent on the tenant mix and if you have national tenants with long term leases, and my point is if you have those you have a pretty safe solid investment but then your competing against those in the bizz here in the US that want those also…
Just like Multi family in Los Angeles class B or better the cap rates are 4% in Oregon 5% they get higher as you move east,, why because the tenant mix and ability to manage and collect rent gets harder so it boils down to rate of return = RISK
Nigel
The time to buy development sites was 2 years ago, this is what I have been doing in Perth, not shaky at all, its a numbers game as long as it stacks up then I buy. The market in general has been rising and very strong in Perth, however I believe it is now starting to slow down. Sydney seems to still have some steam.
I am also developing in Melb 4 unit site, it is becoming increasingly difficult to source sites as builders/investors are jumping in. I stick to small 3/4 unit developments get in and out.
As I mentioned before the power of leverage and the strong Australian property market makes investing home much more attractive than US and the numbers do appear to have dropped, less interest in US for this reason and also the fact that yields in general in US are no longer as attractive, which makes it a much riskier proposition.
It is also very difficult dealing with the systems in US as they are so archaic its unbelievable.
Seriously I have never ever dealt with anything like this. One example IRS, we sent in our tax last year, they processed my partners tax refunding the with holding tax, however did not process my documents, we have been waiting for 6 months now, many phone calls in the early hours of the morning, and finally my accountant phoned as now we were receiving fines for not processing our tax returns even though we had been discussing our documents and confirmation of this on the phone. They now have lost everything, now we are processing tax returns again. It appears that the government departments and banks seem to have no systems in place to make people/employees accountable its like I am dealing with some Third World Country, very strange. Anyway, enough of the rant, this however does make it more difficult not to mention the money you have to spend to resolve some of these issues.
I agree that the IRS are painful however it a matter of settle up the structures correctly. I do not agree with you about the US I think it depends on what end of the market you are looking at. I am mainly focusing on commercial property because the returns are there and with leverage are more attractive on anything you can buy in Australia.
My own view regarding projects in Australia is that you have to look at bigger projects. With a 4 unit site you are always competing with other investors and small builders. Once you move to a 20-50 unit site the competition is not as large. Plus I raise capital to buy these sites which makes it easier to get funding. Even 2 years ago it was made to make smaller projects stack up.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Nigel
The time to buy development sites was 2 years ago, this is what I have been doing in Perth, not shaky at all, its a numbers game as long as it stacks up then I buy. The market in general has been rising and very strong in Perth, however I believe it is now starting to slow down. Sydney seems to still have some steam.
I am also developing in Melb 4 unit site, it is becoming increasingly difficult to source sites as builders/investors are jumping in. I stick to small 3/4 unit developments get in and out.
As I mentioned before the power of leverage and the strong Australian property market makes investing home much more attractive than US and the numbers do appear to have dropped, less interest in US for this reason and also the fact that yields in general in US are no longer as attractive, which makes it a much riskier proposition.
It is also very difficult dealing with the systems in US as they are so archaic its unbelievable.
Seriously I have never ever dealt with anything like this. One example IRS, we sent in our tax last year, they processed my partners tax refunding the with holding tax, however did not process my documents, we have been waiting for 6 months now, many phone calls in the early hours of the morning, and finally my accountant phoned as now we were receiving fines for not processing our tax returns even though we had been discussing our documents and confirmation of this on the phone. They now have lost everything, now we are processing tax returns again. It appears that the government departments and banks seem to have no systems in place to make people/employees accountable its like I am dealing with some Third World Country, very strange. Anyway, enough of the rant, this however does make it more difficult not to mention the money you have to spend to resolve some of these issues.
hahahaha
I feel your pain.
Most government employees are on minimum wage and just don’t give a s…
“The banking system” lollol I cringe just typing those words haha
Also, I should write a book about what I had to go through to get all of my visa’s approved. Amazing stuff
I keep stressing the same things over and over again that establishing relationships with the right people on the ground makes the whole process much smoother and much easier. All good things take time and there is no reason jumping in to quickly.
With saying all of the above I still believe that its a once in lifetime opportunity to buy into certain areas of the US property market.
Some states have had growth ad might not be as lucrative then others but even these states are dirt cheap to what I believe is a very expensive Australia market.
The cashflow on some of these properties is just unbelievable. Even after living here for almost 2 years now I laugh when I crunch figures on some deals.
Thanks for reading and have a great day.
EngeloRumora | Ohio Cashflow
http://ohiocashflow.com/
Email Me | Phone MeF@#$ THE REST WORK WITH OHIO CASHFLOW TO INVEST
Hi Nigel
If you believe you have to do bigger projects then you are not actually looking. I have 3 projects on the go and would not touch them if there was not a minimum of 25% profit. Of course you are competing with other investors this will always be the case and builders have larger margins. I know several investors doing small projects in Australia and making good solid profits, so if you believe you can not do this then it will not happen because you will not make it happen and you will not be looking at the right areas.Larger projects are not for me as I want to control the project and not be dependent on others getting it right for me. I manage my own projects from finance, builder, structures but to give this responsibility to someone else is too much risk not to mention that the profits are then shared and not necessarily as attractive.
Engelo, Yes, I am sure many others are feeling the pain of dealing with IRS etc. never mind, worth it at the end:)
You must be logged in to reply to this topic. If you don't have an account, you can register here.
