Jay, there are some banks and staff that are not abiding by the rules!! The US bank system of requiring quotas to be fulfilled by staff and commissions paid on the number of accounts opened leads to some staff opening accounts where they ought not. There are also a couple of banks that do not require their staff to abide by the Patriot Act but this may change at any time.
Lenny, If you go down the HSBC track, you may need to ask at several different branches to find someone who knows what they are doing. I know that many who have tried have given up but it can be done. Perhaps Giacomo will advise which Branch he used.spyglassltdMember@spyglassltdJoin Date: 2010Post Count: 37
You can open a etrade – business account online. Bizarre but true. Quite good facilities as well.
Would have to see it to beleive it that a bank would open an account with out the property documents.
Brokerage account as mentioned may be some thing differentActToday wrote:Jay, there are some banks and staff that are not abiding by the rules!! The US bank system of requiring quotas to be fulfilled by staff and commissions paid on the number of accounts opened leads to some staff opening accounts where they ought not. There are also a couple of banks that do not require their staff to abide by the Patriot Act but this may change at any time. Lenny, If you go down the HSBC track, you may need to ask at several different branches to find someone who knows what they are doing. I know that many who have tried have given up but it can be done. Perhaps Giacomo will advise which Branch he used.
I assure you it is happening JaywobblysquareParticipant@wobblysquareJoin Date: 2010Post Count: 95
Wow, great read. Thanks to BB – and others who contributed…to think it only took about a month to read through the entire thread.dhillon2Participant@dhillon2Join Date: 2007Post Count: 26
WOW! I didn’t even know that this thread was still active since the end of British Buyer’s 1st trip to Miami! Glad to see its still ALIVE
We’ve been here for 3 weeks now and I feel like we’ve learnt so much already! Firstly, I have been quite surprised that alot of the communities along the South Florida coast seem to be unaffected by this economic downturn. There are so many sports cars on the road – but I did find out that cars here are alot cheaper, especially secondhand ones.
We went to Atlantic Avenue in Delray Beach. Its lively, crowded with people, lots of alfresco dining and art galleries. We also went to West Palm Beach and I must say that I’ve never seen so many luxury yachts in my life! Sydney’s collection pales in comparison. I believe there will be an International Boat Show on this weekend. We went to the Farmers Market, where there are a great many stalls with high quality produce, live music and lots of locals walking their pet dogs. We drove down Las Olas Boulevard in Fort Lauderdale and marvelled at how many beautiful properties there were, with their private yachts parked on the canals (one even had a light aircraft on a barge)! Surely part of Florida’s unemployment statistics includes alot of ultra wealthy retirees?
Miami was also teeming with activity, I believe the Ericsson Tennis Open is on currently. Admittedly, we probably went to the nicer areas ie. Miami Beach, Bricknell, Coral Gables. After driving around the streets, we soon realised the scale of the market here in South Florida, which is quite difficult to grasp when you come from a small population, that is Australia. There are so many more people here, and people need to live somewhere, so consequently the property market here is HUGE!
Question: Does a Visa debit card help build up a Credit Score? I thought you need to use actual credit to do so? I’m having difficulties getting a Credit Card (because I don’t have a Social Security Number), but have no problems obtaining a Visa debit card a.ka. pre-paid Mastercards. Even Costco rejected me!
Your Aussie dollar can certainly buy you ALOT more here in the US. Despite some great points on this thread about the current state of the property market, I’m feeling quite optimistic.Treasure HunterParticipant@treasure-hunterJoin Date: 2010Post Count: 47
re : your question about debit cards. My understanding is that they won’t improve your credit rating.
However, some banks are offering secured credit cards, which do.
Not sure how you’ll go getting one without a SSN, but being secured (against a savings account), you might have a chance.
Fifth Third have one. Here’s their website link : –
There’s a branch in Fort Lauderdale.
Let me know how you go trying to get one, as I’m interested in them for the same reason.
I have a secured visa card but needed to deposit the nominated limit on the card as security. No savings account was needed. This is not a card that is easy to obtain and several others have been rejected. I’ve had a checking account for two years and believe this is why I was approved where others have been rejected. I also have a personal loan that is helping my credit score. For this I needed to deposit the amount of the loan into a fixed deposit account as security, borrow the same amount and pay this back. I earn interest on the amount in the fixed deposit but it is less than the interest paid on the personal loan and as I only need this for six months to generate a credit score I’m not concerned about this cost of doing business . It’s run for five months now so I am almost ready to pay out the loandhillon2Participant@dhillon2Join Date: 2007Post Count: 26
Thanks for the advice TH and Judith! Much appreciated.
Since writing my last post, I’ve driven across Alligator Alley to see the South West coast of Florida ie. Cape Coral and Fort Myers. Apparently the South East of Florida is about 1-2 years behind. I can now testify to the serious effects of the US economic downturn.Treasure HunterParticipant@treasure-hunterJoin Date: 2010Post Count: 47dhillon2 wrote:Thanks for the advice TH and Judith! Much appreciated.
