Forum Replies Created
Ok whoa everyone I got a little carried away and I apologize.. Nigel’s partners post just struck me wrong, I am not commenting on the Merrits of any investments anyone makes other than Nigel and I have also come from the same place we both think low end ghetto Detroit type properties are not appropriate for out of area investors and or out of country for certain.
My point was that if investors want to buy or invest in Multi family in the US its not like SFR’s so to set the record straight here is how it goes from my knowledge.
1. Most commercial brokers do not list on the SFR MLS systems. They list on Loop net or other pay for MLS type systems.
2. There are Hundreds if not thousands of companies in the US that buy these type’s of properties then sell interest in a 506 type securities offering to Mainly what we called Accredited investors. these are investors with net worth over 1mil excluding personal residence and or make over 200k for the last 3 years. So many top notch companies out there with thousands of doors in their portfolios.
3. Many deals do not get to the public through a broker chain but hey get to the public by the listing broker.. The listing brokers are always trying to find their own buyer so they get both the buy and sell side of the commission. These 1 mil to 5to 7 mil.. When you get over 10 mil the listing brokers will not pay another broker any fee usually and the property is usually sold to one of their existing clients in their brokerage network.
4. Prime US multi families trade from 3 caps SF LA NY to 4 to 5 caps Seattle Portland Denver. 6 to 8 Texas.. Then over 8 is other areas of the country were turn over is higher and vacancies are higher so the returns need to be better for the risk. Then you have 10 to 15 caps or higher that are primarily ghetto properties in war zones.
Office commercial is Riskier based on the fact that its so heavily relies on Jobs and overall economy … And in parts of the US were the economies got hammered a lot of office and retail commercial fell through the floor in value… So a little more risk in those..
For comparisons there I a new funding mechanism called Crowd funding running around the US right now. They do all their deals in partnerships 506 D’s and C’s or multi member LLC. You can get on their mailing list and see what deals they are doing in this space.
I have done deals with two of them one is realty mogul ( Juilliene Hellman) and the other is Realty Shares Nav Athwal. If you register on their site they will send you he fine details of many of these types of investment.s
Nigel as to you question of what do I personally invest in… Well most everything RE related.. as you know I ran TWH and sold out to my partner I bought 350 SFR’s and sold our Atlanta homes for a 60% return giving our investors 25 to 30% return.. Had a few Aussie doctors in that group… I build new construction in Portland Oregon I have 15 homes under construction now. and about 100 lots ahead of me enough to do for the next 3 years.. Then I also consult with a company that does non recourse lending for IP properties to Foreigners and USA IRAs We do about 500to 1mil month of this.. Last year we did probably 50 deals with Aussies this year not a one all our borrowers are US Ira’s… Lastly I do JV deals with turn key providers throughout the US all very short term fix and flip deals.
So I guess you could say I have put my money were my big fat and sometimes rude mouth is….:)
John,,, I assume your Nigel’s US partner.
I have to take you to task on this one… For one I know the AU investor has been subject to buying IP that were SFR’s from Turn Key providers. Nigel being one of them… And there was this thought process that these companies had this super secret no one else knows about inventory that they could buy at a huge discount.. Well in reality most of those Schemes the AU investor paid far more than market value or what one could buy on the open market. We have all been down that road.
FOR YOU TO STATE THAT YOUR APARTMENT DEAL IS DIRECT TO THE INVESTOR IS A BIG BUNCH OF GARBAGE IN MY OPINON. Apartment deals are listed on Loop net and with other commercial brokers.. they are not sold like SFR’s through turn key operators where the TK operator rakes a profit off the top for putting the deal together. I am not saying your Apartment deals in FLA are not good investments, What I am saying is these are traded on the open market every day.. and no one need some special secret agent to find them. Especially the deal your touting that is not a particularly great deal folks can find better deals on their own through commercial brokers and loop net.
Now you may be using the foreign exemption were you can pool investors and are exempt from US securities laws since your investors are all off shore I would bet a nice green apple that’s what your doing otherwise you would just sell to the millions of US investors looking for cash flow RE.
Engelo Ivan
I have no dog in this hunt…. Engelo I am going to put you on the spot here… a 13k home by definition in the US is usually not a strong B class asset LOL….
does not mean its a bad deal however I think anyone who has read anything I have written over he last years knows my stance on these types of properties.
