Thanks white_goodman
I did think maybe it was just due to more people living under one roof, and also the issues of too many houses before the GFC led to an over supply in the current market place. Just was not sure exactly how it all worked, unfortunately economics has never been my strong point.
I suppose is increased population exceeds the number of houses completed (divided by a suitable occupants per household number) then eventually the vacancys will come down, that would at least make the area look a lot less scary.
Today is my last day in Miami. I've put in some very low offers on some houses, and am still waiting to hear back from the banks. None of these are houses that I'm "in love" with, but if I can get them at the price I offered then I got a real bargain.
I'm now only using REO listing agents when I put in offers, and if anyone bids higher than me I'm pretty sure they'll let me know. So far there haven't been any other bids on these houses, even though they're REOs. Sound strange to you? Let me use a metaphor from my own life to explain why:
When I was 30 I'd made what I considered to be a lot of money (by running a small import business in Taiwan for 3 years). I was sick of doing business, and dreamed of travel and freedom. I suddenly got it into my head that I wanted to be a commercial pilot. I put most of my money into Nasdaq stocks that had recently crashed (this was 2000) and kept aside enough money to pay for my flying lessons. A few months later I met a very beautiful 29 year-old woman. I shall call her "C" so that she can remain anonymous. We fell in love. She had just emerged from an 11 year relationship (with the only man she'd ever been with) and was traumatized by the experience: he'd dumped her and run off with his business partner, an attractive go-getter).
In my opinion, the woman that C was dumped for was not nearly as intelligent or beautiful as C. The only reasons that I could think of that C and her ex-boyfriend's relationship had failed was boredom, and different life goals. C already had her Masters in Zoology, and was working on her PHD, when she decided to go back to uni. and start a 6 year medical degree. While she was in her second year of medicine, her boyfriend, who also had a Masters in Zoology, started an Environmental Impact Company. It was doing well, and he wanted C to help him full time, but she refused, sticking to her very demanding medical degree. C's boyfriend then partnered up with the woman he was soon to run off with.
After C and I met we were together (very happily) for about 6 month, when one day I woke up to discover I'd lost all my money on the Nasdaq stocks. I no longer had enough even to finish my commercial pilots license (you have to hire aircraft by the hour, which is unbelievably expensive), Although I was in love with C (or at least knew that I COULD love her to the point of marriage) my options suddenly seemed limited. It was at this time that my sister gave me a book on the coming rise of China. Before I knew it my mind was already made up to radically alter my life. To move to China would mean leaving C. I couldn't expect her to dump her life and go with me (perhaps she would have though) and besides, I knew taking her to China with me would be a huge mistake and liability. I'd made money in Asia before (in Taiwan), could speak OK Chinese, and knew what was in store for me. Trying to take C with me would have doomed the mission to failure from the start. So instead I broke up with her, and began making plans to leave.
She took it very badly. She became a man-hater, having just been "dumped" by the only two men she'd ever been with. My explanations (which seemed so logical to myself) landed on deaf ears. She wouldn't believe that I was leaving her because of something I had to go far away to do. She believed there was something wrong with herself.
The last time I saw her was 4 years ago, and she had no husband or even boyfriend, had quit the medical degree, and was working for a multinational. She was as beautiful as ever.
The moral: even beautiful intelligent woman get passed over.
What's this got to do with buying houses in Miami?
Even good REO houses get passed over, if they've been "dumped" (IE. a pending sale fell through) or they've been "ignored" for a certain period of time.
Why would a good house get ignored?
An REO will be put on the market at a price chosen by the bank's asset manager. If he's an idiot he'll price it too high. It will then fail to attract any bids, or may attract one or two very low bids, which the asset manager will snub his nose at. It will then just sit on the MLS listing site for month after month, getting very little attention. Eventually it will get a "stigma" of being unwanted and worthless.
REO buyers are all after virgins. They pounce on anything new, so long as it's priced low. The listing agent then plays all the bidders off each other (telling the buyers that there have been multiple offers) driving the price higher than the asking price. Yet the REOs that were priced too high just sit and get ignored by all. People see Days On Site (DOM) of 60-plus and they just look the other way. But some of these houses are real steals, so long as you time it right. If the bank's been waiting for high bids for months and months while turning down any very low bids, but then just as you submit your ridiculously low bid the asset manager get's pressure from his employer to move his REOs faster, your low-ball bid might just slip through. I haven't been this lucky myself YET, but have seen a few such bids of other people get accepted this past month.
