USA property investing can be very rewarding. I have been investing there for quite some time and I am intrigued about the power of high returns. I am urging everyone that is considering investing in the US to take note of the following:
Never buy property that needs rehabbing, regardless of price. It will cost you more in the long run and it is not worth the headache.
Use smaller companies with lower inventory. The reason for this is that there is NO WAY if a company has 40 properties available at once that they are able to efficiently manage them. Those companies focus on selling rather than providing a service to their clients.
Find companies that offer financing (this is how I started). You can make a 15K down payment and have the rent applied to paying off the balance. This is an excellent way to leverage and your returns sky rocket after the loan is paid off.
Do not attemp to buy bulk packages. Some properties are on demolition lists in cities that are revitalizing their neighborhoods. CHEAP
IS NOT ALWAYS GOOD. Some of the cheap properties are shells….no furnace, plumbing, electrical, hot water tank, etc. You will end up spending more than the property is worth in repairs.
Property management companies….if the seller of the properties do not manage that's not good. Companies sell but after that they
have minimal control over how well the management company performs their duties.ALL IN ALL GO WITH COMPANIES THAT ARE THE DIRECT SELLERS, PROPERTY MANAGERS, AND OFFER FINANCING SO THEY HAVE AN INTEREST IN THE PROPERTY. START WITH A LITTLE INVESTMENT AND SEE HOW IT GOES FIRST BEFORE PUTTING MORE IN. GOOD LUCK PALS.
Declan
http://www.ushomes4wealth.com.auOn the contrary, I would run a mile from any company offering ‘finance’. The only realistic finance you will get in subprime areas is from hard money lenders and I would suggest the ‘majority’ of the financed amount is profit for the company itself and little to do with the actual property.
The more ‘products’ they offer, the more opportunity they have for excessive profiteering.
If you are buying an LLC, it IS a flip. Make sure you are comfortable with the money the company is making from you. You will (and I mean will) be paying more than you need to, so be certain you want to do that.
I would also be deeply suspicious of any Australian company offering property management. Rental guarantees, guarantee nothing but would suggest to me that you have provided the company you bought through with enough profit to pay you a rental amount from the purchase price itself.
also Declan i notice that most of your properties are in Detroit. Could you please explain why Australians should invest in this third rate market. Perhaps I am missing something
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lawsjs wrote:On the contrary, I would run a mile from any company offering 'finance'. The only realistic finance you will get in subprime areas is from hard money lenders and I would suggest the 'majority' of the financed amount is profit for the company itself and little to do with the actual property. The more 'products' they offer, the more opportunity they have for excessive profiteering. If you are buying an LLC, it IS a flip. Make sure you are comfortable with the money the company is making from you. You will (and I mean will) be paying more than you need to, so be certain you want to do that. I would also be deeply suspicious of any Australian company offering property management. Rental guarantees, guarantee nothing but would suggest to me that you have provided the company you bought through with enough profit to pay you a rental amount from the purchase price itself.Lawsj, My thoughts exactly,
I was recently offered finance again, what I see is just another layer of expenses, outrageous fees and risk that will sink the average investor.Decan, I presume Citi Bank is the lender
Cheers, WI
My intention on this forum is to inform my fellow citizens and not to tell anyone where to invest. I am using my previous negative experiences to educated people about what to look for. As for myself, I have been investing in Detroit for the past few years. The cashflow I am seeing is amazing and it outweighs any upside potential. Even if there is zero growth I am close to recouping all my capital on some deals……and not only me. My friends, my relatives, my associates. I have to stress on the management aspect. Most people fail because of bad management and there is a lot of dishonesty in the property management field. I found that companies manage properties from computers. Unfortunately that does not work these days. I have been through my learning curve and I am here to share my thoughts and give some advice.
