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Hi Dobby,
Here are the details of the event at your request.Melbourne
Wednesday, 13th June, 2007
7:00pm start Â
Travelodge Southbank
9 Riverside Quay, Southbank
Bookings essential – limited seatingCoffee and tea is provided before and after the event. Self serve coffee and tea in foyer.
Noosa, QLD
Sat 16th June, 2007
2pm start
Ivory Palms Resort
73 Hilton Terrace,
Noosaville
Bookings essential – limited seatingTea and coffee provided
Sydney
Tuesday 19th June, 2007
7PM start
YWCA NSW
5-11 Wentworth Ave, Sydney
Bookings essential – limited seatingTea and coffee will be provided.
Hi Dobby,
For just $47 we are holding an Information night in June on U.S property. It will be purely educational that will allow people to walk away with a realistic and practical knowledge on the market.
We will be sharing our own experiences with you. The good and the bad. My business and property expert will be flying out from the U.S to meet with as many Aussies as possible.
Just for the record, this is not a sales event, hence the price. We will actually be losing money doing this for $47.
Anybody serious about U.S investing shouldn’t miss this night. You will never get an expert in the U.S market come and speak to you for $47.
TOPICS COVERED WILL BE:
1. Intro/History of real estate in US
a. Coasts vs. Middle America
b. Overall Benefits of investing in US
c. Why Texas is best2. Texas demographics and population
a. Texas loves babies
b. texas loves work/employees
c. demographics and what it means3. Texas cities – the run down
a. El Paso
b. Dallas and the Metroplex
c. Houston
d. The Valley
e. San Antonio4. Why SA to the Valley is so special
a. taxes
b. job sector
c. real estate
d. the future5. Examples of deals
6. How our partnerships and Joint Ventures with the US work
7. Upcoming events
8. Top 5 mistakes Aussies make when investing
Don,
Sorry about the delay in replying. I dont get on here as often as i should these days. I used to get the e-mail sent to my e-mail address when a new post is put on but since the forum has been updated, I dont get the automatic e-mails anymore.
Anyway as for time frames on this deal. It took about a month to close Don. There was a bit of mucking aroung involved and negotiating etc. Due diligence on 25 houses can also take a while.
Don the reason why we get the returns we do is because we are mostly getting peoples problems and in many situations the sellers dictate the terms. With this deal we didnt want to sell the houses in bulk but that was the condition we got the houses under. The benefit was if were prepared to do in return it was given to us at an excellent price. The seller didnt want to deal with 25 individual sales.
So timeframes vary done depending on the situation surrounding the deal. To get the higher returns unfortunately takes some effort and pain along the way. Everyone who has done deals with us will know that its not always a smooth ride but thats the reality if you want to get the good returns.
The guys I work with get there hands dirty like the locals to get these returns. It dosnt happen overnight and there is frustrations along the way.
There were times when we thought we would loose this deal. The important thing is that the investor and ourselves need to work together as a team. This was certainly the case with this deal.
Hence why relationships are the key with our business model as we all need to work together for everyone to make money.
All the best with your journey in NZL. I did pass your details onto a editor from the API magazine.
Not sure if you were contacted.
Regards
Chad
Nigel,
Here are the final numbers on the deal on how it ended up. Straight from the investor themselves. The investor who purchased these deals has flown over to see them as well just for the record. Also my business partner Brian drove to Stamford and met with her business partner who is on the deal with her and he was also very happy with the deal. Here it was from the investor herself!
My two business partners and I recently purchased a package of 25 rental houses near Dallas through Gr8 Real Estate.
We are very happy with the deal as the houses are in good condition and have positive cash flow – even with 4 of the 25 houses currently vacant we are achieving a gross yield of 18.8%pa. Because we purchased the properties at a wholesale price we also have the opportunity to make a profit selling the houses with owner finance. Based on current market values this would result in a net profit of around 83% on purchase price.
