I am assuming when your OZ market is good its like this… Or was it a more orderly run up over time.
I bought my first house in Palo Alto in 1985 for 175k… ( which was huge money then at least to me). Value today 1.5 to 1.7.
I thought of keeping it but it would have been negative geared 300 a month.. And how could I handle that?
Bay area is a kin to OZ I think OK to neg gear because your going to make so much in CG.. depending on the cycle you can also get caught in the down cycle and if you have to sell your going to lose.
I would be interested in OZ perspective and feedback on your country's market at these higher end of the home spectrum.
When the Oz market starts to rise working up to a boom it is crazy.
Real estate agents don't return phone calls, multiple offers, infact some investors/buyers will offer over the asking price just to secure a property.
I have been through a couple of property booms now and I can also say that some properties in tightly held areas will not even hit the market as Real estate agents have buyers cashed up ready to buy.
However, on the flip side when we experience a crash, the higher the price the harder they fall, blue chip properties are not immuned.
We have experienced a downturn in the Perth market for approximately 6 years and blue chip areas have been the hardest hit, things are just now starting to stabilise and there are positive signs that the market is in recovery. I must say though we experienced a boom in Perth from 2001-2006 an incredible run, during this period you could have purchased anywhere and made money, commercial and residential.
I think this newsletter has some very interesting insights.
Cheers WIZiv Nakajima-MagenParticipant@zmagenJoin Date: 2012Post Count: 523
I was standing next to rj at the auction he referring too. He and I are friends along with John chin and Andre waite
These comments are conclusions we have all come to…
that is interesting, when I started investigating the market in Atlanta I contacted RJ about the Atlanta market he was buying up big in Henry County, am sure he has done very well.
Rj is very experienced.. We are working on a TWH hybrid for moving forward he realizes what I did 2 years ago we need to own these and not flip them.. and have our investors come in as our partners so 95% of the investors get better deals by far than they can on their own (WI your kind of the exception to the RULE you reside in that 5%),, and takes out the huge risk of management and Picking the right property… RJ did do well in Henry but flipped most of the houses instead of keeping them all… But no one had a funding mechanism to do this 2 years ago thats what made my model so unique.. WE could keep some equity albeit 50% still make some cash flow but give our investors the bulk of the cash flow with little to no risk for our investors…
Andrew Waite is from NZ and owns the private investor magazine he is closely tied to Professionals REalty of OZ and has been instrumental in Professionals getting a foot hold here in the states.. They also love our TWH model for the safety aspect.
Andrew Featured our company in the center spread of his mag earlier this year… As the Hybrid Model no one can match vis a vi the risk of turn key.
Atlanta will be interesting I am just glad I play in 5 sandbox's I would not want to be 100% Atlanta right now.
Like, I like to say, I saw this coming in Feb and April and posted as much… Its just finally come to roost now.. A lot of foreclosure regulars thought it was an anomaly but thats not the case these big players are here until there is no more inventory that can be bought at 6 to 7 % net Yields.
On another note… The bidding last month was crazy… ONe of my friends from Oregon who has jumped on the band wagon. bought 16 homes last auctions and got totally caught up in the bidding and bought some really crappy neighborhoods… He is whinning right now..houses he thought he could rehab for 7 to 10 are running 25k plus.. He just bought low end cheap against my advice and now he is hurting… But he borrowed expensive money he had to put out. So you get caught up in it instead of say hey these are no deals I am going to put my marbles back in the box and play another day… He had to spend…Just like the Hedge funds… And RJ is right on point these guys are going to end up with some really ugly situations.
You heard it here first… 2 to 3 years from now its going to be the hedge funds we are buying wholesale deals from, When they realize just how hard it is to manage a very large SFR portfolio that you paid top dollar for and bought in less than desireable areas.
Another reason why I started my very short term foreclosure fund.. We can give a great return be in and out of these deals in 6 months or less and not take the risks and give better Net yields than any one is going to get trying to go through al the brain drain of buying a rental in the states… One needs to constantly keep up with markets and whats working
that is a concern though, if these funds throw properties back on the market in a couple of years, will this flood the market again and we will actually see a drop in property prices??
When do you think prices will level off.
Shame, RJ sold his properties from what I saw they certainly looked very nice.
Big funds will want to achieve their 6 to 8% return… and will back into that with regard to purchase price…
so if at the price's one was paying for properties a year or so ago and were Making a Realistic 10 to 12% net.
then hedge funds can pay about double what they sold for a year ago and then will stop or look for other markets or other asset class's like apartments, commercial is still very much in the toilet with the exception of the very best areas.
I think what you will see from Hedge funds is they will dump their C class or B's that have been managed into C's.
These companies are just like the rest of us thinking CG…
In my mind and what I have set my investments up for is that if I sell at 6% caps based on gross rents we are going to be fine.. We make some money my investors make 12 to 15% NET NET with no risk.. and everyone is happy.
Those Like you point out WI that are buying C D properties there is really no up side for them and if they exit they will lose money, thats a given.
PS this forum has gotten pretty dull here last 2 weeks other than my two articles I don't think there has been anything new posted in a month or so… Save how to set up a bank account. Which is important yet not really riviting stuff.Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71jayhinrichs wrote:
PS this forum has gotten pretty dull here last 2 weeks other than my two articles I don't think there has been anything new posted in a month or so… Save how to set up a bank account. Which is important yet not really riviting stuff.
Agree Jay….the forum has been looking pretty dull of late. What can we do to rev it up ??
from my perspective the market has changed a lot..
Maybe the US does not look as attractive for SFR rentals as it once did…
Although there will always be the C and D class to go after with a hope and a prayer that you receive your rent.
the A and B's there is stiff competition and returns are sub 10% Net and probably gross in some areas.
choose wisely for CG.
the US buyer has come back and I know that could be a reason the US guys are basically gone from this site. They have so much US business that the time and effort in establishing off shore investors probably is not worth it to them at this point. I know thats true with Alex and a few others I know well.
With my TWH model I have a backlog of at least 20 investors.. And half a dozen or more off shore that would like to explore what we do, Just can't keep up with the demand, and I need to give inventory to my Super fund ( IRA consultants) here in the states that brought me to the dance and started with me out of the gate.
You factor these sale pressures in with the fact that we are highly choosy of what we buy since we own it long term and have to pay for the running cost, as opposed to house flippers that once they close they are down the road.. Big difference I can tell you when its coming out of OUR pocket for maintenance and vacancy rather than the investor.
This is why I have started my Short term foreclosure fund.. We deliver better Net yields than anyone can get basically taking the risk of buying a house and they leverage on my 35 years of experience of who to do business with and who not to. Plus we are nimble we serve a very large base of Wholesalers nationwide… I see this growing and our TWH model will end in 24 months or so.. We just will not be able to buy the QUALITY that we want in OUR portfolio and be able to return the investor the net returns we have been doing month in and month out.
Your seeing this with the post WI made about Vincent all of a sudden wanting to up grade their pricing and product… So the 450 investors made a mistake investing with him as he admits and now they should invest with him in much higher priced properties…. Well this is for 2 reasons C class is no class and investor have a very difficult time.. So there is a need to upgrade ones game… And 2 prices are higher from his suppliers its as simple as that.
Ok there is some fodder,
JLHFreckleBlocked@freckleJoin Date: 2012Post Count: 1,680
Ran into this graph the other day and thought it was an accurate depiction of where the US RE market is heading. The so called recovery is heading into the mania section as institutional buyers hit the market with gathering momentum. When that momentum runs out…….