[dhillon2Participant@dhillon2Join Date: 2007Post Count: 26]

April 8, 2019 - 11:09 pm

Hi Dale, thankyou for your question. Dean is right, property taxes can take a huge bite out of an investor’s returns. So how do I get around it? Simple. I avoid residential property and only do commercial real estate (larger apartment buildings, retail, office industrial etc). That’s because commercial real estate is sold NET of property taxes, insurance, maintenance, property management, staffing, advertising etc etc.

The cap rate these properties are sold at is after all these expenses have been paid. Coupled with the scale commercial property affords, it’s muuuuuch easier to project future cashflows for commercial real estate than residential, where you have to guestimate these expenses yourself.

Hope that helps

[dhillon2Participant@dhillon2Join Date: 2007Post Count: 26]

February 4, 2019 - 11:50 pm

Hi Ricky, so I live in the US, but it just so happens I’m back in Australia during this period- like I am every Christmas and new year. Always nice to visit friends and family at home. While I agree the money is in larger properties (because of scale) and money can be made from flips, I prefer a projects with a cashflow component.

Incidentally, since I’m here in Melbourne for the next 3 weeks, till we leave at the end of Feb, we’re having a meetup so people can ask us any questions. Details here-

Beat the Market by Going Overseas

Tuesday, Feb 19, 2019, 7:30 PM

Chadstone – The Fashion Capital
1341 Dandenong Road Chadstone, AU

5 Members Attending

Wanting to diversify your portfolio? Hedging yourself against inflation? Not sure where the Aussie Dollar is heading to? Wanting a safe, passive and profitable way to own real estate? Find out how we managed to mitigate these issues and achieve FINANCIAL FREEDOM in our 20s by investing in US Commercial real estate. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>…

Check out this Meetup →

[dhillon2Participant@dhillon2Join Date: 2007Post Count: 26]

February 1, 2018 - 3:17 pm

Hi Engelo, sorry, have we met? Were we meant to meet up sometime? :)
Are you Zach’s friend?

[dhillon2Participant@dhillon2Join Date: 2007Post Count: 26]

July 22, 2017 - 2:54 am

Reed! I didn’t know you visit these forums. Everyone- Reed Goossens is a genuine top bloke!

We’ve gone to the driving range together, we saw the Magnificent 7 together. Good guy.

Check out his podcast: Investing In The U.S. – An Aussie’s Guide to U.S. Real Estate

[dhillon2Participant@dhillon2Join Date: 2007Post Count: 26]

July 22, 2017 - 2:48 am

@caesar, the only I’d say would be such a post might run you afoul of the SEC. I see from your website that you’re soliciting funds and promising a return. You are therefore issuing a security- and assuming Americans can see this post and your website, you will come under the jurisdiction of the Securities and Exchange Commission.

Again, I don’t know what type of investor you’re trying to target, but under SEC Regulation D 506(b) you can’t do a general solicitation. So you can’t adertise on this forum or on your website. However under 506(c) you can do general advertisements, but you’ll have to make clear on your website that the deal is only open to Accredited Investors.

I say this because if you don’t check all the boxes, the SEC could force a sale of your assets, and/or your investors have grounds to sue. Again, I’m not an attorney, but that’s my understanding of the law. So I recommend you speak to a securities attorney to keep you safe.

Good luck & I wish you success :)

• This reply was modified 6 years, 9 months ago by  dhillon2.

[dhillon2Participant@dhillon2Join Date: 2007Post Count: 26]

July 22, 2017 - 2:30 am

@Sydney99- Hi Raj, by business plan I refer to implementing your specific strategy to get the asset to achieve the financial outcomes you want it to. Put another way, how you’re gonna add value.

As an example- In my last deal the business plan was to rehab 1/3 units in the next year and increase rents 9%. The other part of the equation was to cut expenses by installing 150 new toilets and shower heads to save on utility costs.

