All Topics / Overseas Deals / INPROP USA Good or Bad

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  • Profile photo of jacobapplejacobapple
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    @jacobapple
    Join Date: 2013
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    Hi, I am looking at investing through a company called inpropusa. They are Aussies based in Atlanta and claim to be licensed realtors. They let you buy direct form the Market through either Auction or the MLS and charge a professional services fee along with getting paid by the seller. Has anyone has any dealings with these people. I researched them and everything seems legit and after speaking they seem really knowledgeable. I have thought about buying off a turnkey supplier but when they showed me some case studies it seems that turnkey suppliers are much more expensive for roughly the same product. They also say they have instant equity in there properties. 

    Has anyone got a reason that i should not use these guys. I am looking at buying multiple properties in Jan so unless i hear otherwise i will most likely proceed. Anyone know how i can check that they are infarct licensed Realtors in Atlanta. 

    Please let me know. 

    Profile photo of RedwoodRedwood
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    Hi jacobapple, 

    I have not heard of inpropusa, we do some business in the states and there is no shortage of Aussie's selling property there especially Geogia, Florida and Texas.

    Best thing you can do is ask around, before you proceed (as you have), if you have not already attached is their team from their site

    http://www.inpropusa.com/meet-the-team/

    You would want to know what their methodology is, everyone is buying in Atlanta at the moment, also what stucture. For instance, many of my clients buy in their SMSF, so advice is imperitive.

    As I say, there are a heap of Aussies out there selling properties, I know one I do business with and someone I can refer you to if you donot proceed. Will be in the states late Feb to buy some property also.

    Hope that helps

    Redwood | REDWOOD | SMSF | PROPERTY | FINANCE
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    Profile photo of Nigel KibelNigel Kibel
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    There are a lot of people promoting rubbish in the United States however there are people also doing a good job

    I do not know anything about the group they at least are prepared to say who they are. If people deal with me and I manly do commercial property out of Florida I have no problem allowing people to talk to my clients. So I suggest you ask them to allow you to talk to people who are happy with the service. If they will not do this then i would not deal with them

    Nigel Kibel | Property Know How
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    Profile photo of jacobapplejacobapple
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    Hi everyone. Arrived in the USA today and have been to the Inprop Office and checked everything out. All seems very impressive and they have introduced me to the Ray White USA property management which looks very good. There office is in quite a large building and they share with a Real Estate attorney called Woody. I have met the owner Reid Stewart along with the Broker Bradley Taylor. Reid is young but the agents in the office seem to be in there 50s and 60s which made me feel comfortable. 

    Anyway i had a look on the MLS (Multiple Listing Service) and i am going to look at some bank owned proprieties tomorrow along with a few that are for short sale and 2 that already have tenants in them. They also did a run through of why they are cheaper and showed me a couple of competitors houses online and i must say they have convinced me that buying direct from the MLS is the way to get a much better price. 

    Thanks,

    Jacob. 

    Profile photo of EngeloRumoraEngeloRumora
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    Well done Jacob,

    All the best.

    Have a great day.

    EngeloRumora | Ohio Cashflow
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    Profile photo of Scott No MatesScott No Mates
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    Just one (maybe two) words of warning.

    The AUD is at a 3 year low. If you buy now, you are paying more than you otherwise would if the AUD appreciates again (likewise you will lose money unless your new assets appreciate at a greater rate than the AUD devalues against the USD. (Ignore this if you brought your money to the US when it was sitting above parity). Indications from reserve bank are they want to see AUD sitting between $0.85-$0.90 US).

    Profile photo of jacobapplejacobapple
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    Ok Thanks, I asked them for a number and they gave me a number of a client who has bought several in Melbourne. Spoke to him on the phone and he seems legit.  

    They said that they only make money disclosed to me and because they are licensed realtors they are bound by ethics and rules that others in the industry are not. They showed me a case study and it seems they are 20% cheaper than some of the others I looked at however they are not turnkey providers so i am a bit worried about having to renovate and trust them to do that from the other side of the world so I have decided to fly over the Atlanta before settlement and check everything out. I will keep you informed of my progress as i get on. 

    Thanks for the advice,

    Jacob. 

    Profile photo of EngeloRumoraEngeloRumora
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    Thanks Scott,

    I always predicted the Aus going even lower to around 70-75.

    Thanks

    EngeloRumora | Ohio Cashflow
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    Profile photo of speedy gonzalesspeedy gonzales
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    Scott makes a valid point. I purchased my portfolio a few years back so got in when the AUD was above parity. The drop in the AUD means if I were to sell today I would make a gain based just on the exchange rate alone but I have no intention to sell at this stage. Then as Engelo says……the AUD is likely to go even lower so perhaps get in now ?? Now back to the topic of the thread…….I am pretty sure Reid Stewart was one of the main ones behind USInvest so it looks like he has made a change from the turnkey model over to showing buyers wholesale deals. On the surface there doesn't appear to be anything wrong with the company…you can easily check with the Realtors Assoc in Georgia if they in fact do hold a license but I wouldn't see why they wouldn't be if they were promoting this fact. That's only the very first hurdle however. Next step is actually finding that gem instead of a lemon but if your inspecting on the ground you should be able to weed them out to a point yourself.  Let us know how it all goes Jacob. If your keen I am sure readers would enjoy you putting your process for all to read and educate themselves

    Profile photo of EngeloRumoraEngeloRumora
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    Thanks Speedy and well done on buying when Aussie was above parity.