Here are the numbers:
Purchase price $465,000 (25 houses)
Purchase price per house $18,600
Monthly rent (4 vacant) $7,275 – 18.8% gross yield
Monthly rent (fully rented) $8,675 – 22.4% gross yieldOwner finance (average per house):
Rehab $1,000
Selling price $35,000
Profit on sale $15,400
ROI 83%Thanks Chad and Brian for your patience and persistence in getting this deal through and I look forward to doing more business with you in future.
Nigel, the advertised Price was $525k, thats how we got the deal from our wholesaler, after all was said and done and due diligence was done, yes there was some minor work that needed doing and the rent rolls were not 100% accurate.
So we ended up getting the deal for our investor at $465K .I hope this helps. Not that I need to justify our services on this forum. I dont need to. Again, due diligence is important and we are on our investors side, hence why we got this down to $465K.
All the best Nigel
Hi Guys,
In regards to posative cashflow in the U.S, its all in the buy to begin with. We can all do our due diligence on growth projections etc. I mean Texas is predicted to produce the highest growth over the next few years and the Rio Grande region is expected to grow by over 40%.
Anyway the point I am trying to make is this. To get the best posative cashflow requires hard work and doing things outside the square. To mitigate your risk, buying under market at least gives you an exit strategy and reduces your risk a little. Buying in growth markets is essential but buying correctly is just as important. I mean just because a market is predicting solid growth, its not enough in my opinion when we are talking about offshore investing. The risks are to high. I mean for me, I am not interested in investing in the U.S or anywhere else for that matter for 10% returns. The risk is to high.
Sp my things is this, buy in growth areas but also buy under value from the beginning. The reality is this, the really good deals can be a little messy at times and some headaches are inevitable. However like everything, if you are prepared to take on problems and turn them into solutions then thats where you are going to make your money.Let me give you a real life scenario that we just completed with a lady in Adelaide.
A lady just secured 10 acres of land from us only 10-15 minutes from Toyata in San Antonio. She has $175K equity in this land.
Why, because we solved someones problem with a solution. The seller was in financial trouble and had back taxes to pay on the land or else she was going to loose it. So we offered her a solution which would get her out of trouble and also leave some money in her pocket to start over. And we picked up prime land with great equity. To top it off, our investor only had to put down a $50k deposit and the seller is owner financing it interest free for 18 months.So already our investor is ahead regardless of the growth Texas is expected to produce.Â
Guys who ever services you use to purchase your real estate in the U.S just make sure there is some equity in the deal just to give you some leway incase you need to sell quickly.Nobody can predict the future, especially in this real estate game, all we can try and do is buy in a way so that if things dont work out as expected, which can happen and has happened, you can have a way out. Hopefully without losing any money.
Christine,
Just do your due diligence. If the numbers are truly what they say they are then yes it will cashflow.
at these prices the homes may need some rehab work also just make sure you get a anspection done on the place.
Are they retail or wholesale? Reason i ask is if they are retail, look into your finance options first.
They will be in average neighbourhoods which is ok. The main thing is make sure its not in slum areas.Make sure your property manager also understands section 8 and how it works. Not all do!
If you do go ahead with the sale, why not ask the seller to do it under owner finance for you also. This way you could potentially get away with putting no money down.If you dont know these people at all then i do think you are increasing your risk but i guess that dosnt mean that its not neccessarily a good deal.
So good luck with it but please just do heaps of due diligence.Oh another thing, maybe ask the seller to supply you with rent rolls as well so you can see proof of funds of rents being paid on these properties. You could also maybe try and get a contact number at section 8 and get info from them directly.
again good luck and i hope it works out for you.
JJ&JO
The best way to get out is to probably sell it through a good agent. I am doing so with mine at the moment also.
Did you pay retail for your properties? Depending on there condition and how long ago you purchased them will all depend on what you can get for them.Also you have a better chance of finding an owner occupier at retail prices if its a single family as apposed to a duplex.
My first property purchase in bufallo was a retail purchase. It was a single family home which i paid $39k for and it is on the market for $45k so as you can see there is not much in the game.We have had to do some repair work on this home as well so once all is said and done, we will definately be making a loss on this home.
I think anyone buying retail in this market need to be 100% sure the home is in sound condition.
As i have said many times before, to make this market work for you, its essential to buy properties under market value.
