[BennyteeParticipant@ten_burnerJoin Date: 2006Post Count: 243]

May 4, 2014 - 3:55 am

superAndrew wrote:

I saw a post on this forum not so long ago which was posted in 2006 that is talking about +ve cash flow properties in the US.

https://www.propertyinvesting.com/topic/4385123-usa-positive-cashflow-properties/

This is 2 years before the financial crisis. So the US has been full of +ve cash flow properties for over 8 years now… where are all these +ve cash flow properties coming from?

I am not trying to be negative and I believe that there are +ve cash flow properties in the US but here are some of the reasons that deter me from US property.

People are reporting 30% gross yields in the US. I wonder why the tenants don’t borrow (even at 10% interest) and buy these properties instead of renting. An example I saw was a property that cost $50,000 and was being rented out for $300 per week. Borrowing at 10% would cost the tenant less than $100 per week in interest. 1/3 of the rent. Seems weird to me why they would pay these high rents and not purchase the properties.

I suspect the credit crunch played a largest part post GFC, however I believe it is similar to reasons why people in Australia don’t own property, no deposit, wages are lower, more interested in lifestyle. However I try not to over analysis on a macro level, I have found places in the US where I can safely walk down the street an my property manager is happy to manage them & I get my rent(20% gross)each month.

One reason could be that banks won’t lend to them because they don’t meet their lending criteria. That would be a worry to me. How can they afford $300 rent per week when the bank thinks they can’t afford $100 interest.

Maybe the US banks don’t lend for these properties because of whatever reason they might have. So as an Aussie you will need to borrow locally by using cash or equity (I doubt that Aussie banks will lend to buy US properties).

I only use cash at this point in time, however I believe it is extremely difficult to get mainstream finance on resi property as a foreigner

So essentially you are helping pay off US debt or transferring it to Australia.

Also why would someone sell an investment that pays 30% yield?

The same reason people in Australia sell property.. to realise a gain, retire, death, divorce, perhaps its their investment strategy.

ten_burner wrote:

Dirranbandi has population of 437 people, although it positive cash-flow, in my experience the rent and value will most likely be the same 5 years from now.

That’s 9.2% yield for 5 years. Doesn’t sound too bad to me even though these properties are supposed to be examples only and not investment advice.

That 9.2% gross rental sounds average, once you minus property management fees, rates/ water, the inevitable long term vacancies you get in hick towns. Compounded by the fact of no property growth and the unlikeness of extracting your money back out of it. I suspect in a town that small, you might need a lower LVR so your 20% deposit could be 30% & some lenders might not even touch it full-stop. I suspect your money would be safer in the bank (at least you can get it back)

Just out of curiosity. How much capital and rent growth has there been in the US in the last 5 years?

[/quote]

As a cash-flow investor I don’t monitor property growth as I believe the US is still a cash flow play, however I believe the median house price has risen, see link. http://www.propertywire.com/news/north-america/us-property-sales-prices-201404249047.html

• This reply was modified 9 years, 12 months ago by  Bennytee.
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[BennyteeParticipant@ten_burnerJoin Date: 2006Post Count: 243]

May 2, 2014 - 8:07 pm

EngeloRumora wrote:

Hi superAndrew,

I have been living and buying properties in the US for the past 2 years. The properties that Steve talks about in the first edition of his first book is pretty much whats going on in the US market at the moment.

There are cash cow properties falling off trees. I do believe that investors that already have established and Australian portfolio should consider the US market due to the differences between the 2 markets.

Thanks and have a great day.

ps. The numbers on the links you posted look very decent for Australian investing standards.

Agreed the US is where its at for cash flow, its the stuff you dream about back here in Australia. I have not had a single issue with tenants, rent etc in the US.

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May 2, 2014 - 8:00 pm

superAndrew wrote:

http://www.realestate.com.au/property-house-qld-dirranbandi-116828331

Price: $85,000.00
Rent: $150 per week

Dirranbandi has population of 437 people, although it positive cash-flow, in my experience the rent and value will most likely be the same 5 years from now.

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May 2, 2014 - 7:54 pm

Tony Fleming wrote:

So a 42k deposit to avoid lenders insurance

LMI can be very useful ally if you want to continue to build your portfolio.[/quote]

Agreed, on another note (not trying to be negative) I don’t think I would want to tie up 42K in most of the properties that have been listed, not sure you would get it back easily.

I know its tempting when you see good cash-flow especially in Australia, however I would advise against investing in hick towns (I am generalising) in the middle of no where.

[BennyteeParticipant@ten_burnerJoin Date: 2006Post Count: 243]

April 26, 2014 - 7:29 pm

Hi Engelo,

I was in Kansas city recently I wanted to catch up, but Sean & Dan said you moved to Toledo. I might see you on my next trip.