So the world of mating is very similar to the world of housing. There are some very attractive women and houses out there that would make you very happy, yet if you just run around like all the other randy buyers chasing expensive virgins you're going to have such stiff competition you may end up on the shelf yourself. Or you might get her, but end up paying way too much (models make very high maintenance girlfriends).
Another observation: in the whole month I've been here only 3 REOs came on the market in the areas I've been looking in. All 3 got snapped up immediately. This shows just how slow the REO business has become, and this is supported by the figures that came out yesterday:
(Reuters) – Sales of previously owned homes fell more than expected in October, possibly due to delayed foreclosures and overly strict lending standards, the National Association of Realtors said on Tuesday.
Sales fell 2.2 percent to a seasonally adjusted annual unit rate of 4.43 million units from September's 4.53 million unit pace, the group said. Economists polled by Reuters had expected existing home sales to fall to a 4.49 million unit pace in October. U.S. stocks added to losses after the data.
NAR chief economist Lawrence Yun said the decline in sales stems from "overly strict" lending standards which are preventing qualified borrowers from getting loans and "may be partly" due to the temporary halt of foreclosures as banks work through questions about paperwork.
Sales have fallen 25.9 percent over the past year, while median prices have fallen 0.9 percent in the past year to $170,500.
Yun said the group expects sales to total about 4.8 million units for all of 2010. He expects sales to rebound to what he considers a healthy pace of around 5.1 million by 2011.
Hi British Buyer,
Great read – I hope you manage to snap up some of those bargains! No need to be 'in love' with the houses, just as long as they achieve the results you want.
We had some good results yesterday in Michigan with 2 more offers being accepted on properties. After bidding on quite a few, we've managed to snare a couple for what we think are good deals in nice neighbourhoods. Persistence pays off..
Oh, and I hope for C's sake that someone realises that she is one of those sitting gems, wins her over and lives happily every after
British Buyer,
You can't leave Miami yet
….. it would be like Horatio leaving CSI .
… but seriously folks we have all gained a lot of US knowledge from your post and the dedication to the thread/journey.I am sure other will agree that we would like to continue "reading the story" and stay tuned for more episodes on MIAMI (ad)VICE.
regards,
TassieJHHi BB,
You mention about some investors slipping through a few low ball offers. What sort of discount off the asking price are you talking about? Just after a bit of perspective.
Andrew
PS. I have been reading this thread from the beginning and it has been great to follow. Thanks for the awesome contribution to the site.
itsandrew
Go as far as you can see and you will see further.
Hello British Buyer;
Work has dragged us away from everything but what we want to be doing. I just spent some time catching up on the missed posts.Thank you everyone for your committed input into this blog! We love it and appreciate it!
We have dropped the ball abit with our March trip. But back on it now. We caught up with a Jason from 'Cash flow Gold' who concerntrates on Detroit… so we are considering a fews days there. There's still so much research to do. Alot of people are suggesting against the idea of Miami, but noe the less we will further investigate and keep at it.
BB! Your first hand expierence has been next to none! We'd love to say thank-you by taking you out for a dinner and drink's when we arrive in March !!
Hi British Buyer and other avid thread followers,
You may have seen this "documentary" posted on You Tube regarding the Foreclosure Realtor process
Sums up some of Steve's experiences nicely,
Hi Everyone
I'm back on Hainan Island. What a culture shock. China is so gritty compared to the US, with it's neat sidewalks and well-kept lawns.
I've been missing Miami so much (not just the environment, but the buzz you get from REO hunting) that I had to hold myself back from buying plane tickets for my family for next week. But logic dictates that it's best to wait another 6 weeks. Nothing happens in the US between Thanksgiving (Nov 25) and Christmas. And it's stupid to expect the banks to be dumping tons of new REOs on the market the day after Christmas. They'll most likely only start selling REOs in greater numbers in February/March.
So my plan is to try to sell one or more properties here in China in the coming month, and then take the whole family to Miami around Jan 10. This time I shall be going on a B2 visa (instead of using the visa waiver) since that's the only way you can get a Florida drivers license, and without the license you can't insure a car (I plan to buy a cheap pick-up). Progressive (the largest insurer) will let you buy just 6 months of insurance for about $820, so long as you have a local license.
This insurance will cover you for $10,000 in car damages and $20,000 in injuries you caused to other parties. This is not that high, considering that if you really did cause injuries to someone else you'll probably be sued for millions. This is why you need to put your property in an LLC, because you will be sued for the value of whatever possessions you may have (I assume this would apply even if you were driving a rental car when you caused an accident).