Engelo I have a few words of advice for you.. ONE you need to go to California LA specific why your hanging out in Toledo OH of all places … Go West young man… deals are there but you also have the female of the species ad at your age that’s were you want to be LA not Toledo.. I am an old gezer but you my friend need to move on.
the last foreclosure auction I attended in Atlanta there were Chinese bidders spending a lot of money on homes. We snuck a few out that day but then it just got crazy and we exited the market entirely.. Sold all our homes to a hedge fund…
@redwood…. Is it just as dead on the other Aussie site sommer something? that site was even more user unfriendly than this site.
the average investor is just not signing in and conversing anymore. Just those in the bizz…
Ziv,,,,, I think the play in the US has gone to value add.. as opposed to buy and hold.
I don’t know anything about Japan other than one of my business partners is Japanese and her brother is a major developer in Tokyo in fact his company is listed on the front page of the Tokyo stock exchange ( which is a big deal I hear) I know its a billion dollar plus company.. they do condo’s in Tokyo and have moved to Singapore as well.
the rural or semi rural Japan I have no clue about.. However from what I know about the Japanese culture I can all but assure anyone that there is a radical difference between the average US renter and the Average Japanese renter..And that difference is one of respect continuity and longevity.. the US renter has none of these qualities by and large unfortunately.
Investors looking to get into the US right now I would recommend quick in and out deals with those you can trust
JLH
Great find with getting a local portfolio lender to lend on SFR non owner occ properties… Its been a long time coming.
For me I do a little non recourse lending in Atl and Orlando, Mainly US IRA buyers and a few Aussie and Malaysians.
As well as build new homes in the Portland metro area.. However my background is hard money lending in about 11 states to most of the TK operators that are US based over the last 15 years…
I also put a buy hold equity share Scheme together here in the states and ran that up to 350 homes.. And just recently sold out to my US partner… I am currently liquidating all of my rentals.. I have about 20 left. going ahead and taking profit while there is profit to get.
However Vis a Vi this site I have really just tried to educate AU investors as to what to look out for in the Mind Field of investing in the US.. As from what I had seen many AU investors just did not realize that our US properties can be in such diverse neighborhoods and I don’t think they fully comprehended what a True Ghetto was or is.. So I just mainly give my 2 cents based on my 35 years in the bizz to who ever will listen.. I like to think I have helped some make the right decisions with US investing.
I toyed with providing rentals to AU investors but never really got that going… I am more on the debt side of the equation than the equity side… I find that most AU investors do not really have the concept of private lending that abounds here in the states. And that this method of investing for them could be much safer with just as good if not much better returns over time.
From what I have seen many AU investors got in at the right time with the right folks and many have had just the opposite experience bad actors that they bought from and paid far to much for the property to begin with.My giants just beat up on the tribe this week Ouch
HI John,
What markets are you in over here in the US… are you selling SFR’s or more sophisticated type investments.
Agree with you the people on the ground in the US will make or break an investment
Zmagen I love the shiny object metaphor … And yes if I look back at my 35 years of doing real estate and through 3 distinct booms and busts here in the US.. with the 08 crash one of epic proportions. I have always moved to the next shiny object.
What I have done vis a vi clients is I have moved to working with fewer clients and give larger returns to attract the bigger players.. I am bringing my investors in as Owners of a company that we create.. Minimum investment 500k… so completely different model. I only have 4 clients presently but that represents about 4.4 mil in capital.. and as such I have 4 companies and we are true partners Instead of me running a company and making a profit per deal.. I just bring these folks in as partners and we create returns that are 1.5 to 2X what any one could make on their own.
Nigel I here ya on the Ghetto buys that people made and agree 1000%…… when you were in Texas I was in Atlanta.. and we had these same discussion what was better invest in a market that got hammered or one that trundled along.. As it turned out we did far better in Atlanta than anyone buying at the same time did in Texas.. Although to be fair the Texas market is finally moving a little as the herd mentality is focusing on Texas. I do a ton of Bizz in Orlando I close at least 5 to 10 loans to investors each month who are buying cash flow properties and my loans are all non recourse as well…
And since this site has basically boiled down to you and I and in the old days we could not talk about product or what we do.. But you do with every post and now I through in my product as well.. At least we can all come out into the open and talk about our deals. Even though I don’t think many people are watching or reading this based on the traffic….