Buy homes that need some rehab work and then rent them out. Thats what the locals do. Local investors do not buy retail in these markets.You need to create it so that your ROI is at least 30% gross and above. Taxes are high, tenants are vulnerable and maintenance can also be high.
I am still making money here but i am doing it with a local and i have an excellent property manager that i found myself "
For Aussies though without the contacts, i recommend to stay away from this market or if you are going to enter it, make sure you dont pay retail "because you dont need to" do your numbers on a minimum 30% roi also otherwise you will probably end up losing in the long term.
Now that i understand this market in great detail, I would advise people to spend time on the ground there and developing there own relationships. Its definately not a market in my opinion for the light harted and its a very difficult market and lots of things to contend with for the returns you get.
I will continue to do a couple of flips pet year over there with my friend who lives there, but thats about it. If it wasnt for that relationship I would stay away for sure.
Long term you would do better buying in Australia than over there if we are talking paying retail.
Hi Richard and Linda.
Thanks for your interest. The dates of the U.S Investment sessions will be as follows:
Melbourne
Wednesday, 13th June, 2007
7:00pm start Â
Travelodge Southbank
9 Riverside Quay, Southbank
Bookings essential – limited seatingCoffee and tea is provided before and after the event. Self serve coffee and tea in foyer.
Sydney
Monday 18th June, 2007
7PM start
YWCA NSW
5-11 Wentworth Ave, Sydney
Bookings essential – limited seatingTea and coffee will be provided.
Noosa, QLD
Sat 16th June
2pm start
Ivory Palms Resort
73 Hilton Terrace,
Noosaville
Bookings essential – limited seatingThe main focus on the event will be to educate investors. Its simply to educate investors on the TEXAS market, what the market is doing right now and strategies to imply in that market. We will go through real deals that we have done with our investors as well. It is an opportunity to meet with Brian who is building a big investment business in texas right now and to ask him questions directly etc. The event is basically going to be the real deal. All the risks and things to be carefull of will also be discussed. There is definately money to be made in this market but there are also risks and things that people need to be aware of. Working with experienced people on the ground is essential. We have built a network that works and want to share this network, what they are doing and there knowledge with Australia so we are excited to bring Brian out here.
Anyone interested needs to simply go to my web site and register there interest. At that point I will provide people directly with further details.
At the very least, you will walk away with something else to think about and an undestanding about the Texas market.
It will be extremely educational and worth while and beleive anyone out there looking to maximise there returns should at least come along and listen to what we are doing.ÂThe information provided will enable you to greater understand the opportunities that exist in the Real Estate market in the U.S.A, specifically Texas. Although we admit we’d love to have you on board as a client or JV partner!
Regards
Chad
Thanks Nigel.
I am looking forward to it. It will be a great learning experience for myself and the strategies and knowlegde that will be shared will be very valuable. I get asked all the time about Tax and Legal structures etc.
So who better to learn from than investors who have done it and made it work. This is why we are arranging this event. Not to mention the networking opportunities as the event will be for Americans as well .
The more education and hands on experience and knowledge that can be shared the better.
If people can walk away with a greater understanding and knowledge after the 5 days we will be very happy.Regards
Chad
Providing Turnkey Real Estate Investments In The USA.
We also provide Owner Finance in a new emerging market.E-mail:[email protected]
web: http://www.gr8realestateinvestments.comON SKYPE AT: chaddylansimons
Caroline and Craig,
If you have a SSN you will be at an advantage when it comes to lending in the United States.
In reference to lending, if you do not want to verify income, in most cases, if you put down a 30% deposit it eliminates the problem.
A good broker in the United States will be able to advise you on your options in regards to this.Fell free to contact me and I will be happy to assist you with any questions you may have.
Regards
Chad
Providing Turnkey Real Estate Investments In The USA.
We also provide Owner Finance in a new emerging market.E-mail:[email protected]
web: http://www.gr8realestateinvestments.comON SKYPE AT: chaddylansimons
Guys,
Nigel is correct, you do need to have an understanding of the market or be working with people that do.
