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May 9, 2012 - 11:00 am

jayhinrichs wrote:

Alex, I think this is a really good point about you exiting the Management business. And demonstrates to the OZ investor that property management unlike in OZ is a very tough business to make sense financially for the PM company,,, Ton's of work very thankless in a lot of instances putting up with hard to manage tenants and owners that were sold one story and then reality hits. Take WI… If WI has to fly all the way from OZ a couple times a year just to try to keep management in check, how do you not justify adding those expenses into your running costs, and thereby getting to a true net number….And I have owned properties in Douglasville and flown my own aircraft into the local airport there… this is not a garden spot anyone would choose to go visit.. its work its protecting your investment. I have yet to see one OZ investor or investment company include all the ancillary costs that are associated with a foreign purchase plus their personal time and cost to come look and pick something out. Also WI bought newly renovated houses from what I remember in the last year and now WI is talking about maintenance costs, so what WI is experiencing is reality,,, and goes to why I get a little miffed at say the guy from Detroit who just posted last week talking about fresh Reno's and sec 8 with no vacancy etc etc… No such thing exist. And if you and Kevin and your whole staff decide there's no money in PM and your pretty much the mac daddy there in Charlotte,,,please need to read the tea leaves… rental returns in the US directly relate to risk period. 10% or higher, risks are that much higher 15 or more and risks can get very high, 20% rates of return in the lowest end US cities and risk is astronomical over the life of an investment… One the main factors is who every you started with will not be in business 2 to 3 years down the line… And its during that transition time that investors get clobbered,,, I know that one first hand. Our economy is changing for the better no matter what the stats say… So what is a guy like Alex going to do beat his head against the wall to make a 70 dollar a month management fee, or use half the energy to rehab a higher end retail product or build ground up and make 20 to 50k per deal, he does not own any of the houses he manages and neither does any other PM… A PM can just exit when they want nothing says they have to stay in business. And owner cannot exit..

HI Jay

This is my second visit to Atlanta. I do not see any need for me to fly over again for quite some time, however as it is tax free visit I may decide to pop over again and combine this with a trip to NY. The flight is a killer though, business class next time for sure.

It would be totally foolish for any investor not to consider maintenance costs when purchasing properties whether in US or Australia. Just part of the business, no one gets a free ride here.

For me personally one way of mitigating this risk is to purchase newer construction and purchase properties with a minimum of 20% GROSS. 

On a positive note – the drop in recent county assessments are helping pump up the returns nicely, I will take the money and run.

Cheers, WI

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May 7, 2012 - 10:21 am

Alex SC wrote:

worldinvestor wrote:

I was hoping you would provide an overview on Atlanta?

Cheers, WI

We just sold 4 of our 6 remaining properties in Atlanta higher then what I would have imagined. From a local buyer said he can not get anything. Then got a call from Agent in Atlanta for a short sale that went in Nov 11 . The bank just accepted  it oh 19k …

I do predict that Atlanta = Dallas in the next few months and possible years. I think the attractions is heading that way. As for my Charlotte I see now all Major USA resellers are here now.

I just don"t see the values every getting that low like they were in Atlanta . Man if they did I sure would be happy.

Hope all is well.

Hi Alex

that is very good news. Have been reading your posts been busy, am in Atlanta at the moment.
You need nerves of steel to drive on these roads. Anyway, have been checking out all my properties, looking at a couple of rehabs and taking care of the business side of things, catching up with lawyer and opening up another bank account. Only here for 8 days, no time for fun at the moment. 24 hour flight, still trying to get over that one.

You asked how property management is going in one of your posts….. that is a difficult one, I will say I am working on this. I believe the property management company I am using is reasonable, however I need to tweek a few things.

I am over and out at the moment, don't think I will be buying anymore properties in Atlanta as not finding any decent properties  at 20% gross, I think those days are over. Last time I was in Atlanta 12 months ago, there were foreclosure signs everyone, I am amazed that this is now not the case.

I see the Aus $ is starting to fall back, just watching this,  my plan is to leave rental income in US, however will be interesting to see whether the Aus $ actually falls below US$. May be a good opportunity to start bringing the money back home. That will sure help mitigate some of those maintenance bills….

http://s1178.photobucket.com/albums/x374/selectamericanhomes/Flat%20Willow%20Renovated/?albumview=slideshow
Just got these photos, one of my rehabs. This is a nice subdivision in Douglasville.

Cheers WI

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May 3, 2012 - 9:50 am

thanks everyone.

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May 3, 2012 - 7:08 am

I was hoping you would provide an overview on Atlanta?

Cheers, WI

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April 29, 2012 - 12:06 pm

Hi Luke

I agree  Mt Lawley and inner city areas will always do well.

As far as the property you posted it may have taken 5 minutes to find, however it may take many properties to find a suitable development site where the figures stack up.  R50 does not mean you will achieve even 3 on the site, perhaps only 1.

