All Topics / Overseas Deals / USA Investing -My Opinion Only

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  • Profile photo of sapphire101sapphire101
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    @sapphire101
    Join Date: 2006
    Post Count: 203

    In my personal and humble opinion, the area to invest in the States right now is multifamily property. Capital gain is non existent and will be most likely for some time so you have to create your gain and it won't get better than now for some time as well.. The key therefore is to have as many income streams as possible and why not under the same roof, after all when that needs replacing you only have the one roof to do, one heating system, one lawn, one problem at a time and multiple people helping to pay for it. All your tenants are under that one roof and not spread out across the city. A property management company specifically geared to deal with multi-tenanted buildings is managing it as a business, not a sideline as many agents do and you are maximising your investment in every way.

    Foreclosures and discounted sales on these buildings are increasing as owners find themselves over-leveraged and unable to refinance their commercial loans (if you thought the housing situation was bad, the commercial sector is huge and in worse shape) I am living in New York and have been watching the market across the US since Jan 08 so have a reasonable handle on it. I have an example of a 10 unit block in foreclosure in one of the least affected US cities with the most prospect for employment and growth selling for  $159,000. You can buy these places for as low as $4000 per door as they say here, for a 1 -3 br unit. I have many examples of these in various states right up to a large apartment complex in need of renovation selling for $750,000, just recently dropped from $950k and 6 mths ago was $1.4m. Now that may look quite drastic, but the place is assessed at $2-3m and the bank is just trying to offload it for what it can. With 146 apartments renting at $400 – $600 per month each, the potential there is large for the right investor with the right management company. You do the maths – the more doors, the more income. $1m in rent from one complex with a price tag of .75m and maybe a reno of the same there is a healthy return in there for someone.

    Another sold last week in Houston Texas with 201 units for $1.8m or $9,000 per apt. Another at auction in Cleveland with 24 newly renoed units, fully tenanted for $132,000. There was only one bid! In New York there are some great brownstones in foreclosure, 8 or more units, selling for 50% of their previous value.They require minor renovation and command excellent rent returns. It just depends where and what you want to invest in.

    You have to be very careful where you buy, not only the state, city and neighbourhood, but it goes down to the street, so I wouldn't recommend purchasing without having someone on the ground over here or coming here yourself with a very specific agenda in mind. The US is a big place with thousands of housing markets. Just have a look at http://www.housingpredictor.com for an insight.

    Hope this is of some help to you and if you are serious about investing in the US now and you'd like more information from someone on the ground over here then email me at [email protected] and I will try to answer your questions.
    Ian

    Profile photo of sapphire101sapphire101
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    @sapphire101
    Join Date: 2006
    Post Count: 203

    One other thing….. with regard to all those people on this site offering to sell their investment properties in Buffalo, New York State. No offense to you, but there's a good reason for that and the fact they are all trying to sell since late 07, and throughout 08 says it all. Investors are like sheep most of the time and will follow other investors into the "next best thing" and then all get caught out if the market changes.This is what happened in this area with Aussie investors who bought in 04-06. I'm not saying it was all bad, but they've all taken a 50-80% drop in value. Do your research on US states and make your own decision, but to me anywhere that hits -10C or greater and is covered in snow half the year is somewhere people have to live, but don't want to. Many of these northern US areas were industrial and manufacturing based cities which drew the population to the area. This industrial age has now almost ended and the cities haven't diversified quickly enough. The people left there are the rich and the rest. You will be renting to the rest …. the unemployed 'rest'. All the good renters have moved to sunny Texas.

    mattnz
    Participant
    @mattnz
    Join Date: 2007
    Post Count: 574

    Thanks Sapphire, interesting reading.

    I’m curious to know if you were aware of these great deals before they happened, or have just been reading about them after the event in the newspapers? There is a big difference between having the opportunity to purchase an amazing deal and hearing about someone else’s that you never got to hear about in time.

    Profile photo of sapphire101sapphire101
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    @sapphire101
    Join Date: 2006
    Post Count: 203

    There are literally hundreds of thousands of deals available now across the US. This is not an exaggeration of the numbers. I use software that brings up many of the bank owned properties daily. You literally just have to choose any state, and city and property selling anywhere from 2c to 90c in the dollar will be selected and there are hundreds and hundreds and hundreds of them. The choice is quite overwhelming.

