All Topics / Overseas Deals / Overseas deals topic has gone dead anyone got anything provocative to talk about save how to set up a checking account :)

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  • Profile photo of jayhinrichsjayhinrichs
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    Profile photo of FreckleFreckle
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    Japan. The next Greece. Wonder how long they'll be able to spin that along before the land of the rising sun becomes another 3rd world country.

    You'll have competition for cheap property I'm sure Jay. Good thing about Japan is there won't be any war zones like the US and they'll be ever so helpful and polite. Getting ripped off will be unusual rather than highly likely. 

    It'll be a mecca for the idiot investor who shuns DD. Japs are just too darn honest and polite.  Ask Ziv!!

    Profile photo of jkunyikjkunyik
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    ….name top 5 cities/states/suburbs in the states for positive geared property?? and why (if u can be bothered)?

    Profile photo of jmsracheljmsrachel
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    I’ve also noticed posts regarding overseas deals have gone very quiet. I wonder why?

    Profile photo of TZTZ
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    jkunyik wrote:
    ….name top 5 cities/states/suburbs in the states for positive geared property?? and why (if u can be bothered)?

    .

    Huh? LOL

    Negative gearing is a foreign concept here

    Profile photo of jayhinrichsjayhinrichs
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    since there is no financing available in the US per se… and Offshore investors pay cash.. then as long as your no buying ultra low end ghetto no hope properties… Most everything will be positive geared in a fashion.  I am not an expert on NY NJ that area, so I know the west and south east.

    Most stable markets with best CG of course have the lowest Positive gearing. In order from lowest to highest.

    1. SF, good parts of LA  ( not compton or Watts)  returns 2 to 5 % positive geared if lucky. Portland and Seattle are the same. But no where near the management challenges of the Mid west south east.

    2. Phoenix with the hedge funds and other big players moving in and setting the bar at 5 to 8%

    3. Vegas  6 to 8

    4. ATlanta  6 to 10 if lucky these days. Parts of Florida

    Then anything higher than that I would not divulge as I do not want a flood of competition LOL

    CG will be best in CA. Vegas, Phoenix… Basically anything Higher end in any of these markets if you pick off a good one you have a chance of CG… Low end sub 30k all in houses anywhere in the country really are just Trashflow houses.. And I am very opinionated here only appropriate for those living within 30 to 60 minutes of the properties whether they have mangers or not.. very management intensive.

    So I was bothered putting this together but its a start anyone else care to share? We need to save this Forum from boredom and obscruity. 

    Profile photo of stu82stu82
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    i would say pretty much everything is already covered here if you trawl through the Overseas forum posts from previous months. That's the only reason why i think it may have dried up.

    Profile photo of Ziv Nakajima-MagenZiv Nakajima-Magen
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    Freckle wrote:

    You'll have competition for cheap property I'm sure Jay. Good thing about Japan is there won't be any war zones like the US and they'll be ever so helpful and polite. Getting ripped off will be unusual rather than highly likely. 

    It'll be a mecca for the idiot investor who shuns DD. Japs are just too darn honest and polite.  Ask Ziv!!

    idiots a bit harsh, and so's the doom and gloom. Japan has a few more rounds (and years) in its economic arsenal and room to maneuver, and nothing like the basic barrel of gunpowder that was the Greek administration pre crisis. I think Australia has more of a bumpy ride economy wise coming up when the current mining cycle dries up and hits the stubborn taxation and ownership policies., particularly in some of the larger rural areas like SA and WA.

    here are two views that really struck a chord  with what I'm feeling is coming – (both scenarios fully ripe for capitalizing on when the relatively soft poo in a safe regulated environment hits the fan in both countries)

    http://www.businessinsider.com/japan8217s-debt-ceiling-2012-8

    http://seekingalpha.com/article/863701-australian-real-estate-about-to-go-down-under

    Ziv Nakajima-Magen | Nippon Tradings International (NTI)
    http://www.nippontradings.com
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    Ziv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

    Profile photo of worldinvestorworldinvestor
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    Why not talk about  buying up trailer parks we don't have these in Australia, seems like there are a couple of gurus that have made a zillion buying these, upgrading and creating huge cashflow.

