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The 14% return assumes you can get financing on it that is similar to what an American can obtain (ie. <5%, fixed for 30yrs with 20% deposit) but I can't see any way that an Australian can access that type of financing.
Could someone a little less agitated and familiar with US lending help with my query? I don't want someone to tell me it can't be done. I want someone to tell me why it can't be done please.
Prelim. Cheeves says a US permanent resident is unable to obtain the same type of loans as a US citizen. I certainly find that hard to believe – anyone else confirm?
My real question is though why would a US property fully paid for in cash not be permitted to be considered suitable leverage for standard normal current finance (<5% fixed for 30yrs with 20% deposit) another US property? Does anyone know what the banks' reasoning is? I ask because it doesn't make sense to me. Lets say I sign over the title to them on the $100k property free and clear and their valuer tells the bank it could resell for $100k, why would that not be enough for a bank to lend me 80-85% LVR, especially given the current move for banks to resume lending to dodgy borrowers without collateral. The bank is not taking a risk because if I default on my payments they have the right to sell the asset. Seems straightforward to me.
ps what does SDW stand for?
Thanks Joel.
However in the scenario mentioned above the lender would have recourse because property #1 is paid for in cash, owned free and clear and can be used as guarantee. If the borrower defaulted the bank can go after that asset right?
Why only for US citizens? (I think you mean US residents right – US permanent residents should have access to the same financing right?). But I am asking what is the reason that banks will only give high LVRs and good rates to US citizens? You deal with the banks so hopefully you know their reasons?
Or can anyone else in the financial industry shed light?
Thanks Cheeves.
I don't understand why LVR would be different for a non resident, particularly if they can demonstrate equity and serviceability and also given that banks are starting to lend to weak borrowers all over again:
http://blogs.cfed.org/cfed_news_clips/2013/04/did-we-learn-anything-from-the.html
Yes that's what I mean – I pay 100% cash for a US property, say $100k and own it free and clear. I would then be interested in the type of residential loan that any American could obtain. Could you explain:
why LVR couldn't be 80-85%?
what 2yrs of debt means (interest payments for two years ahead??)
why a residential housing loan is not possible and it would have to be commercial
why they won't lend for a Single Family Home
why they won't lend < $500k
Hope you don't mind the questions.
Thanks Cheeves.
To clarify you are saying those loans don't exist for foreigners but they do exist for Americans?
If I purchased property number one with 100% cash down and then used the equity in that to finance property two would i be able to obtain similar terms to what an American can (say 20% down, <5% 30yr fixed-rate) for property number two?
Actually its more like $50k in NZ. Have a look on trademe.co.nz – there's heaps in the regional areas.
Thanks Jamie. I am familiar with some of the regional areas (like Sunshine Coast) and I worked on the mines too but am looking for countries where I can obtain a fixed rate long term loan?
Any suggestions from anyone?
Hello Steve,
Are you still there and investing in Miami?
Wow. How did you get it for $16k off the asking price? And give us the breakdown:
Any reno costs?
Rental income? Vacancy rates?
Property mgt?
Point taken dgirl.
HOWEVER, Steve recently was talking about his experience with Uncle Zally about buying up these types of houses; well at least it sounded like that because UZ was saying he wouldn't enter those areas; so it makes me think he is still at work with this strategy. Obviously the trick is if you can get it property managed remotely…
Stefan
Hi Steve,
How about a market update from you? I've been hearing about a bit of an upswing and was wondering what your experience on the ground currently is? SFH's in your area going up in price? REOs hard to come by etc.?
Stefan
"Location, like in Australia, is key".
I bet Steve would disagree – I understand your point but you would have said the same thing to Steve 13yrs ago and he would have ignored you and bought dodgy houses in dodgy suburbs in Ballarat, Tassie and NZ….
Steve,
By way of comparison with your 3 houses what are your thoughts on investing in apartments on Miami Beach? I imagine you can get them pretty cheap. How many would you get for $300k and what would be the comparable rental returns on them after tax? Also since your strategy is capital growth would you not achieve the same thing with buying multiple units? Or are the body corporate rates too excessive?
Steftriptizehd wrote:I suppose for us the appeal is the opportunities, the relatively low cost of living, tons of cultural diversity, and a sense of adventure.. So far I haven't regretted making the move.Hi Tripti,
I'm from the Sunshine Coast as well and would love to hear your Miami ad(Vice) as well as you go along – how about starting a new thread? I had a look at your linkedin profile and the 5-star website – definately looks like a tough job managing that little piece of luxury!
By the way, absolutely gorgeous weather and perfect surf here in Noosa this past long weekend!!!!
StefBritish Buyer wrote:Hi Fellow ReadersHaving been here for over a year now, I can say I've learnt a hell of a lot about this country, this city, its people, its problems, and even about myself. However, this is not a forum about philosophy or politics, so I shall stick to property.
I'm up for some of your general observations Steve. The context within which you are doing this is significant given the economic state of the US…
Hi Steve,
It's now been over a year since you first posted this excellent thread and I'd love an update on how your thinking/stragey has developed since you first investigated, visited and the returned to live permamently in Miami? An update on your most recent purchase and also whether you have bought any more SFHs on the island (or are you looking into Section 8 homes in the city?Steve,
Thanks very much for all the information in this thread – its fantastic!
I’d very much appreciate if you were able to continue to update us with info on the houses you are currently looking at and your experiences.
Also, could you give some idea of what a) a SFH needing reno work on Miami Beach that you could pick up for $250k would rent for and b) how easy/hard is it to get tenants?
Thanks
