Forum Replies Created
HI Stuey,
What is your reason for purchasing in Tampa Bay? Are you a first time investor? just interested in what your investment goals are
Jeff
Runway wrote:I've been following this forum for quite some time now and have finally decided to post some observations with relation to the current US property market.A simple search on the internet shows there is no end of Australian property spruikers who claim there are endless opportunities in investing in the United States. Likewise, there are also thousands of websites on the internet that are warning investors not to invest there for several reasons. Some of these reasons include; poor rental returns, investing in poor areas, buying overvalued properties etc.
I'm new to investing and I'm currently restructing my finances so I can invest in the United States. I'm not the most savvy investor on the planet but I do believe in good old fashion common sense.
Here are my observations as follows;
Warnings about one-stop-shop property spruikers:
Consumer alert websites are currently advising to watch out for those Australian companies that offer a full service for US property market investing. These are the type of companies that provide legal and financial advice as well as act as buyers advocates in the US. Being careful about using these type of companies is a no brainer. However, my view is that if I pay a one-stop-shop company a fee to do everything and still get the return I want then it's a win-win situation for both parties.I've currently engaged such a company and they've been very up front with all the fees I need to pay. As a result, I've factored in these fees and determined that I should still be able to meet my financial goals long term. The only warning I will abide by is when they offer both the legal work and finance lending as well. I'm more than happy to take on financial advice but I will only go to a reputable lender (such as a bank) for money. I will also never let a company do my legal work. I'll only trust my personal lawyer which should be a reasonable expectation on the company's behalf.
Warnings about 'not seeing the property':
There is certainly a danger about buying something you haven't seen. However, my view is that a person has two choices. They can either jump on a plane and go see the property for themselves. Or, they can do their own research from the comforts of their home computer and find out if a property is worth investing in. I've recently found that Zillow.com has more than enough information to satisfy my information needs about a property. Furthermore there is also Wikipedia and Google Maps (for street view) if I want to know more about a particular area. My point here is that I'm not convinced that there is a logical need to jump on a plane and waste one's time to visit a place before committing to something. With enough on-line research there should'nt be a need to personally view a place. I could be wrong here and would be interested in hearing the thoughts of others.Warnings about 'overvalued' property:
Again, Zillow.com has all the historical information one needs about a particular property. If a property was worth 200K in 2006 but is only worth 80K in December 2010 then something suggests the property may be worth buying. Straight away this sort of information tells me that the property is severely undervalued and has potential long term growth. When the US market stabilizes then there should be no reason why the property should'nt be worth more than its current undervalued price.Warnings about buying in 'bad neighborhoods'
There are some classic consumer warnings about Australian investors buying properties in poor neighborhoods after receiving some poor advice from spruikers. My view is that if an investor is buying in an area that has high unemployment then they should'nt be too upset if their property doesn't receive the returns they were initially after. Last year, consumer alert websites referred to investors who spent little money on buying properties in Detroit. I've personally never been there but I know enough about Detroit to know that it's like a warzone in some areas. My point is that a property must pass the common sense test before an investor should commit themselves. My research has led me to only invest in four states, and very specific suburbs, in the entire continental USA.At the end of the day, I'm just a 32 year old investor who wants to learn more about overseas property investing. Last month I was completely disillusioned with the whole issue but now I feel I've got a handle on the topic after talking to a number of experts and reading websites like this one.
I would be interested in hearing others thoughts about potential scams and 'over-hyped' consumer alert websites too. I just feel that the current US market is simply a too good of an opportunity to let go. Yet, I'm being constantly bombarded by people who advise me to do nothing and just focus on the market here in Australia.
Thoughts?
Regards,
Runway.
Runway,
I like your attitude as it shows that you are willing to have a go. You do make some valid points. I am investing in the USA, I did go to one of the many companies that advise were you should invest and to be honest I was not impressed. I have lived in the USA, done business there, have family there, so I feel that I have an affinity, I have invested in the Sydney property market and do hold property in some very expensive area’s in Sydney, however the notion of positive cash flow is a pipe dream re the property market in Australia unless you want to spend 750K in WA and then you will get maybe a 10% RIO.
I have spent over 6 months researching the US market, subscribing to realtyrtac, I have hooked up with some switched on guys in upstate NY that know there market I am receiving 25% ROI nett, and as soon as I sell some property here I will be investing more money in the USA, there are opportunities however there are many so called spruikers who have NVER invested in property and are giving advise to first time buyers, I do get concerned.
One needs to do there own diligence.
If you want some advise my email address isJeff
James2118 wrote:Is anyone able to help me with a query I have. I am just trying to work out the structure and have a couple things I am not sure about, I have looked around the internet but sometimes that just provides too much information and you end up losing track of where you started.I and a couple friends have decided to invest in some US property, we are going to put our money together in an LLC, I realise there are probably other ways it can be done, but this seems to suit our needs best.