A 4/3 unit site in Mt Lawley at this price would not have hit the market. I live in the area I can tell you there are cashed up builders just waiting for suitable sites.

Ninder, I like Areas close to the city which do not have the same price tag as blue chip area, but provide great opportunties to add value, Koondoola is another area I think with great potential.

I purchased a couple of properties in Westminister when it was really on the nose about 8 years ago, no one would touch the area, turned out to be one of the best investments I made as I was able to develop the properties. 

Cheers, WI
 

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April 29, 2012 - 7:01 am

Luke86
Hotspotting does not necessarily mean speculative to me.

For example look at areas where rezoning is on the agenda.
Craigie is looking good, older homes, good infrastructure where you can pick up properties under $400K.  Check out realestate com, you will note that houses appear to be snapped relatively quickly, good sign in this market.
Mirrabooka, Koondoola these are areas which Council is currently re-zoning, close to city, good infrastructure, ticks many boxes.

Try purchasing an old run down home on duplex block in Mt Lawley will set you back $1.1M at least, as an investor you will need deep pockets to hold this type of property. However, in saying this, I believe the blue chip areas do represent great buying at the moment as most have dropped backed. Good time perhaps to upgrade your principal property.

heers, WI

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April 28, 2012 - 1:01 am

lawsjs wrote:

On the contrary, I would run a mile from any company offering 'finance'. The only realistic finance you will get in subprime areas is from hard money lenders and I would suggest the 'majority' of the financed amount is profit for the company itself and little to do with the actual property. The more 'products' they offer, the more opportunity they have for excessive profiteering. If you are buying an LLC, it IS a flip. Make sure you are comfortable with the money the company is making from you. You will (and I mean will) be paying more than you need to, so be certain you want to do that. I would also be deeply suspicious of any Australian company offering property management. Rental guarantees, guarantee nothing but would suggest to me that you have provided the company you bought through with enough profit to pay you a rental amount from the purchase price itself.

Lawsj, My thoughts exactly,
I was recently offered finance again, what I see is just another layer of expenses, outrageous fees and risk that will sink the average investor.

Decan, I presume Citi Bank is the lender

Cheers, WI

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April 23, 2012 - 3:04 am

Hi Kristinedogz
I assume you would be passing on papers to your accountant in Oz?
Also, have you considered the currency and how this will effect your return bringing the money back to OZ, this is important.

Cheers WI

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April 22, 2012 - 8:33 am

kristinedogz wrote:

Thanks for your reply.
Yes, I am more concerend about the tax I will pay. I do my own tax every year with the Tax Pack and I am wondering if once I sell my investment property if I should use a account that year, cause it may be a bit tricky or maybe at the end of the day we still have to pay tax on it any way so maybe I dont need a accountant. What are your thoughts. Have you sold a investment property in NZ before?

I recently sold an investment property in NZ, this was a flip, you do not pay capital gains tax in NZ and you also do not pay stamp duty. Seems the government in NZ is generous as opposed to Oz.
Any profits made however is added to income in Australia. I distribute profits as I purchase in a trust.
You should obviously chat to your accountant about this.

Cheers, WI

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April 16, 2012 - 1:24 am

Atlanta is getting flooded with investors, as the prices are rising with over bidding. Every USA investor group especially from west coast is buying in Atlanta or from turnkey investors their. So they same groups that are buying from turnkey guys like me are reselling to International clients. I am no longer in Atlanta still stuck with 5 or 6 houses looking at dumping. Now from some one like your sister who seems to be buying direct. Has she purchased any thing their yet. Curious to see what she is able to grab in that market. Still good deals just depends on price range your willing to pay. Notice investors are now justifying stepping and buying  further away from the city( to make numbers make sense ).  Only time will tell if Atlanta or any of the investment markets hold up to supply and demand + rental demand  here in the USA

This is pushing the prices north at the moment, but will it be sustainable?

I am getting mixed messages from people on the ground, some say owner occupiers have jumped into the market, I think Jay has mentioned this too, if so then hopefully we will see signs of stability in this market and slow increases, otherwise it will be a rollercoaster ride and more opportunites to buy gems.

Cheers,
WI

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April 15, 2012 - 8:36 am

waydo77 wrote:

looking at renting my coastal property in south aus, what is the best and most accurate way to find out holiday vacancy rates? cheers

That's easy look at usual holiday periods, this will be time when holiday homes are in demand:

Xmas
Easter
School holidays

We have a beach house which we now rent.

Also, for those considering renting during peak holiday periods and expect to achieve high returns the property must be very well presented, in other words, reasonable furniture which is in good condition,…. they expect the property to be fully equipped – BBQ, DVD players…… the list goes on. Has to be a good package, as this is what the competition will have.

