I would only consider Detroit if the rental pool had 700 plus fico's Debt to income ratio 30% or so. years on the job and absolutly NO section 8. And in areas were the houses truely cost 100k or better. there are no board ups on the street ext.
JWmwilson,,,, No secret how to buy properties for 2k or less in the US..Virtually any Ghetto area of the mid west upper mid west and some east coast cities will have plently of homes priced like this. There is an area south and east of Chicago in Indiana were there are virtually hundreds of homes that go for next to nothing at Property tax sales. However in my humble opinion buying any of these homes as an arm chair investors is a waste of time and money.. The properties will never perform.. the only possible way to make a profit is to buy them and then flip them to the next newbie or next sucker.
I did 200 plus loans in detroit from 05 to 07 and exited in 08… I ended up with 2 REO's and rehabbed them and sold them to kindly home owners on vendor contracts/ The lovely buyers both defaulted within 6 months and totally trashed the houses. I lost 100k cash on those deals..I would not touch detroit with a ten meter cattle prod personally
Engelo, true of East coast.. however if this gentlemen could set up a company and hire Mexican laborers at 10 bucks an hour he could do well.. Subcontrators in this markert do really well if they can scale their business.. One of our plasters ( I assume this is dry wall) here in oregon has over 400 mexicans working for him and makes boat load of money
Texas in my mind is a market that just stays neutral.. IE properties sell for build cost plus some profit for the builder and then just stay there… There is just no arguing the fact that those that bought ATlanta ( like we did) when houses were 25 to 40k did well. AS well as Vegas at 50k AZ same CA same.. Texas if you bought a few years ago the prices never really fell but they don't rise either.. Texas in my mind is a very long term pay it off then you have equity.. These other markets have equity by capital growth.
here in is the language barrier between the states an OZ I have no clue as to what this post says… And I have 35 years in the bizz.. I can only imagine how OZ investors get confused with US coloquial terminaligy
Frekeles this is a graph of the stock market which does not really track the RE market.. Pull up Cupertino CA. Palo Alto CA SF CA Los Altos CA Saratoga CA Los Gatos CA.. this is were I was born an raised..
Since Overseas deals threads have died maybe we can get something going here… couple points…Interest rates really don't affect Foriegn buyers because most cannot get a loan from a US institution for IP period. One can hope and try but far and few between nation wide… At least in the types of properties we are talking about 50 to 100k SFR rental houses. US citizens have a hard time still… There are vendor financing programs that some of the bigger turn key guys provide…. However one thing that we need to point out is that most of the Cash flow investing has been East of the Mississippi river.. with AZ and NV being the exceptions.. And maybe a little CA. The East of the MS river offers the higher returns, however has the higher risk with sociodemographics that can delude investors.. Just think Detroit….. Then you can come to a market like were I live Portland Oregon.. We have NO Au investors at least I have never heard of one. But we do have lots of Chinese and Indian engineers that work for Intel or Nike. And our rental market here is a 5 to 7% positive geared market all day long.. but never higher.. And other than San Jose CA. read Silicon Valley the strongest rental market in the entire US… less than 1% vacancies and the rent gets paid with no major drama… And our market has gone up in the last year like the rest of the US by 10% or so… I am not advocating Portland Or. but I wanted to point out that virtually every market in the US is positive geared.. Save SF pennisula NEW York and many areas of LA.. the rest of the country will give you positive cash flow. The it comes down to how easy is the property to keep rented and quality of tenants long term… this is were the west coast out shines the east coast and mid west all day long… But again who could argue with buying a home in Atlanta for 60k that rents for 800. a month… The Portland Market is Oh 125k for the cheapest homes that rent for maybe 900. to 1000.. then the average rental will be 175 to 275k and will rent 1200 to 1500.. The difference is your running cost will be minimal as the tenant base here is as noted above one the best in the entire US, one just needs to check out the demographic mix to understand this. And with employers like Intel, Fujitsu, Nike, Techtronix, Addidas, Boeing, Genetech, Facebook, and all the lumber companies you have a pretty solid upper middle class base of employment as opossed to a more transient blue color work force. The above are just general statements for one to consider… On another note I was reading about some huge OIL find in AU that is suppose to be bigger than all of Saudi Arabian oil reserves is this true or just internet hyperbole?