Right now Texas is one of the best markets to be in for both capital growth and if you buy wholesale then you can expect reasonable cash flow as well. You do need to buy correctly though.” Its all in the buy guys”. That’s where the money is made.
At the end of the day regardless of where you invest, your investment is only going to be as good as the people you have surrounding you.
You need to be so careful because there are also risks. I encourage everyone to do as much due diligence as possible.
One thing that can be done to protect yourself is ” have clauses in the contract” so that if something doesn’t come back quite right, then you are protected.
There will be circumstances where a deal is presented but after investigation, the numbers aren’t quite what you were told. That’s why you do due diligence.
That doesn’t just go for the U.S. That goes for anywhere.We just completed a deal in Stamford Texas with a lady in Sydney that just recently closed. We sent it out for a sale price of $525k. We had not seen the property nor did we work with the wholesaler before who sent us the deal. So once we found the investor who wanted this deal “based on the numbers we sent out”, Brian drove to Stamford and spent a day there inspecting the properties and paperwork etc such as the rent rolls and other important information.
To cut a long story short, there was minor cosmetic work that needed to be done. We estimated on average around $2k per property. Also the rent rolls were slightly out of date. Anyway she ended up still buying the 25 houses as they were a great deal. She ended up buying them for $465K though.
The point I am trying to make is that there is no cut and dry when it comes to real estate. The returns are good but it does come with being diligent and being active with your investments.
This lady is flying over to the U.S next month to view her properties etc. So don’t think for one minute its all rosy. All the normal risks and variables are there as they will be no matter where you invest. Investing remotely does have its challenges as well and it becomes so much more important to have good relationships set up.
I am fortunate because I am in a position to find great wholesale deals for Australians in the U.S.A. This is credit to Brian as he has worked very hard over the last 2.5years building a network in Texas with people in the industry. He gets these deals now because people have come to know that he can move properties and get them sold to his investors.
Even though we are getting good deals, people still need to also find themselves a good property manager if you are going to hold onto the properties. We have someone who does this for us however at the end of the day, its your investment and totally up to you who you use. Plenty of Australians now have real estate in the U.S and the great thing about this forum is that everyone has been willing to share there information and experiences. Different people use different accountants and property managers that they have found so the great thing is that there are plenty of resources.
The Texas market is definitely appreciating, so if you are going to want properties that are going to cash flow for you, the its going to come down to “the buy”. That’s the reality. Rents are starting to tighten therefore each property has to and should be looked at individually. There is still demand for rentals, its just that the prices are starting to drop. Buying under value or rehabbing and then re-financing are going to continue to create the good returns for you.
The other thing you need be aware of is to get the good deals, things need to be done outside the square box. I have had plenty of people call or e-mail saying some of the numbers they have seen are to good to be true. The reality is a lot of work goes on behind the scenes before a deal even goes out to investors. Plenty of negotiating and headaches have already taken place. Its really hard work getting good deals. It just doesn’t happen. That’s the reality of this business. And there are times when deals also fall through during the negotiations . That’s the nature of the beast if you want to be getting true wholesale real estate.
To give you just one example, we pick up TAX Sales. This is the sale of property by the government for non payment of taxes. The last 3 properties we have done for investors have been purchased through tax sales. Now to my knowledge the only way we can buy these properties is to physically go into the department, pay the back taxes owed on the property and do the paperwork there. I guess this is where things can get a little tricky with investors who have not worked with us before or don’t understand the U.S system and processes. Basically just for your knowledge, there are no sales contracts with this type of transaction as you are doing it with the government body. What happens is that when you buy the property, the title gets registered with there version of the Title Company and it can take up to 6 weeks for this to happen. That’s not 6 weeks before the property is yours, just 6 weeks before you will receive your “Warranty Deed” which is our equivalent of Title. Basically your proof of ownership.
All the details of properties are also registered on there government web site and once your Title is processed, you can view it on line. So its similar to Australia in that regard. When you buy a property here, it can take up to three months for it to be registered at the Title Office.
There are other means of finding good deals but the best way is to get your name out there with wholesalers who end up doing all the leg work for you. I am going to start putting together different educational information over the coming months (and when time permits) just on some of the things to be aware of when investing in the U.S. Other than that you can never supplement doing your own research as “Knowledge is the key” to success and also reduces risk.