1) Is it best to have the LLC set up in the US or home in Australia. There is potential that my group of friends would want to invest in other things other than US Property hence why we thought about setting it up over here. But we are not sure how easy it would be to get property in the US. Also as we plan to use it as rental income, assuming the rent would be addressed to the LLC, maybe it would be best if it was based in the US.
2) Once we get the LLC set up, I assume a next step would be to set up some bank accounts, an AUS one and a US one, that are linked in the LLC's name so we could transfer funds between them relatively easily. I am trying to find out currently which bank I can find that can do this sort of service with the minimum amount of fees and charges, Citibank seemed alright so far, I believe HSBC is a possibility too. If anyone else has a recommendation or some extra information that would be great.
3) Finally, paying tax, if the LLC was set up in Australia, would we have to pay Tax in USA? If the LLC was based in USA I can understand paying the tax, but am not sure how it would work if it was based in Australia. Also, if the LLC was based in USA, do we pay tax over there by filling in a tax return on behalf of the LLC in the USA, and then an individual tax return in Aus, with the added income, using the foreign tax offset so you do not get taxed twice.
If anyone had some information out there, that would be really appreciated. Thanks
James
Hi James,
Your best advise should be with an accountant that has knowledge on US tax laws, company structures that suit your investment needs.
I am investing in the USA and would be willing to give you 2 accountants that you would find helpful.
My email adress is [email protected]
Jeff
Miniman wrote:On the subject of HOA fees be wary. Some suburbs with high foreclosures and vacancies are charging existing owners more to make up for lack of regular owners all paying what they normally would.The whole area of HOA fees is not really understood here in Australia. You can be asked by the HOA to make a contribution to lets say a broken elevator which they might ask $5000 from each unit owner, if you don’t come up with the money they HOA could force you into s eliing situation. Each time any repairs are done you have to contribute, it is like the strata here.
This is why for me ,I will not be investing in any condo any where no mater how cheap it is to purchase.
I am investing in duplexes, triplexes and single family homes. NO HOA
Jeff
Minimum,
Excellent email. I was in Orlando myself in January of this year and I did see a lot of homes & condo’s for sale, all looked good on the outside, on closer examination many were in a damaged condition. Prices were very low, but upon returning to Australia I did a lot of research into the Florida market, I found that the vacancy rates were just to hight to take the risk. Also the condo market in places lie Miami again seem attractive but when I thought about the HOA fees and did some more research into the ramifications of being tied to a condo that if vacant I get no RENT, and the otherside of the coin, you can be asked to contribute many thousands of dollars for repairs on the building, which you dont have any say in. If you dont comply with the HOA then in a worst case scenario they could force you to sell your condo to pay for outstanding fees owed.
I have found an area that Ihave invested in that is mainly duplexe’s, triplex’s and single family homes with average ROI of 20% all tenanted and rehabed.
if anyone wants any info on these area’s my email is
Jeff
onthemoney wrote:These guys can assist you http://www.888usrealestate.com.au/Zac,
I can only advise you to be careful dealing with 888 wealth.
Most Americans that have lost there homes there credit score is at a point that the banks will NOT lend them finance, so they cannot afford to purchase , they can however afford to rent, as this is the only option open to them, people have to live some were.
If this jenman character went onto Zillow he would see the mortgage calculator which does not show interest rates at half a percent but as Andrew 303 pointed out. These are what Americans are paying for.
Jeff
Zac Sparrows wrote:The more I read and research on investing in the U.S, the more I feel I need to know in regards to their tax system especially for foreign investors (Australia).
I would like to find an accountant who knows the process, tax structures and all the legalities involved in entering this market to help me in my endeavours.
Ideally in North QLD but I know that would be asking a lot, any suggestions/recommendations?Hi Zac,
I can help you in regards to US Tax accountants based here in Australia, they are in Sydney were I live, if you want theer info you can email me at
[email protected]Jeff
Interesting comments, I have to say that to go over to the USA and spend time looking at endless properties that is at the mercy of real estate agents that you don’t really know is to me madness.
I have personaly lived in the USA and have friends that are property developers that live in Florida, they showed me so many properties that one was dazzled by what was on offer, that was in January of this year. I was very tempted to purchase, however when I started to do some serious research on vacancy rates and other criteria I decided not to go the Florida route. You need to do more than DD becuase the USA is such a huge market.
I did get in touch with a company here to see what they were selling and again they made it seem so easy, the cities that they were offering again upon research didn’t stack up.
I have invested in property in Sydney for many years and recently invested in the USA I have partnered with some people in the USA that are very switched on know there market. I would reccomend one looks at there operation.
If you wanted to make contact with me to have a chat then I can be contacted at [email protected]
Jeff
AnthonyDR wrote:I am seriously considering investing in the USA to purchase for the main aim of obtaining high yield of at least 20%+ net. I believe it is obtainable and even better than this. Many such as Steve McNight, Robert Kiyosaki, Dolf De Roos, etc have all obtained this.The US state I have come to the conclusion would be best to invest mainly due to the good demographics, high yields, excellent job prospects and possible future capital growth would be Florida. Another key issue is that it is easier to obtain finance in Florida compared to many other states.