Even if you buy the most expensive insurance ($2,500 for 6 months) you will only be covered for 50K of injuries caused to other parties, which is a drop in the ocean if you're being sued for 1 million bucks. According to the consultant I talked to at Progressive, there is no insurance that will cover getting sued for injuries you have caused. I assume that if you own a property and someone (your tenant, or a contractor) gets injured on location, there is also no insurance that could cover you against a million dollar law suit. Once again, best to go the LLC route.
Last night the latest Case Shiller data came out. It seems prices are still falling. In fact, prices in September fell in 18 of the 20 large cities studied. More surprising is that the rate of the fall is increasing. Here's the link:
http://www.reuters.com/article/idUSN3032407020101130?loomia_ow=t0:s0:a49:g43:r5:c0.050000:b39925678:z0My prediction is that there will be further falls in 2011. However, the amount of the decrease won't be too alarming (perhaps a total of 5%), This is very low compared to the 30% crash between 2009 and 2010.
The only reason prices won't fall drastically is simply because prices are already very low. Whenever I saw a good deal (an REO that was correctly priced and in a good area) there were tons of buyers sniffing around and making offers. They all seemed like Mom and Pop buyers, not investors. Once it becomes cheaper to buy than to rent, there'll always be enough buyers to prevent the bottom falling out of the market.
So why will prices still decrease next year? Because the inventory of REOs on the banks' books has increased dramatically in the past 3 months (due to the Foreclosure Moratorium). Yesterday I read on Reuters that banks have 25% more REOs on their books this November than they did in Nov 2009. Considering that they haven't started releasing REOs back onto the market at the same rate at which houses are being foreclosed on, that inventory will still climb higher.
All things considered, 2011 should be a great year to get great discounts.
Hi BB,
Has been great reading your posts and following your journey. Can't wait to hear more about your family journey's to Miami. Hope the sales of the Chinese properties go smoothly.Cheers,
reme
Hi BB and all
It's great that we can share in other's experiences with our investing. I have just returned from the USA myself and have been astounded yet again at the opportunities, although this trip was more about catching up with my USA contacts to get ready to go again! 2011 will be year 6 for me in the US and probably the best yet and as in 2005, I will be glad to join in the information sharing through PropertyInvesting.com
One of the common threads I find in reading the posts in this forum is the lack of a common place or one-stop-shop for all of the information needed to invest in the US. There are plenty of threads with information scattered all around the site.
I may be able to help this and you guys help me at the same time as I am currently undertaking a course in Internet Marketing and, with your permission, I seek your assistance in creating a free e-book for participants in this forum.
In the project I will need to cover all of the aspects involved in investing in the US, many of which I will provide from my own experiences, as well as seek information from the experts both from within Australia and in the US.
The benefits for me will be the opportunity to conduct my first ever survey and write my first e-book, not for profit but to get the experience and complete this project as part of the course. The benefit for you will be to have your questions answered and have a single reference book for whatever purpose you wish to use it.
A survey page with two questions has been set up at http://www.surveymonkey.com/s/C3K32QF and I would really appreciate it if you could assist.
Please feel free to ask any questions.
Thanks for your help.
aussieinvestor | Digital Revenue Pty Ltd
http://appliancewhiz.com
Email MeHi Aussie,
That sounds like a really cool idea. I'd certainly like to see what you come up with. Something that would be helpful as well would be to include a directory of reputable contacts on the ground over there (lawyers/attorneys, REA's, accountants, finance brokers, tradesmen). I am finding that I can get information to get me started on the learning process but knowing who to call to take it that next step is something I'm not confident with. I think building a team long distance is right up the top of the challenges I face.
Regards,
Andrew
itsandrew
Go as far as you can see and you will see further.
Sounds like a good idea Aussie.
If the investing gets enough traction then maybe they will rename a new Miami suburb Little Australia!
Hi everyone
Thanks for the overwhelming response to the survey. There are certainly some common themes appearing that I will get to work on straight away, especially property management, structures, tax, areas to invest and different strategies.
I think that the best way will be to write a chapter then email you for comment then the next and the next then put it all together at the end for a first class ebook. This way you can access the information on the hot topics before completion.
The survey can be found at http://www.surveymonkey.com/s/C3K32QF
Cheers
aussieinvestor | Digital Revenue Pty Ltd
http://appliancewhiz.com
Email Meaussieinvestor wrote:Hi BB and allIt's great that we can share in other's experiences with our investing. I have just returned from the USA myself and have been astounded yet again at the opportunities, although this trip was more about catching up with my USA contacts to get ready to go again! 2011 will be year 6 for me in the US and probably the best yet and as in 2005, I will be glad to join in the information sharing through PropertyInvesting.com
One of the common threads I find in reading the posts in this forum is the lack of a common place or one-stop-shop for all of the information needed to invest in the US. There are plenty of threads with information scattered all around the site.
