Two Asian Clients went on a trip to the US after purchasing properties on the internet based on what they saw on Google Street View. They were highly disappointed. Make sure you have someone here to be your eyes and ears. Do your research and go with a company that offers management “in house”. We had a list of 50 properties as a bulk package. When our guys went out to cherry pick, the ones you thought were the best turned out to be the worst. Companies that make money off of management after selling their properties are often good because their commissions depend on the rental income. Look for those companies. Also…..pay attention to companies selling US Real Estate and their services offered. You may want a complete package so there is better accountability. Search the internet for reviews about the company. You will be amazed at what you find.
Cheers,
Declan
http://www.ushomes4wealth.com.auThere is a lot of money to be made in US Property market. However, there is also a major risk. Two Asian clients bought off the internet from the MLS. They selected the properties based on the Google Street View and went to the US after about 6 months to see what they acquired. They were highly disappointed. The cheap prices and properties being bought as “fixer uppers” can become the biggest nightmare for overseas investors. You need someone on the ground to be your eyes and ears and provide full service. A company that manages the properties they sell is highly recommended since they have an interest in the property. If no rent is collected, no money is made on management. Do a search on the company for reviews. It will help you in selecting the right company to deal with. One that has a local Aussie agent is a plus since you can approach them easily if you have a problem. GOOD LUCK WITH YOUR NEXT PURCHASE. MAKE SOME MONEY.
Cheers,
Declan
http://www.ushomes4wealth.com.auGoogle earth Street view many times is not the right house..
Google is great just like trilla and others for generalities but not specific info.
One who buys a house based on Google earth is buying site unseen
JLH
Looks like John Patchin of REWHOLESALEKING in Kansas City has gone to ground again. He promised to transfer the title to the property he owes me money on into my name but he was just stalling for time. Again he has refused to return my emails. He is a slippery snake all right. I guess my money went into the casino like all his other victims. H also has other aliases and companies such as Greater KC Homes. His $1 company is Amstar Investments. You can read about Amstar Investments here:
http://www.scaminformer.com/scam-report/amstar-investments-amstar-investments-llc-c34722.html
I guess the moral is, trust no-one.
llovehouses,
does not appear to be the same individual.. Moral of the story is the same… many hucksters out there promising the moon… Reality is these are undercaptialized con men that know enough to facilitate what appears to be a legit transactions and of course with all the hype about 25 to 30% returns in the US…. I can see where people off shore pull the trigger on these.
From the documents that I have reviewed Mr. Patchin simply needs to sign one of two types of transfer deeds and record them. And your all set. You then become the proud owner of your collateral.
1. Deed in Lui of foreclosure, this will wipe out your Note and you cannot sue on the note later but you get the property. Now as a lender when I have taken properties back with a DIL I issue a 1099C and or threaten to do that When they understand the power of the 1099C it has resurrected dead loans for me……….. A 1099C then is sent to the IRS and guess what happens the amount of the debt you forgave becomes ordinary income to this dead beat borrower… And then the IRS will take up the hunt… And they are nasty boys to deal with… So you can get a little bit of satisfaction. AND you can write the entire loss off on your US tax return and then however you handle the transfer to OZ… Now not sure if you used your super fund for this and how that plays out.. But if its cash I would think the above works… I have 1099C many a borrower who then screamed like stuck pigs.. They would not answer me.. But they get that 1099 and the next thing you know they are on the phone…. One borrower I hit with all most 300k.. So at the end of the day he had a 100k plus obligation to the IRS…. he would have been far better to just stay in my loan and work it out.
And if I had written this deal up and the Note I would of course had a default clause that allows me to charge default interest back to the day the loan was made and many states allow 25 to 30% for default interest. So your 17k loan all of a sudden is 30k plus
2. Warranty deed back to you and you re-convey the Deed of trust upon the resale of the property.
Both of these can be prepared by a title company or lawyer for nominal fee and recording should only be 20 to 30 buckaroos.