    How much of a risk for the foreign investor, what type of clients does this attract. I am not seeing a pretty picture, but then again I am perhaps watching too much TV, Jerry Springer comes to mind.  :)

    Anyone had any experience in this area?

    I understand  an investor who joined Steve MC mentoring program moved over to US (Florida) a couple of years ago now and started purchasing these and has done very well, but I just can't see myself doing this.

    WI

    Profile photo of FreckleFreckle
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    zmagan wrote:
    Japan has a few more rounds (and years) in its economic arsenal and room to maneuver, and nothing like the basic barrel of gunpowder that was the Greek administration pre crisis.

    You're deluding yourself if you believe that. If Japan had more rounds and room to move then why is it waiting this long to fix the problem. 20+ years???  Truth is it has nothing and no ability to get itself out of this mess.  Personally I don't think that it's too far away for a number of reasons.

    1. Japan borrows internally mainly from pension funds. They now are reaching points where draw down exceeds contributions. Pension funds are looking to sell their JGB back to meet their obligations. Consequently this past source of government borrowing will only add pressure to the economy as it has to repay debt and looses it as a source simultaneously. A double wammy!!
    2. Fukushima and the accompanying decision to get out of nuclear energy has ramped up energy costs substantially. Production is now moving offshore looking for cheaper options to remain competitive. Export earnings and tax revenues are declining because of this.
    3. Global downturn has seen Japan start to run trade deficits
    4. A dispute with China could have severe trade implications for both countries. Japan will suffer disproportionately to China. It will mean lost trade and increasing military costs.
    5. 50% of the annual budget is borrowed money
    6. Japans debt is 250% of GDP. and real GDP growth is in decline

    Japan has the worst economic profile of any country in the world. It is many magnitudes worse than Greece. We are nearing the end of Japan's ability to borrow from its people. In the very near future Japan will have to borrow externally to fund itself. When that happens Japan will probably collapse economically. Who's going to lend them money at 0% interest??

    Profile photo of jayhinrichsjayhinrichs
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    Wi,

    there is a difference in Trailer parks and class A manufactured housing parks.

    I owned one in Portland that a sold a few years ago here are the numbes.

    43 spaces… I paid 1.4 mil for it.. rents 250 a month.. I raised the rents to 400 on average and sold it 2.5 years later for 1.8.

    Class A parks are some of the finest investments in all of the US… you deal in Class C and D and its ghetto just like any other low end US investment. 

    Texas especially with there lax zoning laws will lure folks into these investments only to lose their dough rae me.

    JLH

    Profile photo of worldinvestorworldinvestor
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    You did very well Jay.

    Stir the pot a bit.

    I am very curious as to what class Steve McK is buying for the management fund he has set up…. does anyone know?

    If he is buying C and D this would certainly be a worry as you mentioned. Steve has I believe a partner in US who has I think 600 of these something like that….??

    WI

    Profile photo of jayhinrichsjayhinrichs
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    With mobile home parks its all about location, age, age of the mobiles that are there,, are they single wide or double wide.

    Are they pit set on perminter foundations.  Is there a club house etc etc.

    And the death nell are ones that have a lot of vacant pad's… takes years to fill one of these.. so one has to be careful about cash flow at the time they buy them.

    Premier Moblie parks sell at 5 and 6 caps… junkers or class C and D anywhere from 8 to 15 or higher cap rates.. and its that ole adage of risk reward…

    Its why we call it "Trailer Trash"  lowest segment of society by and large in the very low end parks. 

    then when people die they just leave the trailer and it cost you 2 to 4k to remove it..

    Again really nice parks in nice areas are tip top investments

    Profile photo of FreckleFreckle
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    When I watched Steve's Fund presentation and good ol' Uncle Zally whatever showcased his trailer park buys I started scratching my head as to what's this got to do with commercial RE.

    Trailer parks aren't property buys they're business buys. His examples were about how to turn a business around the Chinese way; IE have half the family running/occupying key positions in the business.