    I had a mixture if getting all funds to the US lollol

    Whoever thinks they can find a true "gem" deal without actually being here in the US i sadly mistaken.

    All the best deals are always bought up very quickly by locals.

    The 2nd tier of property would get offered elsewehere not saying that these deals are bad but true "gems" as mentioned are always snapped up quickly.

    Thanks and have a great day.

    EngeloRumora | Ohio Cashflow
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    Profile photo of jayhinrichsjayhinrichs
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    It goes like this.

    BAnks or servicing companies bundleup bad debt… Sell it to Hedge funds.. Hedge fund slice it up and sell it to smaller investors.  These investors sell to wholesalers.. Wholesalers sell to Local wholesale investors.. these guys then sell to turnkey   turnkey then sells to end user.

    OR……

    BAnk does the foreclosure and puts the asset on the MLS  and its sold… Or seller offers a short sale.. And the real estate agent will usually have 5 to 10 offers.. they take the best and proceed with the short sale.

    OR..

    YOu find privately owned properties that are in an estate and or the heirs just inherited it and want to dump it to get cash and do not want to work on it.  ( these can be Gems)

    Engelo is correct though the Gems go to the locals by and large… If you do hook up wth a good RE agent and can get a short sale that could be a gem as well.  Most agents though make so little money on these deals its hard to find a competant one that is going to get excted because you want to buy one 60k house…Just way to much work to make a whopping 1k commission.

    this is the Reason Reid will be charging the extra dollars so they can afford to hang in there and negotiate thesedeals for buyers.. NO way you can make a living if you did not make a fee from the buyer as well.. As well as this company cordinating your rehab.. Same with needing to be there to find the gems to rehab from have a world away is going to lead to all sorts fo problems.. IE shoddy work work not done but paid for etc etc.. WE have all heard of those stories… So if on can get access to MLS deals  and competant oversight of rehab that would be good for the buyer.. However its not turn key you as the buyer will have to put a lot of effort into this.

    ONe thing from the AU buyer that I never see mentioned is they do not factor in their travel expenses into their % returns.  If one has to pay 5 to 10k to come to the states and find his gem.. you need to account for those dollars.. So that 60k rental really cost you 70k  now if you an buy mutiple properties on that one trip thats better you can spread those costs.  As most trips to the states unless your going to obvious tourist destinations I would not put in the catagory as a nice vacation..Your not going to want to go to Kansas City on purpose to vacation or Detroit or Rochester or Memphis..  Atlanta Maybe… Orlando for sure … Same with Texas.. Other than Austin or San Antionio   Houstan and Dallas are hardly vacation meccas. 

    All spelling errors are intential

    Profile photo of Nigel KibelNigel Kibel
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    Hi Jay I agree

    I still like Texas though I worry a little that the market may be a little to hot at present. I really like Orlando because tourism is so strong. If you buy in a LLC then your travel cost do become deductible in the United States is my understanding. However there is no point coming to the United Stats and buying a single family home in Detroit because firstly you may struggle to get any of the rent buy secondly by the time you pay for the travel, the LLC and then lodger your returns you may not any any cash flow left. I generally like apartment complexes because i Florida I believe that you will have both cash flow and capital growth. Some commercial is also good providing that the deal makes sense.

    It is also important to remember that once there are more than 5 in a block it also becomes a commercial transaction.

    Nigel Kibel | Property Know How
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    Profile photo of EngeloRumoraEngeloRumora
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    Thanks Jay,

    Ill be very short and sweet,

    If your looking to buy the "gem" from Australia and also project manage the rehab you might as well donate those funds to charity.

    Its hard enough finding a genuine turn key operator that wont screw investors over not to mention doing it all yourself.

    Best deals I ever bought were on Craigslist where kids inherited a property and wanted it gone or granpa wants to sell out of this portfolio.

    There are many uneducated sellers trying to save a $1,000 realtor commission listing on CL and actually loosing much more money due to not knowing the true value.

    Lots comes down to negotiating also. Its something I am happy to say I have mastered quiet well.

    MLS is great sometimes. No negotiating on foreclosures tho. Must be quick and submit as soon as property has been viewed.

    Finding too much competition lately. I never get into bidding wars. There is always another around the corner.

    Thanks for reading.