We advertise for renters and have gotton 2 calls this week only from people out of the state of Michigan looking for homes to rent because they just got hired. The fact is that tenants are paying and I have paper trails on my properties. The problem is when a house has a problem and the property management company fails to address it then tenants stop paying. You get a month's security deposit and eviction takes a month. Risk is very low. There are not enough rent ready houses for the demand we are getting from tenant market. Here are some more facts:Consumer Bankruptcies are decreasing in Detroit
Ford to hire many new employees in Detroit and other U.S. cities
Detroit’s Plan to Stimulate the Local Economy and Create more Jobs
Abundance of Section 8 Tenants
Citibank is lending now to acquire US property. Call them to find out their underwriting guidelines. I know it is not based on the property to purchase but they may need some sort of collateral.
At 5% over 3 years you will pay $1000 interest and all property taxes and management fees will be paid by seller.
Aside from several layers of obvious rorts in the purchase scenario, I put it to you directly the ‘property management’ you speak of will be nothing more than a complete disaster for anyone. Either you are directly advertising or you simply do not have a clue as to how much money you have lost.
TO BOBBY 25
This is you post with my remarks, as I invest in Detroit and I'm a first hand (direct ) seller.
My intention on this forum is to inform my fellow citizens and not to tell anyone where to invest. I am using my previous negative experiences to educated people about what to look for. As for myself, I have been investing in Detroit for the past few years. The cashflow I am seeing is amazing and it outweighs any upside potential (IT IS THE MOST UNIQUE IN THE WHOLE WORLD). Even if there is zero growth I am close to recouping all my capital on some deals……and not only me. My friends, my relatives, my associates. I have to stress on the management aspect. Most people fail because of bad management and there is a lot of dishonesty in the property management field.(HARD TO FIND RELIABLE PROPERTY MANAGEMENT COMPANIES IN DETROIT. I AM LUCKY TO HAVE ONE OF THE BEST IN THE AREA. THEY DIDN'T HAVE A SINGLE EVICTION IN 14 YEARS . THIS SAYS SOMETHING) I found that companies manage properties from computers. Unfortunately that does not work these days. I have been through my learning curve and I am here to share my thoughts and give some advice.
We advertise for renters and have gotton 2 calls this week only from people out of the state of Michigan looking for homes to rent because they just got hired. The fact is that tenants are paying and I have paper trails on my properties. The problem is when a house has a problem and the property management company fails to address it then tenants stop paying. You get a month's security deposit and eviction takes a month. (NOT NECESSARILY. A GOOD ATTORNEY SPECIALIZED IN EVICTIONS CAN GET YOU ANY TENANT OUT IN 7 DAYS.) Risk is very low(WHAT IS THE MAJOR RISK – IN CASE YOU CAN'T RE-SELL YOUR PROPERTY YOU ARE STUCK WITH IT FOR EVER AND MONEY FOREVER AS THE VACANCY RATE IS ALMOST 0 IN DETROIT AREA). There are not enough rent ready houses for the demand we are getting from tenant market.(EXTREMELY RIGHT!) Here are some more facts:Consumer Bankruptcies are decreasing in Detroit
Ford to hire many new employees in Detroit and other U.S. cities (YES, RIGHT, DETROIT'S CAR INDUSTRY IS BOOMING RIGHT NOW, BUT IN ORDER TO LIVE IN DETROIT CITY ) YOU HAVE TO BE BLACK; ALL THE CAUCASIANS ARE LIVING IN THE SUBURBS, WHICH ARE A LITTLE BIT MORE EXPENSIVE, BUT I KNOW CITIES IN DETROIT METRO WITH PLENTY OF PROPERTIES OFFERING THE SAME CASH-FLOW AS DETROIT'S
Detroit’s Plan to Stimulate the Local Economy and Create more Jobs
Abundance of Section 8 Tenants SECTION 8 HAS AN ALMOST 2 YEARS BACKLOG – NOT ENOUGH HOUSES COMPARED TO THE NUMBER OF PROSPECTIVE TENANTS.
See my comments at https://www.propertyinvesting.com/forums/property-investing/overseas-deals/4344313.
Ciao guys
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