Since writing my last post, I’ve driven across Alligator Alley to see the South West coast of Florida ie. Cape Coral and Fort Myers. Apparently the South East of Florida is about 1-2 years behind. I can now testify to the serious effects of the US economic downturn.
Glad the tip about the secured credit card worked out.
I heard you on Thursday night on a Skype webinar event (I had my mike muted – just a listener). I suspect we have some friends in common.
I’m going to be in Miami in early May (arriving May 3rd). Would be good to catch up for a coffee if you’re free. Your profile is not accepting PM’s, so drop me an email if you’re free : [email protected].
Cheers, MarktanzaustinMember@tanzaustinJoin Date: 2011Post Count: 3
any advice re fla and vegas I would be happy to assist
I've been in Miami since the end of January 2011. I stuck with my Dream House (a waterfront property in Surfside, on the northern end of Miami Beach), and after waiting a full 7 months while the property was dragged through court, we were finally able to purchase it at the end of July. It was an REO (foreclosure) and I paid way above the asking price. I'm convinced it's worth at least $100K more than I paid, even if I sell it without doing any work (actually, I think I could get $150K more, although I'm not even slightly tempted to sell). Since I intend to keep the property for many years, perhaps until I'm on my deathbed, I've begun serious renovation, which entails replacing both bathrooms (at a cost of $5K each) and the kitchen ($9K), and turning the garage into a 3rd bedroom/bathroom (20K). I'm also planning rebuilding the dock and seawall (20K and 5K respectively), and putting in a pool (20K). I intend to use this property as my base over the next 2 years while I make many more purchases.
I've also bought another property in Shore Crest for $133K. It has a pool, vaulted ceilings, 2500 square feet, and many other pluses. Minuses are that the area isn't as renowned as Surfside or Miami Shores, although it's not a bad area. It's just a one minute drive from one of the bridges heading over to Miami Beach, so if you're a water lover it's well situated.
To sum up my Miami Adventure since first flying here in October last year:
I still love this city. The weather from October to June is phenomenal. Warm and sunny every day. Right now it's hot, but if you're living near the beach it's not too bad.
Buying property has been far harder than I'd imagined, although perserverence has paid off.
There aren't a lot of REO's hitting the market. I've heard rumors that Obama has put pressure on Fannie Mae and Freddie Mac to keep REO's off the market until after the election next year. This would seem logical. I expect that he'll come out with another property stumulus policy (eg. a tax break) to push up prices over the coming year, thereby ensuring his re-election. As soon as he's re-elected, he'll allow Fannie and Freddie to dump the enormous backlog of REO's, which will bring down prices in 2013. But considering how hard it is to lock in a good deal, I still recommend investing in any property that speaks to your heart. But again, there's no need to rush things.
There are great deals out there, but one needs vigilance, patience, and presence (there's no way you're going to get amazing deals unless you're here).
Renovation costs are roughly 10 times the price of China. It's been quite a shock. However, if you buy sensibly you should easily recuperate your expenses.
The ONLY way to buy REO's is through the listing agent. Don't bother using an agent who isn't the one who will be submitting all the offers, since you won't know how high you'll need to bid to secure the property for yourself.
Short sales are becoming a much more feasible way of buying distressed properties than they were last year. Banks are agreeing to short sales much faster than before, and for much lower prices.
I've noticed some regular sales (Ie. not short sales or REO's) that went through at phenomenal prices. I house near mine in Surfside sold (as a regular sale) for $220K in June, and the following month the buyer flipped it for $280K! The lesson is that it doesn't matter if it's an REO, a short, or a regular. If you know the market and you make lowball offers regularly, sooner or later you'll hit the jackpot. I believe that I have, twice!dj_ajayParticipant@dj_ajayJoin Date: 2011Post Count: 15
How did you go with getting finance or did you pay cash for the Surfside house?
I've paid cash for both properties. The reason for paying cash is not because foreigners can't get financing, but because NOBODY can get financing when buying REOs. All banks have stringent criteria when granting mortgages, the most important being that the house is move-in ready. REOs never satisfy this criterion. This means the only way to purchase an REO is with cash, and then apply for cash-out financing after the purchase. I haven't done so yet on either property, but intend to do so as soon as they've been fully renovated.British Buyer wrote:Hi Ajay
I've paid cash for both properties. The reason for paying cash is not because foreigners can't get financing, but because NOBODY can get financing when buying REOs. All banks have stringent criteria when granting mortgages, the most important being that the house is move-in ready. REOs never satisfy this criterion. This means the only way to purchase an REO is with cash, and then apply for cash-out financing after the purchase. I haven't done so yet on either property, but intend to do so as soon as they've been fully renovated.
Cash out financing can be tricky. banks worry about people taking cash out of the deals then walking.MosquiParticipant@mosquiJoin Date: 2010Post Count: 43
Once again thanks British Buyer to share your experience with the forum, this information is better than any book anyone can write. As many other people here I’m thinking to buy property in USA and still trying to get info and see when I can fly to see some places, so still doing more research and I hope I can get something done this year but time is very hard to find for me at the moment.
I have a positive cash flow property in a mining town and I hope I can share my USA experience here soon, so I can help more people with investing.