Also recommend if you have not gotten any pictures of the property yet.. To go ahead and hire a RE broker to give you a BPO that will cost you a few dollars but will give you pictures and a reasonable expectation of its current value IF ANY.
Sadly so many of those that are having these issues are just working with amateur wannabees be them OZ or US … that’s the simple truth from my perspective they do not even know what documents mean or what to use with what transaction.
He has promised to get the transfer of title notarized tomorrow. We’ll see….
llovehouses.
then go on line to the IRS site… Look up 1099c and then print one out and send in what you know of this guy.
I suppose when you lent him the funds you got a credit check and on that credit check is his SS… once you have the SS you just fill it in on the form mail it in… Inlcude the default interest your due send in the whopper 35k plus 1099… and Mr. Patchin will have real fun with the IRS and it will probably curtail his borrowing money from anyone.
Let me know if you follow up with this… You talk about a nightmare for Mr. Pathchin this will do it.
Ilovehouses wrote:He has promised to get the transfer of title notarized tomorrow. We'll see….when he has said document… Please let me look at it before you record it.
JLH
Way ahead of ya Jay, took pictures the other day.
I know the Title company and am keeping my eye on the process.
Cool my work is done here.
If you can help LLovehouses with the 1099 that may give him a little satisfaction
Also it could be a win win of sorts.
He can file the 1099C have it roll to OZ which I think he can do… then sell this property get all or more of his cash back take the loss now then recapture as needed or wanted…
I'm waiting to see if the rehab was done correctly for the amount of money, he is far from out of the woods.
There are a lot of trusted sites in the field of real estate listings. We have Zillow, Trulia, Realtor, Remax and others. These sites may cover listings for several countries.
Kyler,,,keep me posted,,,,,
In my lending days.
Any way I think we will find one of 3 things:
Experince took draws and : ( never did any work) I learned quikly on this one that I needed to hire independant inspectors to do 4 draws per rehab…..borrower did not like it but hey at least I got a( from a first class rehab to one that was up to local standard)…..
there will have been some absolutly bottom of the barrel rehaber gave it the good Meth try……can prove some work but its piss poor
And or last… a combination fo the above and add some one living in the proerty probably without any lease.
Kyler let us know which one of the 3 it will go along way in percieving Mr. Patchins SOPS and MO
JLH
avest50 wrote:There are so many sites on the internet about purchasing U.S property. Some people say its a great opportunity and others say its a scam… Who can I trust?One of the many problems that unwary buyers get caught up in, is that there are so many US Property Supply Companies who are either trying to self promote on forums such as this and through other social media sites, as well as working together with many local agents selling their properties over here.
One of the problems is that many are just in it for the quick money they can make from unwary foreign investors, and many are really agents themselves over there.
When a company is selling properties in a large number of States or even in cities in the same State, I don't care who they are, it's almost impossible to have expert local neighborhood knowledge, down to the Zip Codes and even the streets, I do know of one company that does actually buy every property they sell in different States and are very knowledgeable in the areas they sell in, but that is an exception rather than the rule.
But if dealing with companies that are located in the same areas that they also sell in, are professional investors themselves in the same areas they sell properties to investors, and have the expertise in the local neighborhoods, and have been established for a number of years in that location, then you will at least be purchasing with experts who know the business and also know the areas.
It takes years to establish themselves as a wholesale supply company, ( called 'Asset Teams' locally ) and years to establish their connections and sources with realtors, the local county offices, tradespeople, etc, to get the very best sources of properties and have everything set up properly, all so you don't have to. The new individual buyer just can't compete.
So if looking to find a reputable and transparent company to buy from, then when talking to any agent over here, you should also find out a bit about the company / companies the agents are representing. always ask questions.
Hope this helps you sort out the good from the bad to buy through or from.
Jeff
Jeff
Great advice.I promise you that the next time I want to buy a modular home in Kansas or something that was bought for 19,000 in March of 2011 and pay 56k with 50% down (28k) , be charged over 8% for the pleasure and pay 10% in ongoing property management, you da man!
