Guarantee Safe US Investing???

Engelo:
I am always concerned over the "guarantee" term.  I think the best way to establish your own peace of mind is traveling to the U.S, using your travel expense as a tax writeoff and meet with people.  At the end of your trip, go with your instinct of who can be trusted the most. 

Even the best property managers in the world can't guarantee anything.  And if you are talking about rental guarantees from the seller which I have seen a lot, you likely overpaid for the property. 

There are a ton of trustworthy people here in the U.S contrary to a lot of jokes we use here.  A lot of us are smart, personally invested, and have an actual passion for our scope of work

You need to do your own due diligence on not only the markets but also who are the suppliers you are dealing with.
You also need to ask yourself Why do you want to invest in the United States. Then if you do what is your strategy. In my opinion the only reason you invest is to have a separate income stream to what you have in Australia. Once you have decided that you then look at the markets. If all you can afford is a $30,000 property then don’t brother you will be buying into a slum.
I think Texas but there are other markets/ Once you decide on the market the most important thing is who are you dealing with. Go over at least once to firstly satisfy yourself as to the market and the type of properties you are looking at and to also make sure that the supplier is in fact in the city you are dealing in. If you are not prepared to do these things then you should not start buying.

I am with Cheeves on this one…..don’t like the word “guarantee” as part of the equation. Nothing is guaranteed in life and that most definitely extends to property investing no matter if it’s in Australia or the USA.

But for the sake of the exercise and to get things rolling along as you intended I have already purchased 3 properties so far with more planned. Not large compared to my Aussie property portfolio but small steps I guess.

No1. This is a commercial block of dirt of which I am 1 of 10 members in a LLC that owns it. Located along Houston’s energy corridor where all the big multi-national companies are located. 2 acres with no return but we are all in  a position to hold it and the plan is in the next 12-18 months to build a commercial property to cater for the medical precint located all around us. Longer term hold. I won’t elaborate on this transaction as it is not the norm for people on this forum. Didn’t use any company based in Australia….this was all people I already met, knew of and trusted but the reality is…I don’t need a team for this one at this point in time.

No2. This was a single family home located north of Dallas. A local builder was able to build brand new for me at a cost that matched existing homes that I could have bought or refurbed. He was an experienced investor himself and had a large enough portfolio that it required his own full time property management that he set up. I came under the same management team. I was able to get finance from a local bank in town that the builder knew. Again this wasn’t through a company….I was introduced to the builder from another Aussie who had been through the same process and had recommended him to me. Reflecting back it was about as turnkey you could get without it being a turnkey operation. I set up all my own LLC’s etc and was in the US to open bank accounts etc. The builder was even able to give me a $5000 rebate on the contract on completion so I ended up with money in my bank account after it was all done. Am I happy with the service and outcome so far ?? I can honestly so I have had no issues at all with the home. Rent is paid on time each month, property inspections go down well (the good thing about a new home was the builder needed access to check on things at random so in the tenants eyes it wasn’t a formal inspection by the Property Managers). Money goes into my bank account and the bank takes the repayment out…nice and simple. Would I do this investment a second time round…..honestly I don’t think I would simply because I don’t think I would have 2 properties in the same location. (Even though I thought it a good omen that the local private college has a Kangaroo as their mascot !!)

No3. This was again a single family home but in Dallas itself this time.  I used a turnkey company after doing some due diligence.  If anybody hasn’t read any of my earlier posts…I actually got a job with MyUSAProperty when they began….not that I wanted a career…I thought it would be a great way to see what they knew & I perhaps didn’t. I was in a position in life that I wasn’t working full time so had a few weeks to kill to run through the training (brainwashing) programme for new recruits. My god I thought I had stumbled into a time share conference with the heavy sales tactics and processes. Even found out that the trainer was from the timeshare industry after a couple of days. These guys were not the slightest bit interested in what their clients purchased…they just wanted the sale and move on to the next victim. The pressure to get a sale was like watching the movie “The Boiler Room”…no joke. It did teach me something….the Aussie based buyers agents are so reliant on what the US based wholesalers tell them cause they have NO IDEA about where their homes are or what area’s are good or bad. I left after the training much wiser but I have to tell you….freaking out about all the clients these guys have led up the path when they were around. Anyway you get the idea…I had a pretty bad taste in my mouth from that experience so made a conscious decision not to have anything to do with an Aussie based buyers agent…they are too far removed from reality. I found a company based in Dallas that actually owns the properties they sell and provided me with homes that were refurbished and leased already. Finance referral to a local bank was made where I was financed as a foreign national with a 30% downpayment. I have the place leased through their own property management company. My only issue to date has been a dead shrub in the front garden….the HOA took offence to it and issued me with a notice to replace it or I would be contravening the by laws. I got in touch with the PM and it was replaced in 24 hours and the tenants put on notice to water the garden. Early days I guess but I am happy with how things are going to date.  As an owner I have access to a web portal where I can download copies of lease agreements, see when the rent was paid by the tenant, see when it was deposited into my account and ask questions and get replies from the PM. Pretty convenient when I am on the other side of the pond.  I used Peter O’Reilly from Texas Cash Cow who contributes to this forum….don’t normally give someone a plug but if they do a good job……Most likely to use him again for No4. He isn’t based in the US himself but the company is and they don’t exist purely to have Aussie investors…they cater mainly for the US investor.

But back to your question….can they guarantee my investments are safe and well looked after to their best abilities…..I don’t think anyone can honestly. I haven’t been able to find anybody in Australia that does so would take it for granted they wouldn’t be found in the US either. Sometimes the investor needs to be accountable for their own actions. That still comes down to actually going over and having a look at where your planning to invest and what you will get for your dollars. Meeting the people that will partner you and seeing how they operate gives many advantages. Ask to speak to other clients is something I always do as well.

Hope this all helps.

Byron