At the end of the day, I look at investing offshore as another vehicle towards my goals and a form of diversification. Its definitely something that more and more Australians are starting to do and it is definitely worth while in my opinion providing things are done correctly.
Educate yourselves, understand the risks, jump on a plane and go and check it out! This way you can make informative decisions. Look at it as a way of diversifying your portfolio. I still think investing in your own back yard makes allot of sense as well.
Good luck with your research.
Providing Turnkey Real Estate Investments In The USA.
We also provide Owner Finance in a new emerging market.E-mail:[email protected]
web: http://www.gr8realestateinvestments.comON SKYPE AT: chaddylansimons
Hi Josh,
The best research you can do for yourself is to jump on a plane and go and see it for yourself.
The returns are only as good as the people you are dealing with. I know people making great returns and also know of situations were people have been burnt in the very same market.
So dont take it lighly, make no mistake about it, its very different and you really need to pick your areas.
Understand the demographics or work with someone who is an expert in that market. And that goes for any market where you are buying outside your back yard.
Stick to areas where the rents on a single family home (just as a guide) are no more than $850 a month in rent. You will find if you buy right they will also cashflow for you.
Be aware (which is very difficult if you havent been there) that there are no go zones that you would want to stay well clear of like down town and dont get sucked in purly on cashflow alone because it could be in a very bad neighbourhood where you could experience more problems than anything else.
Its essential in my opinion that you develop a good working relationship with people on the ground who are in the market who put there own money into properties in the market as well.
You would be amazed how many opinions you get on things but when you actually ask people so how many properties have you got etc, so many havent even done anything. The best education is getting in there and doing it. Only then do you really grasp what is going on and where you learn from your mistakes.
Also be aware of your markets and have an objective in place as to what you want to achieve. I say this because the are high yielding areas such as Bufallo etc in WNY however very slow capital growthso just be aware.
Lastly start small, get your feet wet and see what you think. But if you can definately invest the time in going there to have a look at it.
Good luck with your research.
chad
Providing Turnkey Real Estate Investments In The USA.
We also provide Owner Finance in a new emerging market.E-mail:[email protected]
web: http://www.gr8realestateinvestments.comON SKYPE AT: chaddylansimons
Hey Arvid,
World changer offered some good advice.
May I also add there are risks involved and you can get burnt if you are not careful.Also are you a property investor already in Australia. For what it is worth I don’t think new investors should consider investing abroad.
I think you need to have had some hands on experience in your own back yard first.
I say this because investing isn’t as easy as what people make it out to be and I think people investing in the u.s who are already investors go into it with a more realistic approach and understand the risks better.
We also talk about the “numbers” a lot in the investing world. You know how it goes “its all about the numbers”. This is true however when we are dealing in the U.S market, it’s really important to ensure that the numbers are realistic. The only way you will know if you are getting a good deal is to either educate yourself or develop a relationship with people there that you can trust.
To give you an example, one of my Aussie investors saw a house for sale on realtor.com and he thought it was a good deal. It needed rehab work and which ever agent he was dealing with said it would cost X amount of dollars to rehab the home. I say X because I cant remember the full story. Anyway so this investor then rings my business partner Brian in San Antonio and asks him if he can go into it with him and if he can use his rehab crew to renovate the house.
So then Brian checks it out for him and the true cost of the rehab was going to be a lot more than what the agent predicted.
Therefore the numbers he thought were good really wasn’t.Something else to consider is to ask yourself:
What is it that you actually want to achieve? Is it cash flow, is it generating quick profits etc etc. This will direct you to a specific type of strategy if you do decide to invest.
Don’t by anything without comps and relevant paperwork on the property. Make sure there are no tax liens on the property also otherwise you will find yourself in a very unpleasant position. Properties which are advertised as rented out get the rent rolls as well.
There are great returns to be made providing you do it correctly.
However it does take effort and for anyone who thinks it’s a buy and forget experience, think again. This is not for you if you are not prepared to take control of your investments.If you are however, you will reap the rewards.
