All Topics / Overseas Deals / Michigan Property Market

Viewing 12 posts - 21 through 32 (of 32 total)
  • Profile photo of Assist Business NetworkAssist Business Network
    Participant
    @assist-business-network
    Join Date: 2010
    Post Count: 8

    Hi Jason,

    I have been investing in Detroit since late last year and have purchased 5 properties in a LLC.

    With tax time coming soon (I elected to do a 30 June balance date) I am looking for an accountant to do my tax returns.

    Is there anyone you can recommend?  If not, I will start googling.

    Cheers

    Profile photo of SingerSinger
    Member
    @singer
    Join Date: 2009
    Post Count: 75
    kameruka wrote:
    Property Anaylsis  
     Year 
    Purchase Price 8,000
    Title Work 700
    Renovations 5,000
    MONTHLY COSTS  
    Property Management 10% 80
    Property Maintenance 10% 80
    Insurance1200100
    Taxation Rates2500208
    Rental income 800
    Cash return per month 332
    cash on cash % 29.05%
       
    ROI 70.07%

    Singer, I hope this is ok?
    Please ask and i will do my best to answer any questions.

    No, not really.   These seem all theoretical, especially the rental income.     Unless I see an address and hard information I continue to be sceptical.    

    Profile photo of djjkdjjk
    Participant
    @djjk
    Join Date: 2010
    Post Count: 87

    Robert
    Are you saying you can elect for a different year end in the US?  This would be really helpful, rather than needing to do your tax return financial summaries twice a year!

    Thanks
    Josh

    Profile photo of kamerukakameruka
    Member
    @kameruka
    Join Date: 2008
    Post Count: 49

    Hey guys

    Just back from Michigan, Had a great time can't wait to get over there again in June.
    Please send through ant questions you may have.
    I am not here to convince people my numbers are correct they with stand any test and have been tested already by Aussies who have just purchased on our last property tour. You should do your own due diligence with any investments where ever  you may decide to purchase.
    We had a great time with Aussies snapping up some great deals, they are also keen to come back again themselves for more property.

    Profile photo of kamerukakameruka
    Member
    @kameruka
    Join Date: 2008
    Post Count: 49

    Just seen some great videos of Michigan property market.
    We had a blast in Michigan loads of great property / happy investors.

    Robert give me a call about an accountant.
    Glad to hear you have got some deals in Detroit, Michigan.

    Profile photo of kamerukakameruka
    Member
    @kameruka
    Join Date: 2008
    Post Count: 49

    Lets look at the numbers?
    Shoot through any questions happy to assist with information

    Profile photo of detroitmarketexpertdetroitmarketexpert
    Member
    @detroitmarketexpert
    Join Date: 2010
    Post Count: 6

    Some thoughts on working with ground partners in America

    Ground partners are a necessity if you are buying property in another country. Even if you were to move to America it is unlikely that you could do everything required to renovate and rent or sell your property. This is especially true if you plan on renting your property. Unless you plan on living here forever near your investment property, you will need a property manager.

    So here are some pointers to assist you in researching, vetting, and hiring your ground partners.

    1. Look up their business on the official state website. Almost every state has a database with business registrations on it. This will tell you if the business is registered with the state, if it is in good standing, and if it is a real business.

    2. Look them up on the Better Business Bureau website. Don’t be surprised if they are not on there as many business are not but it doesn’t hurt to look. Also, don’t be to surprised if they have a few complaints. It’s hard to run a business and not upset someone. Look to see if the complaints were responded to and/or settled.

    3. Google the business’s name and the owner/agents name. Google is a powerful tool when looking up dirt or good things about a company. Don’t be surprised if you find both. Ask questions about anything negative you find. As a rule of thumb, most people will do what is right when it is easy, fewer will when the chips are down or if the solution cost them money. Find out about projects that went bad and what they did to fix it.

    4. Ask for references and testimonials. Nobody will give you their entire database but I don’t know any good business owner who won’t give you 3-5 references to help secure some business.

    5. Check out their business websites, blogs, and social networking profiles. Get to know them, how they approach business and life and make sure this reflects what you want to see in a team member.

    6. Ask questions and verify answers. This is probably the toughest part because most people don’t have enough knowledge about that area of expertise. Before you invest, read about property management, call property management companies and ask about rent checks, vacancy, and fees. Ask to see contracts and agreements in writing. Educate yourself in their field enough so you understand what they are saying. You don’t have to be an expert in everything (not possible anyway) but you really should know enough to spot the B.S.

    7. Take your time when hiring! Don’t make snap decisions. Contact as many business’s as possible, narrow it down, and go through it all again. Yes this will take time, but if you’re not willing to take this time and be diligent, you should probably just leave your money in the bank. Most risk in investing is due to a lack of knowledge and poor execution. Take your time, learn, THEN leap.

    8. Pay your professionals well. Yes, you want a bargain and a competitive bid but often the low price leader doesn’t deliver the highest level of service or the best quality. To a certain degree, you get what you pay for. Remember, everyone works (unless you’re independently wealthy!) and people expect to be paid based on quality of workmanship, knowledge, reliability, and results, including you.