I may be able to help this and you guys help me at the same time as I am currently undertaking a course in Internet Marketing and, with your permission, I seek your assistance in creating a free e-book for participants in this forum.
In the project I will need to cover all of the aspects involved in investing in the US, many of which I will provide from my own experiences, as well as seek information from the experts both from within Australia and in the US.
The benefits for me will be the opportunity to conduct my first ever survey and write my first e-book, not for profit but to get the experience and complete this project as part of the course. The benefit for you will be to have your questions answered and have a single reference book for whatever purpose you wish to use it.
A survey page with two questions has been set up at http://www.surveymonkey.com/s/C3K32QF and I would really appreciate it if you could assist.
Please feel free to ask any questions.
Thanks for your help.
Have a look at http://www.deangraziosi.com. Although he is a “TV infomercial guy” there is a lot of good resources and good forums where people share.
AussieInvestor,
your eBook sounds a great idea. (Just done the survey. Looking forward to seeing the first draft!)
I totally agree about the benefit of having all of this scattered information consolidated into one database. It’s otherwise quite a challenge to filter the good information from the bad.
When are you hoping to have the first draft ready?BB,
just wanted to say “thank you” for your generosity with your posts on this thread. I see I am hardly the only one who has found your journey fascinating/inspiring/informative. I hope to be able to return the favour by sharing what I learn over the next few months with my debut USA investment trip approaching (Jan/Feb 2011).Cheers, TH
Hi TH
I am currently picking the brains of my USA team to provide their expertise. Leading up to Christmas is proving a bit of a challenge so I won’t have anything until next year.
The more survey responses the more specific information, so thanks for completing the survey.
Others interested will find the survey at http://www.surveymonkey.com/s/C3K32QF
Have a Merry Christmas.
aussieinvestor | Digital Revenue Pty Ltd
http://appliancewhiz.com
Email MeHi Aussie,
This Miami (ad)Vice thread is an excellent contribution to propertyinvesting.com looking at British Buyer's journey in the USA. It covers many of the topics associated with sourcing and purchasing property and has been extremely popular with the users of the site.
It would be really good to keep this discussion to that topic.
I would suggest that your topic probably deserves a separate thread on this site. If you do this it will be much easier for our users to follow Miami (ad)VIce as well as to seperately follow the development of your contributions.
– Moderator.
Just got back into this amazing thread and wanted to make a comment to you British Buyer. I have insurance with Progressive for $708 for six months and I do not need to have a US licence. They needed a copy of my Australian licence, passport and a form of ID showing residential address in the US ie electricity, phone, water account. If you would like my Brokers details let me know.
Zita wrote:Good Afternoon All and British Buyer in particular.
My partner and I have been compelled by your posts and everyone else's on that note, since we discovered this forum a few weeks ago.
There was a turning point about a month ago when we both started to gravitate over the idea of investing in Miami (as this has always been a fantasty for us both) rather than going all out in the Australian Property. Our goals were so high and so are Aussie prices, Miami just suddenly looked so attractive and achievable? We were pleased to see that Britsh Buyer with all his experience and knowledge had also hand picked Miami as choice for investment, which confirmed to us we were on the right track.
I popped down to the local Travel Agency today and deposited return flights to Miami for March next year (although after reading recent posts, I'm anticipating that we won't miss the boat?) We have alot of research and actions to take between now and then, however, I believe it is an exciting venture and if done right, can set us up for a rewarding future.
Topics and information that really concern us now after learning the basics, is such details financially (looking into opening a bank account in Miami if necessary, a solictor/agent) making appropiate contatcs prior to heading over, having a select few properties on the market that we will attempt to go for, knowing the do's and don't of property buying in Miami, knowing whats is good for value and what is not. So as mentioned, alot to do, but you guys have inspired and helped already!
So on that note, happy to join the forum and share eveything and anything I learn between now and then as you have and are doing.
Good luck to all!
Hi Zita,
My mate and I are in a similar situation and are panning on visiting the US in May next year. Would love share experiences and findings. Let me know if you’re keen. We have created a joint email hence the fancy name…[email protected]
Look forward to hearing from you soon.
Cheers,
Lenny (streamlineinvesting)
….. it would be like Horatio leaving CSI 
.
we have all gained a lot of US knowledge from your post and the dedication to the thread/journey.
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