    If you'd like to buy a 4 plex (4 units) today in Oklahoma City in a decent neighbourhood renting for $2000 per month you'll need $30k. If you'd rather 16 units, that will cost you $400k, an 8 unit brownstone building in Harlem NYC that will rent for $10,000pm will cost $600k.

    The situation here is so different to Australia, it's hard to imagine and if you can't find a deal everyday, you're either not interested or in jail, (or both).

    Try going to the websites for Bank Of America or any large bank and the 2 gov't lenders Fannie Mae and Freddie Mac and see what they are trying to offload from their books. http://www.homes-for-sale-center.com/freddie-mac-foreclosures/index.htm

    Also Century21 is a national REA, check out their site for a sample. Here's a sample
    http://www.century21.com/realestatelistings/Detroit-MI-48219-16217+Greenview+Ave-35525363

    Also try http://www.auction.com, the list of online resources to locate property is endless.

    Have fun and blow yourself away.

    Profile photo of sapphire101sapphire101
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    @sapphire101
    Join Date: 2006
    Post Count: 203
    Profile photo of marx3bullmarx3bull
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    @marx3bull
    Join Date: 2009
    Post Count: 86

    Why do not you prefer Detroit ? Can I know please? As far as I heard the market here is in a good position now. Someone told me to invest here. Is it risky to invest in Detroit ? Thanks in advance.

    Profile photo of sapphire101sapphire101
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    @sapphire101
    Join Date: 2006
    Post Count: 203

    Just my opinion re Detroit. I know of investors doing well there and a couple who are flipping houses making $20k+ profit per month but they are from Detroit and know the neighbourhoods well. Detroit has unusually high unemployment, many suburbs that would be difficult to maintain rentals in, a declining population and high crime rate so there are better cities to invest in, in my opinion.

    That being said, property is dirt cheap there. I saw a nice 2 storey house in a good street at a mortgagee auction with a starting bid of $500 and taxes owed for $6k. Previous value in 2006 was $240k. No-one in the country placed a bid. Not even a local. Odd isnt it?

    An area of investment I would consider there is the inner city fringe, where larger commercial buildings can be renovated for alternative uses, either warehouse apts, gallery spaces, etc. Depends how much money and time you have and what your ultimate goal is.

    Best to visit the US and have a look for yourself. Don't rely solely on what people tell you, me included.

    As far as multi family property goes, Detroit has many selling for peanuts, literally. $25k for a 12 unit building for example. I can't recommend buying them just because I wouldn't buy one myself.

    Profile photo of simon.lamsimon.lam
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    @simon.lam
    Join Date: 2009
    Post Count: 3

    im certainly keen in investing in the US now considering the US?AUD is almost on par, i dont think there is a better time to start investing over there. Just wondering Sapphire whether you purchased any properties over there and if so, what are some of the implications you should watch out for, especially for non-US residents?

    Homes are dirt cheap and I definitely like the idea of having multi tenants in the one place as this reduce the risk of having no tenant and no cash flow.

    And the funny thing about most US homes, is that they are so big…you could even strip it all down and sell the parts and still get a profit…i think.

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

    Hello I just came back from looking at investments in America and found multis are more trouble than they are worth.
    Get into single family homes that are in high demand and tenants will stay and be happy long term.
    more overall income in single family homes!

    for more information on investing in America http://www.cashflowgold.com.au
    '

    Profile photo of simon.lamsimon.lam
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    @simon.lam
    Join Date: 2009
    Post Count: 3

    In the States, is the multis considered like duplex, triplex and 4-plex? I have never been to USA but some of the buildings slightly differ to the ones here in Aus.

    S

    Profile photo of jaffafaljaffafal
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    @jaffafal
    Join Date: 2004
    Post Count: 17

    Hello All,

    thanks sapphire101 for the website information for the US. I have been keen on the US market for a few months now, but I need to really settle on acouple of cities.
    the fact that detroit will be part of the green business projects the us government is pouring money into is very appealing.
    a few other sites i found investing
    government homes for sale. this is good as it has a lot of detail, full 20+ page properties booklets on each place, and the real estate agents near by to contact
    http://portal.hud.gov/portal/page/portal/HUD/topics/hud_homes

    also
    http://www.homesteps.com/hm01_1featuresearch.htm
    this is the infamous freddie mac property search site, the downside to it is really doesn’t give an details about the properties

    as you do research on the us market you realize that often a lower priced property can had been ransacked already for copper (ie: the plumbing pipes have been ripped out)

    at the moment a lot of them are cash only to buy or at least 30% deposit.

    my question is does anyone know a good mortgage broker over there?

    and I’d like a 4 to 5 city range to research, where else are people looking in the US?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Joanne

    Been involved with finance in the US market for over 20 years and dont think you will find any US lender be too keen on an application for a Foreign National inthe current climate.