The reason I choose multiunit complexes is that they obtain higher yields and the banks are are offloading their REO’s of mulitunits at cheaper prices by the unit than single family homes.
The only things holding me back at the moment are;
1. which entity to set up ownership to obtain finance as well as protecting me against being sued.
2. where to obtain finance for such projects,
3. where to find a good refurb and property management company
4. which real estate or REO agent that can obtain these types of deals.If anyone in the forum can give any advice/recommendation I would most appreciate it.
Thanks in advance.
Anthony
Hi Anthony,
I attended a Dolf De Roos seminar last Sunday in Sydney, it was the first time I have seen Dolf and while I was impressed with his style there was a lot that left me thinking I would be skeptical in using his enterprise to purchase a US property, despite the glowing reports that he said and he is promoting Phoenix Arizona as the place to invest.
You can pay $12000 and spend 5 days running arround Phoenix with an supplied ipad and in a week you will be investing like a pro
I have been investing in residental property for many years and it take s more than 5 days to learn how to invest, I am investing in the USA, but working with people that are giving you ROI up to 25% with tenants in place.
Would iIinvest in Florida, depends on were, more likely i would not because there are so many people promoting Florida as the place to go
It all depends on your goals capital growth V cash flow.
If you are interested I can give you the names of a couple of accountants that have the knowledge re US tax and Aussi tax implications.
I don’t give there name out on this forum for obvious reasons. If you would like to make contact
Jeff
weathjess wrote:Hi All,
I literally spent all of yesterday reading this topic from start to finish – FASCINATING!!!I am planning a trip to the US in April with the hope of buying a couple of properties myself and a couple through a SMSF.
What are people's thoughts on Atlantic City……….prices seem really good, but looking at the future – I see that they are a tourist spot with casinos etc, on the water – but as the crow flies only about a 100kms to Philadelphia and 300kms to New York.
Looking at Trulia there are a number of bottom of the market houses that have been listed for 180 days or more (in all parts of the US) – what are people's thoughts on why this is? Is it potentially falling down or in a really bad area?
Also – there has been some discussion on here regarding the taxes that are needed to be paid in the US – however, when you then transfer that money into an Aussie bank account does anyone know whether that money then gets taxed again?? Conscious of the trouble that Paul Hogan had recently with disputes over where the taxes needed to be paid. Or are people keeping the money in the US and not bringing it home?
cheers,
JessieHi Jessie,
you really need to do some serious research, there are area’s in the USA that you would not purchase in. Reason is vacancy rates…unemployment figures, economoic factors…etc
If a house has spent 180 days on the market I would not be purchasing a property like that as you would need to have a building inspection done and then you would need to find rehab people…it is a lot of work.
Re taxation issue you need to speak with a tax accountant that has US knowledge as well as Australian knowledge because you do pay tax in the country you earn that income however you need to have the correct structure in place before you purchase.
I am involved in purchasing property I could give you the names of a couple of accountants who could advise you.
My email adress is
Jeff
Zita wrote:jeff2investUSA wrote:Hi Bevk, I think I may have emailed you before, I am investing in the USA and I sought advise from a US tax accountant that is based in Sydney, he is also an accountant familiar with Aussi tax laws as well, he advised me to set up a LLC for tax reasons, I needed to get an EIN to be able to open a bank account. I noticed on another forum that you were looking at Las Vegas to invest, all I can say id be careful because of the high vacancy rates there. You will be able to purchase a property real cheap, but will you find a tenant.Hi Jeff,
Can you please provide us with your Tax Accountants details. Like Bev said, it's so ahrd to sift through all the information and dechipher the best moves, a infustry professional may be a good option.
Many thanks,
Zita
Hi Zita,
My email adress is [email protected]
I would prefer to give you the name not via the forum as my accountant may not appreciate his name being disclosed via a public forum
Thanks
Jeff
Stuart,
It can be confusing, from what my accountant has told me, that you can claim deductions in the USA , so when you pay your tx in the USA that is when your accountant claims the deductions
The rental income is taxed in the USA you can earn foreign tax credits because you payed tax in the USA, I have set up a business called investusatoday, we do advise locals on the inns and outs of investing.
My email adress is [email protected]
Hi Bevk,
I think I may have emailed you before, I am investing in the USA and I sought advise from a US tax accountant that is based in Sydney, he is also an accountant familiar with Aussi tax laws as well, he advised me to set up a LLC for tax reasons, I needed to get an EIN to be able to open a bank account.
I noticed on another forum that you were looking at Las Vegas to invest, all I can say id be careful because of the high vacancy rates there.
You will be able to purchase a property real cheap, but will you find a tenant.