Is that how you do the maths? 10k over what you paid for the property = down payment
Tenant in place is the only thing I am confused about… Why would you put a tenant in this stellar modular home…. if I were you I would leave the place vacant or offer to one of my workers to live for free in it…… Tenants would destroy the asset…
I would alter the model like this…. Just pretend you have a tenant at $700 a month. Get $70 plus the $200 odd interest per month and do nothing. Call the initial $10k profit as seed money….using $7000 of it to demonstrate first years income. Replicate adnauseum……your clients will be delighted….. They would boast about what an amazing hassle free property they have…. For the remainder 2 years of the loan, just shove someone in for $500 a month…. Or, after year 1, just take the property back if they default on loan….
Not a bad way to make an income….for yourself.
Yep, ask questions. Lots of them.
Emma
Emma,
that is how most vendor financing deals work in the US. If your buying from a turn Key marketing company…
If you think about it from the sellers stand point. Like you said pretty good deal… make your initial costs back on the down payment and the note is pure profit.. Most of these guys will then sell the note on the secondary market and cash out completly and be down the road with no tie to the property
Jayman wrote:avest50 wrote:There are so many sites on the internet about purchasing U.S property. Some people say its a great opportunity and others say its a scam… Who can I trust?One of the many problems that unwary buyers get caught up in, is that there are so many US Property Supply Companies who are either trying to self promote on forums such as this and through other social media sites, as well as working together with many local agents selling their properties over here. I guess we might see some things different . I own an investment company here in the USA. Being I teach investors through seminars , radio shows , and answering questions on forums like these.( on how and why to invest ) So this is a valuable tool for some , while others might have a different agenda here. It also helps me keep my mind sharp on what I am doing. Actually we just landed a fund so working out details but from the look of it. We most likely will be pulling 75%of our new homes to the fund. This is common for most big USA resellers finding large funds to come in and hold. I personally know of 6 different states that these funds are now buying in.
One of the problems is that many are just in it for the quick money they can make from unwary foreign investors, and many are really agents themselves over there. Real estate is not for the faint of heart and should not be taken lightly. This is not a get rich scheme this is long term wealth one house at a time .
When a company is selling properties in a large number of States or even in cities in the same State, I don't care who they are, it's almost impossible to have expert local neighborhood knowledge, down to the Zip Codes and even the streets. I disagree in my market we buy in a 60 mile radius.On the SC side where my office is located I would be willing to put my money where my mouth is.As I drive you up each road i can tell you about most every single house in each area.We personally own homes on most streets that our clients own. Buying and selling in Multiple markets for me a concern to hard for one one to know everything in one market none the less multiple markets . They have to rely on multiple teams like myself.
I do know of one company that does actually buy every property they sell in different States and are very knowledgeable in the areas they sell in, but that is an exception rather than the rule. That is rare not saying it can not be done there are people on here like Jay who does multiple states. Now I do buy in other states for my self.I am buying in Florida ( Sarasota )not to sell just for my own portfolio.
But if dealing with companies that are located in the same areas that they also sell in, are professional investors themselves in the same areas they sell properties to investors, and have the expertise in the local neighborhoods, and have been established for a number of years in that location, then you will at least be purchasing with experts who know the business and also know the areas. Very true statement there is a reason some of us are still here buying , selling after the crash.
It takes years to establish themselves as a wholesale supply company, ( called 'Asset Teams' locally ) and years to establish their connections and sources with realtors, the local county offices, tradespeople, etc, to get the very best sources of properties and have everything set up properly, all so you don't have to. The new individual buyer just can't compete. True no one can step in some one"s back yard and find the deals and have the network set up.
So if looking to find a reputable and transparent company to buy from, then when talking to any agent over here, you should also find out a bit about the company / companies the agents are representing. always ask questions.
Hope this helps you sort out the good from the bad to buy through or from.
Jeff
Some good advice and been almost two weeks since I been here so will be doing a lot of follow up post tonight.
talk soon
Alex its kind of ironic though with the above post…
I think we can all agree on this,,, what I don't understand is how someone from OZ ( and please no offense to those who's business it is) can just one day decide to be in the house flipping business in the US….They will go through the same learning curves as any other business person.