    Currently the only State we deal in is Florida which has specific laws for FN lending.

    Dont take applications these days from any other State.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of jaffafaljaffafal
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    @jaffafal
    Join Date: 2004
    Post Count: 17

    Thanks for the update richard, yes it is tricky, it’s interesting we are talking about US property and tonight at Steve Mcknight book launch he spend about 20 minutes talking about the US market,
    he went over and brought some houses (i think in florida) and several tax lien. he mentioned he’ll go into more details at the 3 day conference next year.

    Richard would it help that I have a US passport and Social Security number, or the fact I live in Australia still makes it hard?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi Joanne

    If you have a FICO score that will go in your favour.

    Passport does not especially if you are a resident of Australia.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of simon.lamsimon.lam
    Member
    @simon.lam
    Join Date: 2009
    Post Count: 3

    Richard,

    If you are a non US resident, what are the chances of getting finance in the US banks?

    One of the CA banks replied back saying that if your a “legal resident alien with a green card”, you can apply for a mortgage loan.

    From the post above, it seems there’s almost little chance of getting any finance over there – even if the properties are CF+.

    Simon

    Profile photo of TCLinvestmentsTCLinvestments
    Participant
    @tclinvestments
    Join Date: 2009
    Post Count: 84

    Hi,

    I am also very interested in investing in the US.
    I am particually interested in the example that Steve gave us on that book launch night. Bought a place for 13k, duplex, and renting for 450/month. along those lines. 
    I am hearing of houses for sale that will collect rent for the less than 100k mark. How difficult would it be for me to turn up with cold hard cash and say i want that property?? No financing, just cash it?? then just collect rent, making sure the place is looked after.

    and what about tax liens?? does anyone know more about them, or how can we in australia invest in them?

    Profile photo of jaffafaljaffafal
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    @jaffafal
    Join Date: 2004
    Post Count: 17

    Hello All,

    TLC investments yes I am so keen on that myself, did you sign up for the 250K Club?, that was such a good deal!
    I think they're is a bit of legal research effort that needs to be in tax lein , that's why i am keen on Steve creating that pipeline of enable people to buy from Australia.

    I have been trawling the internet for info but haven't found anything substantial.

    I would like to atleast buy one property in the US in the next six month it feels like such a unique time in history, a great opportunity.

    Profile photo of TaylorChangTaylorChang
    Participant
    @scha9799
    Join Date: 2009
    Post Count: 234

    Hello Joanne,

    after read your post, I am really interested in investing in US.

    what's 250K Club ?

    TaylorChang | Finance Broker
    Email Me | Phone Me

    Home loan | Commercial loan | 0414 691 517

    Profile photo of jaffafaljaffafal
    Participant
    @jaffafal
    Join Date: 2004
    Post Count: 17

    Hello All,

    scha9799, good question! what is the 250k club?, Steve on his book luanch tour is looking for 250 people to sign up to accept the make $250,000 from property in next 18months. Man, he was throwing in 2 x 3 day conference tickets may 2010, the master class started pack, and creating a networking group, some other things I can't even remember for the grand total of$585.

    I paid $495 for a single 3day conference ticket in 2008!
    so I was definitely keen. I think they would have filled the 250 just in sydney people were rushing to sign up.

    but let me stress the 250k has nothing to do with overseas investing, i think it's about buying in OZ. and adding value/sub dividing.. Have to see… Why is steve doing this he wants to collect testimonials for future books, he mentioned it at the Book Launch.

    Profile photo of TCLinvestmentsTCLinvestments
    Participant
    @tclinvestments
    Join Date: 2009
    Post Count: 84

    I didnt join the 250k Club, on the night, I dont like doing anything on the impuse. are there seats left?? and who do i contact if i want to join.

    It seems like a great idea. but i couldnt do it on the spot like that. 250k, in 18 months, yes please. even if you  only acheive 1/2 of that, thats like 125k, now thats gota be worth something.

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