[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 10, 2010 - 7:18 am

Thank you Josh. I really didn't mean to spam. I think this is a great overseas investing forum.
Richard

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 9, 2010 - 9:37 pm

Hi Richard
Are you talking about residential finance or commercial?
Thanks Richard

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 9, 2010 - 10:02 am

Hi Richard
That's great how much documentation is required? I have an ITIN but not an SSN.
Richard

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 7, 2010 - 4:31 pm

The Detroit economy relys heavily on the car industry. I used to work in Automotive Design and have seen over the 12 years that I worked in it, more and more of the work going to China. In my view the major auto manufacturers in Detroit and elsewhere will continue to downsize significantly. I am sure there are better areas in Detroit as well, but unless investors are willing to travel there and research fully, they are in danger of making expensive mistakes. The fact is if you compare the net inward migration figures and unemployement figures of Detroit against any of the big Texas cities, Texas is much stronger and will provide a more stable rental income and long-term capital growth.

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 7, 2010 - 4:10 pm

Hi Chris

I'm sorry I have offended you. I am not intending to spam. I have recently found this website and am just commenting on the threads. If people wish to click on my link then I am giving them the option, if not then they don't.

I am not an expert on Australian tax law and wll leave it to you.
Richard

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 6, 2010 - 8:11 am

I would say keep it simple. Complete a US tax return for your USA activities and an Australian return for your Oz activities and keep the two separate. With the depreciation, deductions and business expenses for the LLC you shouldn't pay any tax in the US anyway.

With regards to getting cash back from the US, I would avoid the ATM card as the charges will work out high. Use a wire transfer or foreign exchange broker.
Richard

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 6, 2010 - 7:59 am

Hi Jess
7% is a pretty good management rate, so if they are doing a good job I would keep them. I think it comes down to if you have the time and tradesman contacts to manage it yourself and you live locally. Also if this is your first property, are you thinking of getting some more? More in one place could work, but if they are geographically apart it my become a bit of a headache.

I think your time to learn and costs involved will work out more than $15 per week. I would spend that time and money researching you next property
Richard

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 6, 2010 - 7:44 am

Josh
Although I do have my property in Niagara Falls, it is not an area I recommend. To be honest my properties in Indianapolis and Texas are much better investments (higher net returns). The property in Niagara is built around 1910 and requires a lot of maintenance. Up until now the tenant who is through Section 8 has been pretty good, but in the last few weeks has stopped paying their rent. The government leased housing has recently reduced their portion of the rent payment and I think the tenant is struggling. The eviction is in the process of happening. My property manager has been fantastic.

When I bought it looked great as I only paid $28,500 and the rent was $500 per month. But after you take out the maintenance and expenses the net is closer to $200 per month and I it needs a new furnace for $2000!

As far as Texas goes it is very stable. My properties require very little maintenance and just tick along each month. Finding tenants was very quick and they have stayed long term.
Richard

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 5, 2010 - 3:15 pm

Can you get finance outside of Florida?

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 5, 2010 - 12:36 pm

I agree with Tony's post above. The amount of deductions you can claim on a US tax return should mean you pay no tax. Claim on all the above and don't forget travel and meal costs if you are visiting properties. If you have a LLC in the US then you can claim business expenses also.

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 5, 2010 - 12:31 pm

Hi Rob

Don't be afraid to change property managers. There is no shortage to choose from and you will find a good one.

Hi Karen,

Stick with good quality markets like Dallas, Austin, Houston and San Antonio and definitely stay away from Buffalo, Detroit and Western New York State.

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 5, 2010 - 11:50 am

Hi Todd

I can recommend the property manager I use for my property in Niagara Falls. They are my third manager, the other 2 being crooks. I have been with them for over 18 months and they are great.

Rosato Management Services Inc.
http://www.rosatomanagement.com

They do charge above average rates per month, but it is worth it.
Richard

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 5, 2010 - 11:39 am

Sorry for the blatant self-promotion, but there's quite a lot of background information on my website.

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 5, 2010 - 11:32 am

You are correct finance is an issue and due diligence is a must. Using your equity is the best option at the moment as it is pretty impossible to get finance in the USA. I was over in LA October last year and the main factor affecting property prices appeared to be the school district. You can use Zillow or other research sites to check out the schools. I would recommend flying over to check out different areas as neighbourhoods vary greatly.

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 5, 2010 - 10:37 am

I think every investor is different in terms of risk tolerance and budget. My personal opinion is that Indianapolis, Dallas, Austin and Houston are very strong markets offering great returns. Both in terms of rental income and capital growth. I believe California is a great market and would make an amazing vacation/second home, but the prices need to come down more before the figures work.
Richard

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 5, 2010 - 10:23 am

Using an LLC is a great way to hold US property. It provides another layer of protection from holding property in your own name. I would also recommend getting landlords insurance with a large amount of liability protection.

Unless you are a US citizen you can't form an S or C Corporation.

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 5, 2010 - 10:13 am

There are better areas to invest in than Buffalo, Rochester and Western New York.

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 5, 2010 - 10:08 am

When you buy investment property, whether in the USA or in your home market, it has to make sense the day you buy it. The only time value is important is when you buy it. What you are really buying is an income stream. My portfolio of USA properties had really good net returns when I bought them and still provide an excellent cash flow each month. I don't really care what my properties are worth as it is the rental income that counts. Any growth in value is just the icing on the cake.

I agree with Nigel that this is a great time to buy and the worst time to buy is when property investment in 'fashionable' and the bubble is about to burst.

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 5, 2010 - 9:52 am

I agree with the above posts. Just because a property is cheap doesn't make it a good deal. My personal preference is Indianapolis, Dallas, Austin and Houston. Of course there are other good areas and bad neighbourhoods within my preferred cities. I would definitely avoid Buffalo, Western New York, Detroit, Ohio and anywhere that looks too good to be true. Most properties in these areas are built around 1900-1920 and need a lot of maintenance.

There are some great deals in the US at the moment with large (2,000 sq. ft) houses, less than 10 years old with double-digit returns in great neighbourhoods for less than $100k.

[rlillycropMember@rlillycropJoin Date: 2010Post Count: 42]

May 5, 2010 - 9:41 am

I think the Atlanta example above is a bit exagerated, however you can get 9-14% net returns or higher in Indianapolis, with most houses being less than 10 years old and range from $50-$90k. Most of these are bank-owned properties and I have contractors that carry out the work to get them rent-ready.

If you want a really safe investment then Dallas, Austin and Houston are very strong areas and should appreciate well over the next few years.

The exchange rate is very favourable for you Aussies at the moment to invest in the USA and at lot of the US is at (or at least near) the bottom in terms of values. Financing is a problem but the situation will get better soon. I was lucky enough to get an ITIN mortgage a couple of years ago.

If you can use an Australian line of credit now to secure some great properties, within a few years you will be able to refinance using US borrowing and pull all your money back out again, while still hanging on to your properties.