One other thing as well, the really good deals will be gone before a real estate agent gets there hands on it.Very rarely will you get genuine wholesale deals through an agent. I am not suggesting that you can’t; I am just saying that % wise there wouldn’t be many.
By the time you buy from an agent you would probably be looking at retail prices and this is definitely not necessary in the U.S.
Regards
Chad
Providing Turnkey Real Estate Investments In The USA.
We also provide Owner Finance in a new emerging market.E-mail:[email protected]
web: http://www.gr8realestateinvestments.comON SKYPE AT: chaddylansimons
Hi Jo 2510,
I do know of someone who I could recommend.
If interested send me an e-mail at [email protected] and I will pass on her details.
Regards
Chad
Providing Turnkey Real Estate Investments In The USA.
We also provide Owner Finance in a new emerging market.E-mail:[email protected]
web: http://www.gr8realestateinvestments.comON SKYPE AT: chaddylansimons
Hey Luke,
Happy New Year to you mate.I hope 2007 brings you huge success and happiness.
In reference to brokers and getting loans approved, it’s hard to find a good broker who is willing to put in the effort on foreign national lending.
Ben is certainly one of them. I have not yet done a loan through him myself but do intend to give him a go with my two properties in the Valley.
I have used another guy based in San Antonio who is also very good and is actively researching foreign national loans.
The first loan seems to be the hardest to come through.
It is a patient game and those going through the process need to be patient as it can take. It seems to take between 4-7 weeks from the time of applying to everything going through.
Not much we can do about the red tape, but finding good brokers to deal with certainly helps.
Regards
Chad
Providing Turnkey Real Estate Investments In The USA.
We also provide Owner Finance in a new emerging market.E-mail:[email protected]
web: http://www.gr8realestateinvestments.comON SKYPE AT: chaddylansimons
In my own opinion, yes there is definitely a down turn in the U.S property market at present, however there are still good opportunities, especially down South.
According to FORTUNE, The housing market looks healthy down South for 2007.I have mentioned previously on this forum of the RIO GRANDE VALLEY – South Texas. I purchased 2 properties there already. Anyway on http://www.cnnmoney.com there is a good article on the outlook for 2007/2008 for the U.S Real Estate Market.
McAllen -Mission Texas is rated number 1: This is part of the Rio Grande Region of South Texas where we are currently investing.
They are projecting 8.5% growth in this region for 2007 and a 9.8% projected price change by 2008.San Antonio is projected to increase by 4.8% in 2007 and 3.5% for 2008.
Bare in mind these figures are based on median home prices. It doesn’t take into consideration the accelerated growth which can be created by buying low and rehabbing etc.
As for Buffalo, well as I have said before, WNY has many opportunities to make good money and can generate an excellent ROI. You need to be working with the locals on the ground though to make it work.
L.A Aussie, Plenty of people would sell you a property showing 20-25% ROI across WNY. Remember over 70% of this market is investor driven and there are plenty of Americans and Foreign Nationals investing in these markets. The locals are selling these properties at retail prices and probably making well over $15k plus profit in selling these houses to you despite the return. There is big money in buying, renovating and selling properties in this region and plenty of demand for them due to the high returns on paper.
Be aware though that good property management is hard to find and tenants in this environment are very up and down. One minute they are there and the next minute they are gone. As the sain goes, greater risk brings greater rewards. This is certainly the case for WNY and unless you are prepared to be very active with your investments I probably wouldn’t go there.
I think we would find that any market where there slow capital growth and a slow economy brings + positive real estate. I mean have a look at the Australian businesses offering + cash flow real estate . Have a look at the majority of the locations and the demographics. WNY is no different and will remain a + cash flow haven for a long time.
Property management and the calibre of tenants is a huge issue in this market, but there are ways around that. In 2007 we will be doing more rehabs in this market and selling them to owner occupiers and investors. Personally speaking, Buffalo is a good market to still make money, however I wouldn’t be paying retail prices to rent them out for long term holds. For anyone wanting to make money in this market there are two strategies that I would recommend looking at. They are:
1) Buy, Renovate and sell or flip the property: This is what the majority of the locals do. There is still a huge demand for owner occupied homes as well.