Thanks again and good luck.
Mosquidj_ajayParticipant@dj_ajayJoin Date: 2011Post Count: 15
Michigan, Georgia and Florida all have over 10% unemployment…I was looking into these states but now I am not sure….sundirtwaterParticipant@sundirtwaterJoin Date: 2008Post Count: 25
Thanks very much for all the information in this thread – its fantastic!
I’d very much appreciate if you were able to continue to update us with info on the houses you are currently looking at and your experiences.
Also, could you give some idea of what a) a SFH needing reno work on Miami Beach that you could pick up for $250k would rent for and b) how easy/hard is it to get tenants?
when you look at 10% unemployment that means 90% of the people are working.
Not sure how it is in other countries. But depending on the area of the US. 5% just never work other than drift from manual labor jobs etc. Then other areas like Detroit there are interesting stat's on the number of people that will never work as well and its a staggering number.
I live in Oregon, and of course no one really talks about the Pacific Northwest on these forums. Our market in the metro area did not crash like these other markets but we did see 20 to 30% price compression accross the board. With the High end homes those 1.5 mil to 5 mil really take a beating.
Then you go to central Oregon (Bend) and you have the same melt down that happened in other areas of the country and unemployment in the 20% plus range.
Point being Oregon has one of the Highest unemployment %'s in the country yet the property values in the major metroplex's held firmer than other areas with lower unemployment.sundirtwater wrote:Steve, Thanks very much for all the information in this thread – its fantastic! I'd very much appreciate if you were able to continue to update us with info on the houses you are currently looking at and your experiences. Also, could you give some idea of what a) a SFH needing reno work on Miami Beach that you could pick up for $250k would rent for and b) how easy/hard is it to get tenants? Thanks
I'm looking at houses in the $120K to 350K range. If they're at the bottom of this range then I assume they'll need at least 100K to renovate, which means a real price of around 220K. There are two reasons I'm sticking with this range:
1. It's easier to get financing for houses in this range
2. You'll be renting the house out for about $2K to 3K a month, which means a much higher standard of tenant – someone who will hopefully pay on-time and not destroy the house
When I'm shopping for houses I always consider the rental income, and always use the 1% rule, meaning I make sure that the estimated monthly rental income is at least 1% of the total house price. So if I'm looking at a house for 200K that needs the bathrooms and kitchen remodeled (that'll set you back a total of 20K) then the total house price will be 220K. If I don't think it'll rent out for $2,200 a month, then it's a bad deal.
It's good to use zillow.com to get a rough estimate of the value of the house, and the estimated rental income.
When buying in certain suburbs (particularly Miami Shores and Biscayne Park) you must be careful not to buy a house that has any illegal additions. The most common illegal additions are when the garage has been converted into a bedroom plus bathroom. In the areas I just mentioned you need to get a permit from the government (called a Reoccupation Permit) after you buy the house. An inspector will come to the house to check it out, and if they see illegal additions (meaning changes made to the house without using an architenct, structural engineer, licensed electriction and plumber) then you'll need to bring the addition "up to code" or demolish it completely. I've come across many such houses, in great areas, selling for almost half their estimated value simply because people don't want the trouble that comes with illegal additions.
The rental market is very strong here in Miami. There is a shortage of rental houses, simply because so many people have lost their homes due to foreclosure and they now need to rent.
A lot of people on this site want to know more about financing. I haven't tried yet, but the info I've gleaned from lenders is this:
If your house is worth more than 100K you will most likely be able to get a mortgage (just ask any realtor to introduce you to a mortgage broker, who will then introduce you to a lender, but they'll charge up to 2% of the mortgage amount in commission, which they call an Origination Fee). If you want to get a pre-purchase mortgage (ie. apply for it during the buying process) then you can borrow up to 70% of the purchase price. If you want to get cash-out financing (which means paying in cash, and then applying for a mortgage after you purchase) then you can get up to 50% of the purchase price. However, if you apply for cash-out financing within 6 months of purchasing then they'll still treat it as a pre-purchase mortgage and still lend you 70%.
Very important is to know that they won't necessarily lend you 70% of the price you've paid. They'll only lend you 70% of what they think the house is worth. They ascertain the value of the house by making you get (and pay for) an appraisal. This is simply some idiot working as an appraisor coming round to look at the house and telling the bank what he thinks the house is worth. The cost of the appraisal is about $400 to $500. Don't be surprised if he appraises your house a lot lower than what you've offered, especially if it needs renovation. Let's say you've bought a house for 300K but it needs a new kitchen, bathrooms, a paint job, and some landscaping work. These changes will cost you about 30K, which means you'll end up spending 330K. However, the appraiser will most likely take the cost of a similar home in perfect condition (let's say 350K) and then come up with an appraised value of 70% of that, namely 245K. He does this because he's an idiot and has no idea how much it really costs to fix up a house, so to cover his back he just multiplies the cost of a similar but perfect home by 0.7. The problem for you is that the bank will now only want to lend you 70% of the Appraised Price, which is 171K. So instead of being able to borrow 70% of what you've paid you'll only be allowed to borrow about 50% of what you've paid.