Good luck with your rehab

• This reply was modified 10 years ago by  Bennytee.
• This reply was modified 10 years ago by  Bennytee.

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April 26, 2014 - 7:22 pm

superAndrew wrote:

Would anyone be interested in an online tool that can find positive cashflow properties (provide you with the address) and identify suburbs/regions that are positive cashflow throughout Australia?

http://www.realestateinvestar.com.au/ they have a similar system to yours, however I think there is room for competition, in my opinion realestateinvestar is over priced at $250 per month for a subscription

[BennyteeParticipant@ten_burnerJoin Date: 2006Post Count: 243]

April 18, 2014 - 2:47 pm

Heinz57 wrote:

Go easy on the Freckle. If he didn’t exist it would be necessary to invent him.

We got along fine without him before he came along, I am sure we will find away to carry on (with heavy hearts lol)

[BennyteeParticipant@ten_burnerJoin Date: 2006Post Count: 243]

April 12, 2014 - 12:30 pm

Hi Guys,

I am flying out today to the US, Kansas City, MO to buy some IPs and add to the couple that my business partner and I have at the moment. Ill keep you posted on what happens, also I am meeting with a bank manager contact (landmark bank) who swears he can set up bank accounts for foreigners without being in the US. I can forward on his details to anyone who needs them.

 

 

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April 11, 2014 - 11:26 am

Freckle wrote:

I thought the last one was bad and barely functional. This one is another level lower again. For a guy who is supposedly a property guru the IT side leaves a lot to be desired.

Thats a lil harsh, compared with what other forum? 1970s looking somersoft.com or the cluttered Australianpropertyforum.com I think it’s better than it’s competitors

• This reply was modified 10 years ago by  Bennytee.

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April 10, 2014 - 11:47 am

http://www.sitepoint.com/forums/misc.php?do=bbcode Trying to figure out bbcoding, predictive text a little annoying

• This reply was modified 10 years ago by  Bennytee.

[BennyteeParticipant@ten_burnerJoin Date: 2006Post Count: 243]

April 10, 2014 - 11:27 am

I don’t mind the new look, good to mix it up a bit

[BennyteeParticipant@ten_burnerJoin Date: 2006Post Count: 243]

April 7, 2014 - 9:34 am

Your user name should be "fast Eddie"

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April 7, 2014 - 9:32 am

bacchu wrote:

In the six weeks there have been a couple of instances when someone has offered considerably less and i did not take it up since i thought i would get others. 

That is the market telling you what the rent should be in your area at the moment, no property manager can fix that. If it has been advertised in RE.com/ domain & the property manager is doing opens I fail to see how another property manager is going to do a better job. If anything it will be vacant longer due to a change over of PM.

Good luck 

[BennyteeParticipant@ten_burnerJoin Date: 2006Post Count: 243]

April 6, 2014 - 4:33 am

Hi Bacchu, what is the market telling you? If it has been advertised for 6 weeks I suspect you will need to drop the rent. What are the vacancy rates in the area? Is this a regional area ? 

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April 5, 2014 - 11:31 am

They great very user friendly account interface an helpful staff if you need to call them, an rates way better than the banks, when you input a quote it shows you the comparable bank rates. 

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March 19, 2014 - 12:24 pm

@Loan ranger, How is the NRAS stuff doing?? With the uncertainty around it at the moment (government reviewing it) you probably cant give it away.

I stand by what I said "it is a fad"

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March 14, 2014 - 3:33 am

@mark

They are over priced when compared with established stock in the same area, jump on RE.com RP data etc, I believe this is due to things like developers premium, marketing costs, agents get higher commission on off the plan (in my experience inner city Sydney agents get 2% when uncon & another 2% at settlement (4%total) for OTP). An area can get an over supply of apartments (think docklands / Canberra atm) due to over development. Rental yields are weaker (hence why some offer rental guarantees). Strata fees are above average (cant figure that one, on a new build you would think less maintenance)

At best it's a strategy for the early phase of a fast moving market as it is totally reliant on market forces going up. 

Maybe as a BA Mark you have access to better deals, however for the average mum & dad investor I would avoid them. 

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March 13, 2014 - 10:06 am

Have you tried a small removal company, they might be cheaper than a traditional freight company.

If you hire a truck an drive it yourself, try an get a friend or family member to follow you there in your car.

typically I don't buy a place that doesn't have a decent hardware store within 30 min of it if I plan to renovate.

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March 13, 2014 - 10:03 am

I saw an article on TV an this guy from Veda said a lot of credit providers don't have the infrastructure in place to do the new checks even if they wanted to at the moment, he said it would take time till they have it in place.

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March 12, 2014 - 10:03 pm

The biggest risk is sitting on the sidelines in my opinion. I'm going to the US next month if you want to come Freckle.