2)OWNER FINANCE: Sell the property under “owner finance” to the buyer. This will work well in this market due to the values of the houses. Obviously seek advice from a qualified Attorney to draw up contracts etc, but this is an excellent way to benefit from the cash flow the region has to offer without the property management hassle and maintenance hassles etc because it becomes the “purchasers responsibility”. We already use this strategy with our mobile homes in Texas and see no reason why it couldn’t work on these cheap properties in Buffalo. We haven’t actually used this strategy as yet but will be doing so in 2007.
Despite all the negative things said about this region, both myself and my U.S based business partners will make Buffalo work for us and our investors in 2007. At the end of the day its about developing a strategy which meets the demographics and circumstances of the market.
Happy New Year to you all.
Chad
Providing Turnkey Real Estate Investments In The USA.
We also provide Owner Finance in a new emerging market.E-mail:[email protected]
web: http://www.gr8realestateinvestments.comON SKYPE AT: chaddylansimons
Oli,
The U.S certainly does provide the opportunity for good yields and capital growth however you do need to do your homework.
Texas is one of the hottest markets in the U.S at the moment so that is a possible starting point for you.
Regards
Chad
Providing Turnkey Real Estate Investments In The USA.
We also provide Owner Finance in a new emerging market.E-mail:[email protected]
web: http://www.gr8realestateinvestments.comON SKYPE AT: chaddylansimons
Foundation,
In any real estate market where projections of a strong economy, high appreciation you can expect plenty of interest from investors. Especially in an Economy where house prices have soured and in many cases have dropped in value.
Certain parts of Texas which includes San Antonio is regarded to have “undervalued” real estate, however as you rightly pointed out, demand is high and there is an increase in both investor and owner occupied housing.
In regards to the drop in rental income, this is also true and homes are taking longer to rent out. What you need to be aware of though is that it all depends where you are investing and what market you are attracting. You quote that rents have dropped from $1301 to $1,099 according to the San Antonio Board of Realtors. I will assume that you are referring to monthly rents. You also quote “SINGLE FAMILY HOMES”.
My point is this. As an investor you wouldn’t want to be buying single family real estate in this market with markets rents like this. I am confident that single family properties with market rents over $1000USD per month will be in very good neighbourhoods and automatically you are cutting out lower to middle segment of the population where there is a need for housing.
Based on this specific figure that has been quoted, one has to ask if there report is based on a particular segment of the market as apposed to all of the areas and socio economic groups.
I work with very knowledgeable people in this market and I have also studied the market there very well and let me tell you, unless you are focussing on the lower to middle class neighbourhoods then yes you may have trouble leasing out your property. I am not suggesting that this market also hasn’t been flooded, but it is the majority of the market where housing is needed.
For single family homes in San Antonio, you don’t want to be purchasing properties where the rents are going to exceed $850 per month. That is the most we have ever received for rent for a single family home in the neighbourhoods that we focus on.
San Antonio certainly has received and is still receiving an extraordinary amount of attention and it is still an excellent market to be involved in. Due to the flooding though, there are still allot of people making lots of money as well. The key is to understand the market or deal with people that do because if you don’t then you can safely bet that you will probably get burnt.
I know several groups of people who buy and rehab homes etc in this market and I have spent time with them learning how they do it. Let me tell you none of them are focussing on higher end neighbourhoods which require such high rents.
Another major factor in this whole equation and one that you should get a stat on his what percentage of investors from out of state are paying “RETAIL” for there properties. It’s all in the “BUY” in most cases as well. There are heaps and heaps of wholesalers out there all across the U.S, not just Texas who find houses and try and off load them to investors or investment companies like ours for a fee. So many of these wholesalers are sharks and if you don’t know any better you could be paying more than what the property is even worth. “There is no need to buy property at retail prices”. If you want to make money, work with people on the ground that has access to good wholesalers. If you are just buying from realtors, yes you may be lucky to grab the occasional bargain but it won’t come along that often.