    9. Call and talk to the business owner or rep. See if you like them and you get along. Check how quickly the respond to emails and phone calls. This may seem silly but you are considering a long term investment and you will be working with this company for a long time. The whole experience will be much better if your communication styles match and you like the person.

    Hope this helps.

    Jeremy Burgess
    The Detroit Market Expert
    http://www.google.com/profiles/jeremyudw

    Profile photo of ReggieZZReggieZZ
    Member
    @reggiezz
    Join Date: 2010
    Post Count: 1

    While it is an old thread, I have been reading with interest.  I am interested in the potential investment opportunities in the USA and specifically Michigan.  A question for someone who has experience – rental returns of $800+ per month are thrown around, but what are the current occupancy rates of these foreclosed properties?  After purchase, how long does it usually take to get a good tenant and in turnover situations, what is the downtime?  Any statistics on this?

    Profile photo of djjkdjjk
    Participant
    @djjk
    Join Date: 2010
    Post Count: 87

    Depends on the property. I’m sure 800 is reasonable for a good place in a nice area. Don’t forget though that Michigan has slot of not so nice areas with huge vacancy rates. Just check the websites like yahoo real estate, homeopath, aol, trulia, bestplaces.net. There’s so many to get an idea of these. Also research your target areas on city-data.

    Personally,I wouldn’t buy in Michigan due to how much it’s suffered economically in the last few yrs.

    Profile photo of remereme
    Member
    @reme
    Join Date: 2010
    Post Count: 14

    Hi ReggieZ,

    I have just returned from Michigan as I was interested in finding out all of these questions myself.  There are plenty of very good investment opportunities in the state.  I have managed to secure 1 property from the tour and have a couple of offers still pending. 

    Renting out doesn't seem to be a huge issue.  It may take a few weeks, but that is pretty normal in most markets.  The property management team are very thorough in their selection process (I asked every question i could think of and was impressed). 
    Yes there are a lot of foreclosed properties, but these people still need somewhere to live (as they can't get mortgages), so they rent.  By renting, they are often eligible for some assistance, and there is a program called Section 8 where the governement pays a portion of the rent directly to the owner.

    I have just done the Cash Flow Gold Tour, and found it excellent. Pay a one off fee for the tour and get access to their network, which I found impressive (the tour also includes the accommodation which was very good and all meals). 
    I'm pretty picky on who I use for our investment properties in Australia, and the networks there I felt ver comfotable with.  There are also a few investors who have already gone through the process of buying, doing the rehabs and renting out, and without proplems.  That's not to say that everyone will have a perfect experience, but if you do your due diligence and research the areas you buy in, then that will make the process a lot smoother.  Being on the ground in Michigan,  I was really able to get my head around all of this and ask all the questions that I had.  If you can't get there, then there is a long distance buying option.  I think it would be worth every cent as you'd be tapping in to very good knowledge about location – that is the key.

    $800-$850 per month rent seemed achievable in many of the areas I looked in for a good 3 bedroom home in a good location.  Net yields of  20-30% are very possible, which is certainly very attractive.

    I'm just speaking from personal experience as I have only just returned last week from the tour which was very transparent and worthwhile.

    Regards,
    reme

    Profile photo of British BuyerBritish Buyer
    Participant
    @british-buyer
    Join Date: 2010
    Post Count: 149

    If I were to buy in Detroit I'd wait until mid-winter (if you can stand the cold) or early spring.  Property markets in the US (like they are here in China) are seasonal: they go cold in the winter (except for the southern sunbelt).
     
    The Case-Shiller graphs of the Detroit market are enough to make bargain-hunters drool: prices hardly went up in the boom times yet crashed enormously during the GFC.

    The only reason I'm not jumping on the plane to Detroit is because I don't know if prices are going to turn around soon, and I'm put off by the hassle of owning rental properties for the long-term on another continent.

    Profile photo of TassieJHTassieJH
    Participant
    @tassiejh
    Join Date: 2010
    Post Count: 41
    ambosh wrote:
    Robert
    Are you saying you can elect for a different year end in the US?  This would be really helpful, rather than needing to do your tax return financial summaries twice a year!

    Thanks
    Josh

    Josh,
    some IRS info here for Rentals came across this futher detail specifically for rental property.
    "Topic 414 – Rental Income and Expenses"   http://www.irs.gov/taxtopics/tc414.html 

    also download the IRS booklet info http://www.irs.gov/pub/irs-pdf/p527.pdf

    The LLC can elect a preferred reprting date as per this url:  http://www.irs.gov/businesses/small/article/0,,id=98277,00.html

    Effective Date of Election

    The election to be taxed as the new entity will be in effect on the date the LLC enters on line 8 of Form 8832.  However, if the LLC does not enter a date, the election will be in effect as of the form’s filing date.  The election cannot take place more than 75 days prior to the date that the LLC files Form 8832 and the LLC cannot make the election effective for a date that is more than 12 months after it files Form 8832. However, if the election is the “initial classification election,” and not a request to change the entity classification, there is relief available for a late election (more than 75 days before the filing of the Form 8832).

Viewing 12 posts - 21 through 32 (of 32 total)

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