Hi All,
First of all, thank you to everyone who’s contributed on this forum! I signed up for an account and have been browsing and studying the forums few the past few hours. There’s some very very good information on here!
My name’s Michael (23), I had read several books on property investing, and purchased some coaching (for Dad and I) before I started my full-time job in Australia 2 years ago to build my investment principal (which I didn’t have at the time) but was moved to the US for a temporary work assignment. This temporary work assignment took much longer than anticipated, but has put me in a much better financial position (pay rise, most expenses paid by the company). Due to my absence in Australia and altered goals I chose to put my property investment ambitions on hold. Now I’ve found that my work assignment will be over at the end of the year when I will return to Australia.
My current financial situation: No debt (student, consumer, car, mortgage) whatsoever, lots of savings (will reach $100K before the end of the year), no assets (no properties yet), clean credit file, slightly above average income. Very high savings (80%+ of salary + some allowance). For all tax and residency purposes, I am currently still employed from within Australia.
So my question is, how realistic is it to try and get my first property deal going from overseas? Would anyone recommend this, especially for a beginner? I do have some people that may be able to do inspections for me if needed (my dad has some IPs, but is also still relatively new to the game).
I would like to get started as soon as possible as I believe another 6 months of letting my money sit in my savings account is wasted time.. I have the financial ability right now. But I can wait until I get back if necessary. My savings will have increased and I can use this time to educate myself further and really solidify my strategies and knowledge. Currently I’m also not up to date at all with the Australian market, or economic situation anymore, is this something I should be concerned about?
I would start by looking at a property between $250-350k with a good balance of capital growth and cashflow (is 4-5% each reasonable?). I will pay 20% LVR for it and can dump the rest of my savings in an offset account. I’m at this stage relatively risk averse until I get more experience. I am in a position to make a similar second investment very soon afterwards.
My goal is to make $5000 per month of passive income by 2023 through property investing. I would highly appreciate your questions and advice to help me on my path to make this happen!
I would also be very interested in having someone much more experienced coach or mentor me (A PM would also be much appreciated!). I’ve also looked into Steve’s mentorship program, and have scheduled a call for in a few weeks, as I will be visiting Australia for 3 weeks (would that be enough to find a deal? Or too much pressure?).
I would also be interested in finding some oportunities to invest here in the US. What is required for that? Do I need a special Visa? Sign some forms for tax purposes? Has anybody done this before?
Apologies for the information overload, just want to cast the net as wide as possible! Please let me know your thoughts!
Kind regards,
Michael
Hi Michael
Welcome to the forum and i hope you enjoy your time with us.
We act for dozens of expat forum members whether it be arranging their finance or indeed engaged as a BA for them in sourcing an investment property. Being overseas when it comes to buying your first IP should not be a barrier at all.
In saying this financing such a deal might be harder than you think. If you are considered self employed for Tax and Residency purposes lenders are going to want to sight your last 2 Years Tax Returns and serviceability will be worked off your net taxable income.
The fact you have a temporary work assignment will not go in your favour although a percentage of the potential rental income can be considered.
If you have narrowed down your target area then 2-3 weeks of solid searching should be enough although ensure you have a suitable settlement period as handling loan documents when overseas can be difficult.
We normally have them emailed to our clients but some lenders will insist on posting them to you.
Very much horses for course when it comes to a suitable lender.
Buying in the US is a totally different concept and you will not find it so easy to obtain traditional style finance.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Richard,
Thank you for your response!
To clarify: I will have permanent full-time time employment at the company I work for starting in July. I will then also have two years of favourable tax return statements that I can show to lenders. Apologies I was unclear on that. After July financing should not be a problem!
I will probably not start investing in the US, but am still interested in the process if anyone’s done it before. I’ll do some more research into that myself as well.
Where would I go to find the first property? Can this be done online? Is realestate.com.au a good place to look for deals? I’ve been told it may not be, as most good deals will not be posted there, or will be snatched up in no time. Again, I will do some more research on this step also. I haven’t taken sufficient time yet to search the forums/etc for answers, but thank you for reassuring that being overseas shouldn’t be a problem.
Kind regards,
Michael
Hi Michael
Yes you might need 3 months permanent employment but few ways to get over that.
http://www.realestate.com.au is a useful web sight but of course a Real Estate agent will tell you anything when they are selling you a property.
Yes I agree most decent deals don’t get listed or when they are they go very quickly.
Being an expat even with a pre-approval this will go against you as the agent may not due to time differences be able to get hold of you when he needs a quick response. Also co-ordinating building & pest inspections etc might be hard from overseas.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi!
Sounds like you are a very ambitious and goal-oriented person! To my thinking in terms of your budget you can consider a few options:
1) short-term rentals (yields 5-7%)
2) long-term rentals (yields 2-3% but less problems with management)
To my thinking your savings cannot buy a reliable commercial property yet. But residential property has higher liquidity, that means you can sell it without discount and quite fast if location will be properly chosen
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