I do not know who Long John is but he is pretty spot on from my perspective… both about how clunky this site was and is. and to how the market is perceived by investors in AU>…
Back in the boom days of this site you had Top Rental returns being one of the top dogs.. No one has heard from them in a year or two. Their properties were jack up in price .. But the Atlanta market did rise so those that bought from them are probably OK maybe not make a profit but can get their money back.. those that bought in lessor markets I am sure have suffered. The hedge funds put most of the companies in Atlanta out of bizz.
Since its obviously only 2 to 4 people looking at this site.. Can you please post what the Orlando partners are buying I am assuming you are just getting a fee for bringing in investors and have no ownership interest in these deals? Is this correct assumption or are you a principal that would be important info for your countrymen.. Also since its only us girls here why don’t you go ahead and describe exactly what your investing in IE Multi family,,, Small commercial ,, larger commercial… office Flex what is Commercial in your lexicon. And how exactly do your partners in the US structure these deals are you doing PPM’s 506 C or 5o6D or just ownership in LLC>.. Since your putting debt on the properties obviously the investors are not coming in as secured lenders.
So lets go ahead and get into specifics here maybe we can increase the amount of people that are interested in reading and you can make more sales for your US partners.
I have had a few AU folks contact me and ask about you… I tell them I have not met you in person. and I have no clue as to what your investing in. So I have nothing to say good or bad…
So if you show me yours I will show you mine :)
Long John… I have always had problems with this site… spell check would not work.. What specifically are you alluding to if you don’t mind sharing. ( I know see that spell check is auto and is working that should make me look better)
this was a very vigorous site and very active a few years Ago I was just assuming that the AU investor has turned off from the US market and I think that for a few reasons.
1. your dollar dropping.
2. Hedge funds in US buying up hundreds of thousands of homes and targeting 5 to 7% returns… thereby taking inventory from US wholesalers
3. those that still are in the Turnkey game in the US the yields have gone down substantially.. Although yields from most marketing companies and providers are best case scenarios and rarely take all expenses into account.
4. And or as Nigel so eloquently eluded to many got snookered into buying low end Ghetto houses with promises of 30% returns and not only did those returns not materialize they lost money. Then they tell friends and the next thing you know sales go way down which is what I have seen.
There are still deals out there and there will always be deals in every market condition.
Ziv whats Up?? this forum has died if you have not noticed. maybe we can resurrect it
Engelo ,,, I am booked through July and as Toledo is not on the top of my vacation hot spots I will in all likely hood make it there in the fall ( oct Nov when our summer here is done.) I like Columbus Ohio very much.. I have never been to Toledo.. Although one of the Aircraft brokers that sold one of my airplanes is located there.
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,,,, 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
Nice to see some conversation with regard to the US market… From my perspective STream line hit it on the head.. returns were advertsed Aussie relied on them they did not materialize and you had upset folks.
From a US Dude what I saw was a huge amount of aussies coming to the US with absolutly no clue as to the Socio demographic of our country.. and just thinking a 20k house would perform like a 100k house.. which as many Aussie learned is not the case…
In addition the Aussie bent to just focus on %cash flow return is a flawed approach in the US.. there is so much more to this market than that.
When I started TWH I had a few Aussie resellers tell me it was the best model they had ever seen for safety and return IE risk reward.. But when I did few presentations I soon realized that the aussie investor just did not understand how we did this..
So some have done well others i fear that bought the cheapest detroit Ghetto property probably lost all their money.
ONe thing I want to be clear on though.. Is it was not all US spuikers where were plenty of Aussie spruiker preying on their brothers and sisters and some if not most were just as bad or worse than any US counter part.. the US spruiker at least was worried bout going to Jail.. the Aussie just ran around defrauding his fellow countrymen with inpunity
Nigel its seems that the Aussies have turned off on buying US properties….. bAsed on the traffic on this site from what it used to be and what it is now.. If we corralated that to purchases in the US I would suspect that bizz for those selling Aussies US property is off by 50 to 80% of what it was a few years back.. Have you seen that in the interest you have for your deals.. or is it still really strong.?
the distinction
for us underwriters of your employemnt would be if your work for the company your an employee if your self employeed and work with he company on a contract basis then your underwriting and qualifing guidelines are different vis a vi a US loan
Streamline I hope you used blue ink