Its just they do it with investors hard earned money.
And Jayman is completly correct there are very few people of my experince level and skill in the SFR business ( could not help it) I know my markets and my product period and I pick my team for the same reason. Having made over 2000 loans in 20 different markets in the US over the course of a 30 plus years you get to know where the hoods are and where to invest and not to..
But hey I have lost on some deals for sure… Like I posted I did not get totally out of detroit before it cratered and then there is the stuff no one can do anything about…. You buy lend or what have you at 100k and the property devalues to 30k whatchya gona do. For me I income averaged and figured out a way to buy 100's of them at the 30kkk … Others sold lost and are doing other things.
There is absolutly no question that the bigger funds are going to give the SFR market a run here… Time will tell how well they do.
The main motivation for these funds is not cash flow its important but they are buying for Capital growth… And of course if you have 3 or 4 funds all decide they have to have Atlanta well there you go… Tomorrow is auction day in GA so I will be interested to see how that plays out the one fund I am close with is trying to buy 100 plus homes tomorrow. while I will be tickled pink if I can buy 2 to 4 at auction then another 2 to 4 through other REO means… at the end of the day 4 houses of MY choosing in MY neighborhoods and I can't be happier.Jay
The bottom line is that the Oz based flippers shouldnt “just decide” and their naivety will probably in the long run stand them afoul but will be protected by the “caveat emptor” and unenforceable real estate laws. For me though, the
US alternative Of the Oz spruiker is very scary…that is a big game for a newbie to be eaten alive in….. Ie the bigger problem is the same way that you and I may know PRECISELY how vendor financing deals work, most people from Oz seriously don’t and seriously get burnt. They haven’t played with the big boys, would be lucky if they understood the difference between a modular home and real property and are being “sold” versus entering into something with absolute transparency and THAT scares me. I love talking to you guys but I wouldn’t say there is a night that doesn’t transpire that I am not explaining to someone what a HUD statement is, what MLS means or going over what a faucet is versus a tap or or or…. Breaking down vendor financed deals to Australians desperate for the holy grail of FNAP financing below 500k is a NECESSITY.So, what to do?
If this is your first property in the States how about you buy a nice suburban home near good schools that isn’t scary via a real estate agent…. Wet your teeth, learn the system and if you decide after that you want to delve further, go for it…. But make your first experience with someone who genuinely cares…ABOUT YOU…… Not a wholesaler who is looking to sell 1,000 properties by the end of the year…..
This is a learning curve of language, of acronyms that just fly around… POA’s, US notary publics, EIN, ITIN, SSN…..due diligence, inspections, legal rights and recourse,. Of systems , how to use it , what is MLS… 90% of those looking to invest in the US are learning what these even mean… Outlet = Power point and we often and easily forget that even the most basic of things arent necessarily the same…. ESPECIALLY tenants. A lot of homes in Oz still dont have a/c and sure as heck we are explaining freon etc..
What to do??? It GREATLY reassures me that there are a group of experienced US in easy access and I am pretty darn proud of the help a lot have given in trying to help people get their training wheels off without being too burnt….. Just remember that it IS still critical to break down EVERYTHING. Alex you probably talk to US investors …. Closing = settlement. Our lawyers are solicitors and barristers… No, a
US check can not be cashed in Australia against an Oz bank…..cheques don’t exist in Australia. I HATE CHEQUES!!!! Don’t write “check”(we think of checks and balances) … It is cheque.My rule of thumb? Would I in good faith recommend this to a fellow Australian as a good investment for their first (in many cases) investment property and the answer in the case of a vendor financed modular home in Kansas City is “no”. It is the same as would I, in good faith, recommend buying property in the US from an unlicensed non resident based out of Oz.
Now back to prepping my floor…. I love having some of my own properties to work on for R&R…….
Btw… On behalf of everyone from Oz and the small collective who have made it over here….. THANK YOU Jay, Alex etc for the many hours of completely free and valuable advice you give both on and off forum to help people in this market.
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