    Profile photo of Ziv Nakajima-MagenZiv Nakajima-Magen
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    Freckle wrote:
     If Japan had more rounds and room to move then why is it waiting this long to fix the problem. 20+ years

    what you call "the problem" and what Japan sees as "the problem" are two wholly different things, in much similar fashion to how you interpret data. Being "king of asia" or "the worlds biggest economy" hasnt factored in their calculations since post WW2. While I agree that Japan has problems to fix, nothing is crashing, imploding, turning third world, or all of the other doom and gloom that you speculate in my opinion. I'm not a big expert on the rest of Asia, and a pretty small expert on Japan, but what I do know is that, from their perspective, the last twenty years following the early nineties economic bust, can and have shaped up very differently in many parts of the word, the majority of which did try to follow "standard" methodologies to deal with their financial woes.

    As much as the IMF, G20 members and even the almighty freckle don't like Japan's reliance on its citizens, it's zero inflation policy, non existent borrowing rates or lack of sale tax, for example, it's worked pretty well for Japan as a country so far – or at least alot better than if they would have adopted any different measures before they deemed the time is right. They do things their own way and at their own speed in Japan, and while it often seems alien and uncompetitive to the rest of the worlds economies, I for one have faith in their approach.

    Certainly, if the numbers were anything to go by, Japan should have gone through a major recession far before the year 2000, with suicides, droves of jobless and homeless flocking the streets, parks etc, nothing to offer on a manufacturing, technological and economical global scale- yet somehow, almost miraculously, they managed to avoid all that, and didn't (here's a piece that explains how far better than I and no, it doesn't all have to do with borrowing from pension funds- http://www.mindfulmoney.co.uk/?lid=13281).

    There are far more ways to skin a cat and many more ways events could pan out regarding the move to other energy sources (querying the people was one thing, doing it is quite another, the government already backtracked from the zero nukes by 2040 policy, two days after the poll results), disputes with china (which in your mind already seem to have escalated to a full scale war or resource pissing contest, something which Japan just doesn't do anymore) have quite a few ways to pan out as well, as does the reliance on private funds and the handling of negative bond yields (see link in previous reply to your first post)- all of these challenges exist, but none of them spells the death of the economy, separately or unified.

    Not all trade deficits turn out to be GFC v.2.9 etc, some of them merely kick off a mild cycle of currency fluctuations or national tightening periods (which Japan is the undisputed master of- you won't see anyone raping and pillaging after a hurricane or foreclosed streets turning into junkie squalors, for instance, more like a group effort to equally support the sufferers)- all of the above are facts and scenarios and data that can be played out in a myriad of ways beyond the total mayhem you paint in your posts. Every country goes through recessions, ups and downs and booms and busts (as anyone who invests beyond their back yard knows, appreciates, and is quick to capitalize on)- Japan is one of the safest places to be invested in, even during those cycles. Their level headed, straightforward and resilient mentality to economic and other disasters (which are sure to happen, almost like clockwork, every decade or two at the very least), makes them extremely likely to persevere. I, for one, have no interest in chasing the "best", "biggest", "newest" etc- I prefer slow and steady, and Japan's approach in the last few decades, as well as the results, in both high and lower times, actually makes perfect sense to me.

    Diversity and hedging, as always, are key. If your money is parked in several currencies and holding types, you can let the relevant parts of it lie, exchange, liquidate, reinvest – all according to current climates. What you call "investors who shun DD", I call "investors who made a decision and remain flexible, and don't get paralyzed every time the wind changes". That old post I wrote about when and how DD ends was referring to cases such as the ones you like to always portray – ;) – there's always something to be afraid of, no matter where you choose to invest, and in what. We all strike our balances between information, risk (or fear of), and speculation. In much similar fashion to my aversion to speculation regarding gain or growth, I try to steer clear of speculation forecasting crashes and recessions. Yes, it may happen, but it may happen anywhere and to anything I invest in. If I change my mind or never act based on the endless streams of information for or against something, what's the point of investing? I prefer to choose a strategy, at least for a few years, and pursue it as long as its viable (which is never forever)- then adapt to the new conditions. Sometimes those conditions mean I lose some, most of the time they mean I gain in other places and if I implement new strategies. It's not about avoiding all risk at all cost, at least for me, but all about diversifying to minimize losses, maximize profits, and be able to capitalize quickly on new scenarios- something which just can't happen if I sit on my money until the time and place is perfect, because it never is.