[dhillon2Participant@dhillon2Join Date: 2007Post Count: 26]

July 7, 2017 - 1:19 pm

@Sydney99- wow, that’s alot of questions. I’ll do my best. But I must say, your questions are very transactional in nature, which is a little too granular for me. I’ve got attorneys that handle the transactional side of things. My job is to make sure the deal underwrites, and then implementing the business plan. If you have questions of that nature I can be more useful.
Anyway, here it goes-

1) To open up a US bank account you gotta essentially do it in person in the US. Unless you’re an HSBC Premier customer. I’ve got a third method that involves a personal contact of mine, but I have to get to know you first :)

2) Yeah I guess.

3) It depends on your strategy- what kind of asset protection and structures you want in place. But from a purely transactional perspective, no, you do not NEED to setup an LLC first.

4) LLC’s are state based. Accordingly the rules governing each are different. This is beyond my scope.

5) You can source property yourself or you could pay someone to do it for you. Within each category there’s a whole constellation of service providers at all different prices ranges, depending on how much work you want to do and how much you want to pay.

6) Yes, you can get a building inspector to do that.

7) I deal with Commercial property (Apartment buildings) attorneys essentially draw up all the documents.

8) Direct this question to an attorney

9) In Commercial property, its whatever agreement you can come to between you and the seller.

10) No

11) I use wire transfers

12) Yes

13) In my experience, everything is electronic, then when you close you get a very very thick
wad of papers.

14) You are missing many steps. Get in touch with an attorney you trust. If you need help in this, I can refer you to people I’ve used.

Hope that helps Sydney99 :)

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July 7, 2017 - 1:02 pm

@Sitbon- I agree with everything Nigel said. Regarding question (3) – Trulia and citydata are ok solutions for the data you’re looking for that are free. However I use mainly use Costar & Yardi Matrix for such info. Both sites are behind fairly pricey paywalls. PM me and I may be able to get you a report if you tell me what specific market info you want.

For Question (4) – I’ve only done Apartment Buildings here. For larger apartment buildings you’re looking at 3-5% of gross income. Houses I don’t know

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May 30, 2017 - 12:54 pm

It seems that I will be traveling back to Melbourne after all! Just for a week to attend a friend’s wedding and my mum’s birthday.

I’ll be inviting some friends to my place to talk US property investing on Thursday night June 22nd. If any of you feel like coming over, please PM me and I’ll send you the details. Melbourne SE suburbs.

Take care and good investing :)

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May 6, 2017 - 4:48 am

Hi Bjoern, apologies for the late reply. In the past 2 weeks I’ve been traveling to LA, Memphis and Dallas and just got back home. Also currently in the middle of 2 deals.

Re: buyers agents- do you mean local real estate brokers? Or turnkey providers? In general I don’t use either, for deal flow I approach the selling brokers directly. However I do have friends that work in those fields. Happy to make an introduction if you wish, but I don’t think I’ve actually used any of their services? We just hang out :)

Like I said, currently in the middle of some deals. Closed on 1 two weeks ago, in the middle of one currently. However we’d have to see if my investment objectives align with yours, or even if we’re a good fit.

Was gonna make a trip back to Melbourne this June, but turns out my wife’s pregnant! So our obstatrician advised against travel. Feel free to private message or email me if you wish to talk further / or if you want specific introductions. And excuse my tardiness, I don’t check this forum all that often :)
Take care, wishing you the best.

[dhillon2Participant@dhillon2Join Date: 2007Post Count: 26]

May 6, 2017 - 4:36 am

Hi Ron,
which part of Florida is your asset located in?
I have my own staff managing my assets, so I can’t help with any recommendations. But if your assets are in Sth Flordia, I can get my people to verify in person if units are occupied.

[dhillon2Participant@dhillon2Join Date: 2007Post Count: 26]

April 12, 2017 - 7:34 am

@jaxon, apologies for the late reply. I don’t check this website all that often now that I’m in Houston. I’m also in the middle of 2 deals, and last week I had the amazing privilege of being on a cruise ship with Robert Kiyosaki! An unreal experience. Anyway, if you want a more timely response email me- [email protected]

Anyway, to answer your question-

1) All the multifamily deals I bought in 2011 turned out awesome. They had a gross yield of 30%, net return of ~15%. Then doubled in value by 2015. I then refinanced these and pulled out all my money, and essentially have an infinite return. A great financial result. The cost was I had to move country, and leave all my friends/family behind.