GG 22 Yes in fact many many US home owners have been living in their homes for many years without making any payment… I Vegas there are attorneys for 1,000 bucks or so that can keep you in a house for 2 to 3 years. The amazing thing is the attitude of those that are in the houses like you have expressed… Its like it thier right and screw the lender… Well being a lender thats not an attitude that we like…. However those same folks will have no problem renting, Landlords and property managers over look anyone who had a foreclosure and they actually think them to be good risks because if they don't pay they would then be homeless.. Not to mention most of these folks have good income. Welcome to the foreclosure mess… The reality was that there were millions of them and the banks just could not deal with them all.. And yes if the loans got sold repeadily in the secondary market it can take forever for the new investors who bought the mortgages to catch up with the defautl.. REally depends on the state though… If these are mortgage states these take much longer.. Like New York it can take 3 years to foreclose in the normal course of business.. FLA 1 to 2 years.. If Its a Deed of Trust state Like Georgia CA etc those can go as quick as 3 to 8 months. It does give those of us who have paid all their mortgages on time pause… Here you have these people living for free and you have others that care about their credit etc who ground through the hard times and kept everything current ( that would be me)
Freckle I read that article today as well… And when the hedge funds moved in and bounced the smaller investors out and the small to mid turn key operator out of the market in ATL. SoCAL. Vegas PHX etc.. I for one was at the court house steps watching these companies and their minions bid on properties and having been in this bizz basically all my life I was somewhat skeptical how they could maintain that velocity,,,,As these homes are scattered all over the markets so you just have logistical issues .. Its not like buying a 250 unit apartment that is sitting on one square block buy 250 homes and they will be scattered over 40 or 50 square miles… Hard to get efficanies either as the homes are all different and need different rehab scopes. My thought would be the big boys would buy them,,, They did and now they don't know quite what to do with them. They can't sell up as they are the top of the food chain… So they may bed forced to sell down if they want to exit… So the next wave of opportunity could be Hedge fund bail outs they cut and run… Prices won't be like banks that hemorraged and were forced to cut prices way below reason.. Hedge funds are not under any government mandate to balance their portfolios.. But they will look at lost opportunites I would think… So anyone guess where this all goes… We did very well in atlanta and have our other portfolios being prepped for sale, I would think we are 12 ro 36 months from a complete liquidation. In addition I think the foreclosure business is changed almost forever.. So many homes bought for cash and or if they are US buyers rates in the 3 to 5% range you will not see those homes being lost… There is no subprime anymore and that was the bulk of your OREO inventory at the end of the day…What I predict you will see is TAX SALES especially in markets were the rental game is a really tough one IE any of the real rough parts of any big Mid western or East coast city that were hammered by the less than forthright turn key guys.. I think you call them spruiekers… all those homes sold for cash to these folks they will get tired of the money pits walk away and the properties will be sold at tax auction because there is no bank debt to foreclose.. I see a huge up tick in TAx sales in the next 5 to 10 years.
Ryan, I am impressed with your knowledge of "The City" thats what us Northern Californians call it….The Tenderloin brings back memories of the precursor to Homeless folks we called then Wino's or Hobo's in the day…. There is rent control in SF,, Berkely across the bay is well known for rent control. I would think the SF penninsula is most like AU high end properties… I bought my first house in Palo Alto for 186k in 1984 and sold it in 89 for 450k and thought I was going to retire it was only 900 sq ft 3bd 1 bath little rancher… Well my home just sold a few months back for 1.5 mil now they did add 400 sq ft to it and updated the kitchen… With HIgh tech jobs from SF to Silicon valley the penninsula only saw modest drops in values in the worse times and has bounced back in the last 2 years… I will be down in the Napa valley next week… I lived there for 10 years in my ever it to be humble opinion Napa Valley is one of the best places to live in the entire US, nice mix of culture, country, wineries and world class dinning. Yet only 45 mintues to the City and the sports and other big venues.
SF is one of the best rental markets in the world period. I am born and raised there. I would venture to guess you did not buy this Pacific Heights condo for anything under 400 to 800k US you just happened to have a tenant with money or means to collect on the rent that he paid why he was not in the unit.. your experinces are not normal for the US period
We are selling however I do not buy the house is falling down… too many properties have been bought with cash and or ultra low interest rates IE 2.75 to 4%…Millions of homes have been refied or purchased with these rates, and millions of homes have been bought with cash. In my mind the crash was created by over leverage and sub prime rates. IE rates in the 9 to 12% range these being home owners and most of them not very educated about finances.. Remember there was a whole culture of americans that bought homes that really should never have.. so many americans make buy decisions based on " what does it cost a month" without any forthought of an adjustable mortgage rate or the interest rate at all.
your probably talking about JP him and I have been on panels together solid guy…. he sells his paper to an insurance company so its private paper with certain underlying guide lines. he also has a 30 year product FYI…I highly endorse JP. In my ever it to be humble opinion you will see rise in the hot markets… AZ FLA CA OR WA NV ( las Vegas not Reno) Atlanta,, alittle bit in some of the better mid west markets…
thanks Ziv As I state I do not know these folks,, however I have had a lot of experince in Detroit and it was all PRE Truewholesale houses.. My company was one of the largest hardmoney lenders in the MId US for many years. I was funding 2 to 3 million a month…When I was left holding the bag in detroit I lost significant money,…. Here is what I do know……………For a company to attract the attention of the fed and or state authroities there has to be numeous complaints with back up documentation. Other than that I have no imperical data about this
Engelo sound like private money lender… as they are targeting areas state and federal lenders are not allow to target areas.. Its called Red lining another words they wont lend in the hood…. Clinton came out with this legislation in the mid 90 called CRA this is what forced lenders to lend in areas heretofore they would not lend in because they knew it was a foreclosure cluster. So now private lenders will only lend in certain areas… State and federal banks are obligated to lend in all area however they have changed Underwriting to make it all but impossible to get loans in the ares the banks do not want to lend… SO IE if you make 100k a year and want to live in the hood you can get a loan You make 20k a year have crappy credit and want to live in the hood your not getting a loan.
Did you buy B or C class multi… 10% gross will come out to 2 or 3% net… or worse depending on how much you need to feed this beast.. would be nice to get some imperical data from someone without any puffing and or sales pitch… what part of the US and or big city.. YOur experinces could be very benefical to the readers on this forum if you choose to impart actual data and experinces,
Z Highly doubt any US tenants will commit the ritual of Hari Kari over a US rental LOL…Matter of fact I would suggest that 95% of US tenats have never heard of this or even know the slightest about Japanese customs and rituals. I had one tenant in the south east ask if we spoke English in Oregon true story…. I digress. US market rebounding those that got in at the bottom are smiling right now.. still great buys historically like Nigel suggests.. Just be cautious….. My primary business partner is married to a Japanese lady and their family are major developers in Tokyo their company is traded front page of the Japanese stock exchange which is a big deal also major developers in Singapore they have had their eye on West coast US properties at 7% returns.
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