In closing, yes I agree that demand has made it harder to lease out properties but definitely not to the point where it’s not worth while investing. It can take a little more work than previously to find tenants however we are still finding them. The main thing is to get an understanding if the demographics, what the socio economic climate is and where the demands and needs are focus buying houses in those areas. Stay away from the slum areas and form the higher income areas. Somewhere in the middle is where you want to be. If you are really serious about making a go of it, invest the time in paying a visit.
One last thing doesn’t just think San Antonio, anywhere between San Antonio and the Mexican border to South Texas is growing and will perform very well.Merry Christmas to you all.
Regards
Chad
Providing Turnkey Real Estate Investments In The USA.
We also provide Owner Finance in a new emerging market.E-mail:[email protected]
web: http://www.gr8realestateinvestments.comON SKYPE AT: chaddylansimons
Hi ALL,
This was an e-mail from my Business Partner Brian who is based in San Antonio Texas and has been running an investment company from there for over 2yrs now.
He will be in AUSTRALIA late februaryearly March and we will be visiting Sydney, Melbourne and Brisbane.
Anyway we were having a conversation about the East Side of San Antonio and he wanted me to post his below e-mail.
The reason for this is thats its so important who you deal with and what information you receive. Dealing with knowledgable and experienced people is so important.Basically both Brian and I want to highlight that not all of the East side is bad. “Only the slum areas and specifically Downtown are bad”.
Here is Brians response below and again we just want everyone to obtain the correct information. Nigel is correct that there are slum areas to stay away from, just dont confuse that with the whole of the east side of san antonio.
RESPONSE FROM BRIAN:
San Antonio is a great market to be in. There are great investments all over the city. To me it is completely insane to label a part of town as bad and not worth investing in. The east side is a great place to do buisness and to label this side of town as horrible is just insane!!! The north east side of town is where I live. The Stone Oak subdivision is in the north east part of town and is currently one of the most sought after places to live in the city. The South East is being changed by Toyota and the new Texas A and M college planned there. I love the east side for investments. Here is a recent deal we have done there.
Purchase price 96K
Retail Value 125K
rents at 1,100 (guarantee) to 1,300/mo
These types of returns are great!!!!!
I do agree however that you folks are correct about the “downtown area” as it is a horrible area and where the worst of the worst live. That is why I’m shocked that all of the aussies that I’ve met who are working with other investment firms are buying these horrible investments. The rehab that we worked on was from another investment firm that to be honest really duped this investor.
Which leads me to my last point make sure you pick a strong team you could be in the best market in the world if your working with idiots then your going to get alot of pain and headaches coming your way. I wish you all the best with your investments. I hope to see all of you soon. I have been offered to work with alot of aussie firms that work with you folks but I chose Chad because he has 100% integrity. I have always said that if I get an investor into a bad deal I would buy it back from them. I make sure that my joint venture partners that work with investors directly subscribe to this notion and I know that Chad would do this in a heartbeat. I’m proud to be associated with him. His integrity is what sets him apart from the rest!!!
Wishing you all the best and a safe Christmas.
Brian Payton
Providing Turnkey Real Estate Investments In The USA.
We also provide Owner Finance in a new emerging market.E-mail:[email protected]
web: http://www.gr8realestateinvestments.comON SKYPE AT: chaddylansimons
Good work Nigel. I couldnt agree with you more that Education is the key. Good on you for providing an educational service.
Like yourself our U.S based tours are also Educational Tours to show people the market and where to invest and not to invest. It’s important for people to see it for themselves because it is quite different than Australia as far as demographics are concerned.
It also then gives people the opportunity to decide whether its for them or not. My U.S business partner and I are currently also putting together an Educational C.D for investors as well which have have extensive information specifically on the U.S market and the markets that we have invested in. We hope this will also help people as far as the education process goes.
I am glad to see that you are focussed on providing educational tools as well mate so good luck with it all.
I hope things are working well for you over there to.
Regards
Chad
Providing Turnkey Real Estate Investments In The USA.
We also provide Owner Finance in a new emerging market.E-mail:[email protected]
web: http://www.gr8realestateinvestments.comON SKYPE AT: chaddylansimons