    In Japan, at least, as you mentioned, the environment will remain regulated, reliable and supportive no matter how low the numbers sink (and sink they will at some stage, no matter where or what I'm invested in)- Ill take the highs with the lows for that kind of environment, it's a hell of a lot better than anything and anywhere else I've been dealing with so far, at least in the few countries I've sampled and the great many I've been reading about. 

    Ziv Nakajima-Magen | Nippon Tradings International (NTI)
    http://www.nippontradings.com
    Email Me | Phone Me

    Ziv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

    Profile photo of jayhinrichsjayhinrichs
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    Freckle,

    any property that is not SFR or Multi family can be classifed as commercial.. Although I think we all kind of think of commercial as office or retail.

    Not having any first hand knowledge of Steve's activities or their choice of trailer parks they are buying, its still the same philosophy,

    the really nice stuff with no management issues to speak of is going to be A. hard to find B. very competitive in pricing.

    There are already many huge funds that all they buy is class A parks .

    However you cannot take a class C or D park and upgrade it… To do so would mean taking all the existing units out then refilling them with nicer newer units.

    Or building a park from scratch.. It takes years to fill a park

    2 reasons,   1. there is no decent financing for Mobile homes in a park the rates are sub prime esk.  And very few lenders will touch them because of the hassle with foreclosing on them Case in Point.

    My Tree farm in Oregon ( 700 acres) we had a care taker who bought his own Mobile and moved it on to the Tree Farm.

    he was there maybe 6 years then left. And left the Mobile behind..   try to sell one that has to be moved is like selling a used 10 year old KIA or Yugo  very tough and not going to get much money for it. Cost to dismantle and transport and then reset them will be 4 to 8k as long as your not going more than 500 miles.

    So this care taker leaves and he owes 43k on the home… I call the bank and tell them to get their mobile off my property.

    Long and the short of it was we bought it for 4500 cash the bank took a 90% hair cut.

    Now if you own a park this can benefit you when this happens.. and it does happen. Although if you have bank financing on your park they do not like you to own the units.  They will only lend on the revenue of the pad leases.

    Hope this helps on the wobbly box investments. 

    Not to mention most Ozzies would not like the rehab and maintenance,, since these are built in factories, the parts are special size, you cannot go to home depot and find replacement parts, water heaters plumbing electrical is all different in a wobbly box.

    JLH

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    Most would consider commercial RE as land and buildings that enable someone else to run a business activity from. Once you get involved in a running a business from a property you blur the lines between property investor vs business owner. 

    Profile photo of Ziv Nakajima-MagenZiv Nakajima-Magen
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    Any commercial experts in the house, incidentally? Wouldn't mind hearing about the tenancy lengths, growth compared to residential, hassle in management, etc, from any country, if you've got a moment.

    Ziv Nakajima-Magen | Nippon Tradings International (NTI)
    http://www.nippontradings.com
    Email Me | Phone Me

    Ziv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

    Profile photo of Ziv Nakajima-MagenZiv Nakajima-Magen
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    zmagen wrote:
    Any commercial experts in the house, incidentally? 

    nobody, really? Thought I heard some of you mentioning an office or shop or two in some of your posts…come on, share the love, don't be shy lurkers now ;)

    Ziv Nakajima-Magen | Nippon Tradings International (NTI)
    http://www.nippontradings.com
    Email Me | Phone Me

    Ziv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

    Profile photo of John-USA-CommercialREJohn-USA-CommercialRE
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    zmagen,

    I am a Commercial Broker in the Florida market but through my firm I'm able to represent Commercial RE all across the United States.  We have a pulse on every market in America; how can I help?

    John-USA-CommercialRE
    Email Me

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