2) Some Aussies were interested in my work so they wanted to come on board. So I set up a syndication. I raised too little money for the deal- just enough for the downpayment, but not enough for the rehab. Consequently we got this rehab money through the monthly cashflow. So returns were aenemic the first 2 years. However, after a 2.5 yr hold we increased gross income from $420k to $540k. We borrowed against this increased value, and my investors got all their capital back (plus some) and are now getting an infinite return. So overall it was a great deal, but troublesome in that I should have been clearer on the strategy and, better managed my investors’ expectations. Investors were happy the result nonetheless.

3) Strategy essentially has been some variation of buy & hold. Its worked inasmuch that the properties have become equity traps. I also pay less tax because of the depreciation, which is handy because I’m now answerable to the ATO and IRS, and I don’t trigger capital gains taxes which are hefty.

Re: taxes, I heard a really interesting anecdote at a Tony Robbins event I attended in Dallas last year. If you take $1 and double it 20 times you get a little over $1MM. If you repeat that same process but this time take out 30% tax at each stage- instead of ending up with $1MM+ you end up with just over $30k. A staggering difference! So listen to the government, follow the laws, and know what is deductable and what isn’t.

• This reply was modified 7 years ago by  dhillon2.

[dhillon2Participant@dhillon2Join Date: 2007Post Count: 26]

April 12, 2017 - 7:09 am

@ DeanCollins – I think I might have misunderstood your original question. I’ve taken out loans amortized for 30years, but I don’t know of any non-recourse loan that has a 30 yr fixed term. The loan i referenced in my previous answer was a Freddie Mac loan.

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March 30, 2017 - 3:20 pm

Hi DeanCollins, with the obvious caveat that I’m not a banker (just a private investor) my thoughts on the matter-

– The finance industry is soooo much more competitive here. You have financing options every shade of the rainbow. From hard money lenders, to community banks to National banks, to private lenders, to the US Govt effectively; there are just so many finance options here. This competitive environment is definitely good for the discerning consumer.

– That said, the gold standard for the best type of debt you can get is not through ‘the banks’ per se, but Agency debt- debt which qualifies to be sold to Freddie Mac & Fannie Mae. These products are non-recourse have the lowest interest rates, 30 amortization etc. Best terms by far in the market. Having taken out 2 of these loans last year, they do have stipulation called “Yield Maintenace” – which essentially is a pre-payment penalty.

[dhillon2Participant@dhillon2Join Date: 2007Post Count: 26]

January 17, 2017 - 5:10 pm

I’ve never transacted in Michigan, and I don’t think I know anyone that’s currently based there. So I can’t really say.

What’s your thinking behind your interest?

For starters, I’d say you gotta hop on a plane and build real relationships.

I know this is a forum, so its weird to recommend another forum but the US based https://www.biggerpockets.com/ community is really vibrant. Maybe reach out to someone based there? However be careful, the US is full of sharks and conmen, so like I said, hop on a plane and eyeball anyone you intend to do business with.

Sorry I cant be of more help.

[dhillon2Participant@dhillon2Join Date: 2007Post Count: 26]

January 15, 2017 - 2:29 pm

Well that was easy!

I’m back in Houston now- back on the hunt. Will be checking this forum less often now, but if any of you have any other questions don’t hesitate to ask.

Good investing!

Kevin

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December 29, 2016 - 9:42 am

Hi Jack,

Congratulations on your plans! Austin and DFW are great markets. We were in DFW 3 weeks ago, and Austin in June. Some thoughts:

– Generally US zoning and planning rules are much less restrictive than Aussie planning regs, hence US urban sprawl. Consequently areas don’t really ‘gentrify’, as developers would rather rebuild in a totally brand new area. As opposed to Australia where greenbelts around cities are much more heavily enforced hence the relative density of Australian cities and the support for areas to gentrify. What I’m saying is go to areas where there is infrastructure, job and population growth.