Cheers
WI

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April 14, 2012 - 5:20 am

http://www.zillow.com/homedetails/3154-Chippewa-Dr-Rex-GA-30273/35761249_zpid/

Looking at your example – 3154 Chippewa Dr Rex  –  last sale $28,000, refer to zillow above

Sale price of $52,000 that equates to approx $40 per sq ft.

The age of the property 1986, small home at approx 1200 sq ft.  Too old and paying too much, also Rex is not a great area.
 
If you can purchase newer construction in good subdivisions at around 20-30 ft per sq ft its a no brainer.

Unfortunately these are typical properties that the average Oz investor is buying and these will be the properties that will be flipped down the track to another investor because they are lemons.

Do a search on Atlanta and also check out Somersoft forum topic on US  there is plenty of information. 

I will pm you some info.

Cheers WI
http://www.wheredopuppiescomefrom.com.au/the-puppy-mill-a-new-australian-documentary/

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April 13, 2012 - 1:13 pm

Hi Cashunter

interesting, when I was in Atlanta 12 months ago I attended an Atlanta investor group meeting, it was a full house,  these were  the local investors, builders, realtors, flippers, contractors,  – great insight on what the locals are doing and their experience in the Atlanta foreclosure market.

One of the reps from this group (Key property realty) was  chairing that evening (Robbie) can not recall his surname.
 
Had an opportunity to view their properties etc. and discuss their services.

My thoughts  – At the time most of their properties did not fit my criteria, too old, too small, too expensive?

Do not waste your time and money on spin, check out what they have to offer and make sure you have details on properties so you can research the area, rental income, comparables, county fees etc. It would be great if someone could post an address of a potential proeprty…..which seems to be a huge issue…. don't know why????

I checked out their site,  they have no listings to view??

Will email contact details for Wells Fargo.

Cheers
WI
WI
http://www.thepetitionsite.com/2/save-our-animals-ban-puppy-mills-in-aus/#13335909479711&action=udata&udata=false

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April 13, 2012 - 4:34 am

Kimberly wrote:

I'm looking at going wit Citibank based on personal recommendation.

However my question is whether or not anyone has been able to setup a bank account without physically being in USA?

Thanks, Kim

I have set up Bank Accounts from Australia, first time got my lawyer to do this, charged about $200, then set up all my other accounts as I had an email address for the bank manager and just emailed details and they were able to access further info from my lawyer.

BTW, all my bank accounts are in Atlanta.

Cheers
WI
http://www.wheredopuppiescomefrom.com.au/the-puppy-mill-a-new-australian-documentary/

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April 13, 2012 - 4:16 am

kylermrice wrote:

Wow, people just can't get enough of Atlanta.  I'll be interested how it pans out for everybody down the road.

Me too, we know the lemons will be flipped to the uneducated investor, this is already happening.

Its yield driven.

WI

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April 12, 2012 - 11:29 pm

Cheeves, LOL, not talking title insurance, property/landlord insurance, purely payments/systems that do not work….. that's another story, hence my comment.

I do not like the lease contracts in Georgia it favours property management companies, you all need to adopt our contracts in Australia.

PM companies want to squeeze every ounce of blood and then some more. I imagine most will not read these contracts, but they should. I think many will be shocked at what they can get away with.

Cheers
WI

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April 12, 2012 - 1:48 pm

Hi Menunes
'wrong things' investing….. can you share??

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April 12, 2012 - 1:39 pm

Its just amazing to me I was making hard money loans on these same assets in 07 at 90K to 120k per home and now buying them back at 30 to 40k PLUS Rehab

Jay

Helllllo.. I live in the world of  Oz we are paying $400K per property entry level,  properties in Atlanta ….. $30-30K yep….I am  loading up.

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April 12, 2012 - 1:22 pm

Hi Steve
looking forward to hearing more, keep us all posted on your experience, and by the way Atlanta (GA…………., you mentioned cashflow

WI

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April 12, 2012 - 6:48 am

Buzz
 
Everyone appears to be so friendly and helpful, yet so many people seem willing to rip other people off.

….. No need to go to US for this, plenty here in OZ.

For those who have purchased in the US, how is it all going? Has it been worth it? Will you be doing it again?

Have been in the Atlanta market for 12 months, am over the moon with selection of properties to date, am still looking  but has been  difficult of late to find properties that fit my criteria. With slippage that may occur I am only interested in properties that will provide higher yields to reduce risk.

Property management – early days, however all properties tenanted immediately, I am not too keen on the lease contracts, but these are stock standard in Georgia, good luck to anyone who can change it.

Banks – shocking, they charge fees for everything and backward, plenty on this topic on forum

Insurance companies – l wont deal with them as its a waste of time, just hand ball to property manager, lawyer.

As I mentioned early days for me, another 12 months and I will let you know how things are panning out.

Cheers
WI