So the southern states are a generally good bet. See –
https://houstonagentmagazine.com/2016/12/21/texas-no-1-population-growth-will-real-estate-markets-follow/

– Market Cycles,
DFW & Austin have had HUGE price growth in the past 3 years. There are really sound fundamental reasons for this, but there is some concern about ‘frothiness’ in the market. If you’re flipping you really want to pay attention to that, as the end sales price is where all your profit is. Cashflow will see you through these times, so guess I’m suggesting my strategy. Then again, I’m biased. I’ve never flipped anything. Regarding market cycles check out this-

https://www.realestateconsulting.com/the-housing-cycle-market-by-market/
The reason I’m in Houston is because that’s the counter-cyclical play.

– If you’re doing an active strategy such as flipping, you essentially have to be there. Otherwise it’ll be a coinflip as to whether the people working on your behalf are diligent or not (most aren’t). Myself and 4 other friends invested back in the US in 2011. The ones that made serious money (2) were the once that moved there; the other 3 eventually sold up having mixed outcomes because management was too troublesome.

– I know two other Aussie’s flipping houses kinda around Kansas City, and another in San Antonio. I can put you in touch with em if you wish.

Good luck!

btw- I’m doing sharing a talk with close family and friends about our work tomorrow night Fri Dec 30th, 6:30pm in Scoresby. Its at my mother in law’s house so I won’t publish the address here, but PM me if you’d like the details.

• This reply was modified 7 years, 4 months ago by  dhillon2.

[dhillon2Participant@dhillon2Join Date: 2007Post Count: 26]

March 26, 2011 - 4:44 am

Thanks for the advice TH and Judith! Much appreciated.

Since writing my last post, I’ve driven across Alligator Alley to see the South West coast of Florida ie. Cape Coral and Fort Myers. Apparently the South East of Florida is about 1-2 years behind. I can now testify to the serious effects of the US economic downturn.

[dhillon2Participant@dhillon2Join Date: 2007Post Count: 26]

March 24, 2011 - 5:44 am

WOW! I didn’t even know that this thread was still active since the end of British Buyer’s 1st trip to Miami! Glad to see its still ALIVE

We’ve been here for 3 weeks now and I feel like we’ve learnt so much already! Firstly, I have been quite surprised that alot of the communities along the South Florida coast seem to be unaffected by this economic downturn. There are so many sports cars on the road – but I did find out that cars here are alot cheaper, especially secondhand ones.

We went to Atlantic Avenue in Delray Beach. Its lively, crowded with people, lots of alfresco dining and art galleries. We also went to West Palm Beach and I must say that I’ve never seen so many luxury yachts in my life! Sydney’s collection pales in comparison. I believe there will be an International Boat Show on this weekend. We went to the Farmers Market, where there are a great many stalls with high quality produce, live music and lots of locals walking their pet dogs. We drove down Las Olas Boulevard in Fort Lauderdale and marvelled at how many beautiful properties there were, with their private yachts parked on the canals (one even had a light aircraft on a barge)! Surely part of Florida’s unemployment statistics includes alot of ultra wealthy retirees?

Miami was also teeming with activity, I believe the Ericsson Tennis Open is on currently. Admittedly, we probably went to the nicer areas ie. Miami Beach, Bricknell, Coral Gables. After driving around the streets, we soon realised the scale of the market here in South Florida, which is quite difficult to grasp when you come from a small population, that is Australia. There are so many more people here, and people need to live somewhere, so consequently the property market here is HUGE!

Question: Does a Visa debit card help build up a Credit Score? I thought you need to use actual credit to do so? I’m having difficulties getting a Credit Card (because I don’t have a Social Security Number), but have no problems obtaining a Visa debit card a.ka. pre-paid Mastercards. Even Costco rejected me!

Your Aussie dollar can certainly buy you ALOT more here in the US. Despite some great points on this thread about the current state of the property market, I’m feeling quite optimistic.

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November 18, 2010 - 12:20 pm

Thanks Chui for sharing that article. Bloody good.