    EngeloRumora | Ohio Cashflow
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    Profile photo of inpropusainpropusa
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    @inpropusa
    Join Date: 2014
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    Hi Guys,

    I am the President and founder of INPROP USA and I would like to clear a few things up. I have set up INPROP USA as a way for people to extract the best value out of the US Housing market. We are licensed Realtors through our brokerage INPROP REALTY, LLC. and we do charge an arrangement fee of $4,999. This fee includes property research, renovation and closing oversight, market research, purchasing services, etc. as this is work above and beyond what a realtor would normally provide.

    After years of doing the turnkey model, I decided the best way to go about things was to act more as a real estate services company. This means we have access to the entire market of inventory and because we do not need to make margins on the product we can provide better prices. Despite what some of you have said above, it is possible to get deals that the locals would usually get using us. We have all the affiliations that everyone else has and through the MLS as well as private connections we can get you the best deals in town. We believe we are better set up for this than anyone else in the market place.

    We are 100% transparent in our practices and walk our clients through exactly how we do our research and why we choose certain areas above others.

    Engelo you stated that, “If your looking to buy the "gem" from Australia and also project manage the rehab you might as well donate those funds to charity.”

    This could not be further from the truth when using our services. We have exactly the same ability and experience to get the same deal as the locals. In fact, since we have 5 day due diligence and a 5% deposit we actually have greater success than locals. To say that the best deals are found on Craigslist has some truth to it, but they are few and far between and we monitor Craigslist daily looking for them. We have short-sale radio commercials in Atlanta and do large pre-foreclosure direct mail campaigns to get the best short sale listings before they’re even on the market. It is very much possible to get a gem without being here and project management is not an issue either.

    Scott, The Fed has just tapered off its stimulus while the Australian economy continues to struggle in many sectors. Most analysts predict that the Australian dollar will sit for the next 12 months between 80 & 85 cents. It is currently around 92, so while it is not as good as it was last year, it is still attractive. The Fed’s expected continual slowdown on the purchasing of treasuries should help the USD to strengthen further in my opinion.

    Our agents have much more experience than most when it comes to finding profitable single family homes in the markets we work in. They work as if they are finding a deal for themselves and show our clients how to research their properties from their home base. It is actually quite easy to do this once you know where to look. The 3 factors that will always determine a good area no matter where you look are: 1) Schools- http://www.greatschools.org, 2)Crime rate, and 3) Median Household income- http://www.city-data.com

    With City Data, you can find medium household incomes for zip codes as well as small communities within these zip codes. This is a great way to narrow down the neighborhood you want to invest in. INPROP does not advise its clients to invest in areas with lower than average state income levels. We also don't encourage investment in areas with schools lower than a 5/10 rating.

    I hope this has cleared a few things up.

    Also Jacob is on his way back to Australia now. He bought 2 homes, but I will leave it up to him if he wants to go any further.

    Thanks,

    Reid

    http://www.inpropusa.com

    Profile photo of EngeloRumoraEngeloRumora
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    @engelorumora
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    Thanks for your comment Reid.

    Your attention to detail is much appreciated.

    Its great to see a company like yours that doesn't purchase that true "gem" of a deal themselves and passes it on to their clients so they can make a substantial profit.

    Also, just a another quick question as I was personally singled out in your comment even tho there was no attack made on your business or your model from my behalf.

    How can you 100% confirm or prove that you don't receive a kick back from the seller of any particular property or the construction company doing the rehab???

    Can it be 100% proved or does it just come down to trust and relationships built with your investors?

    Thanks for reading and I am looking forward to your reply.

    Have a great day.

    EngeloRumora | Ohio Cashflow
    http://ohiocashflow.com/
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    "Make a PASSION an OBSESSION and you'll never work a day in your life"

    Profile photo of inpropusainpropusa
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    Join Date: 2014
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    Hi Engelo.

    We do receive standard Real Estate commission from the seller of around 2 or 3% per property as any licensed realtor does. This is displayed as standard on the HUD. It is illegal for us to charge commissions outside of that paid on the HUD. We get appraisals on all our properties to show the client there instant equity at the end. So far we average around 14%. 

    We charge the $4,999 thorough our services company which is separate to the Brokerage and charges its fee for professional services. 

    As far as renovation is concerned we have a construction manager who runs our teams of Contractors. There prices are inline with the market for licensed and insured contractors. A client is welcome to get there own quote if need be but beyond that it is difficult for me to prove this to you.

    Quite frankly we will do what is necessary to prove to our clients that they are getting value for money. We do not necessarily need to prove this to our competitors which i presume you are. 

    Can i challenge you Engelo. You like properties on your website like 5643 Euclid Ave, Kansas City. Do you collect rent and manage the properties on behalf of the clients? Do you or would you live in these areas. A quick search on City-data.com and greatschools.org would suggest this may not be a great area to invest. I know it is a cheap area but experience of over 1000 deals has taught me that Cheap usually just means headaches and although returns look decent on paper they are in fact much much lower in practice and there is really no exit. I think that if you are living in the city and Self manage these things (know here as slum lord) you can make a decent living. You would however need to have a sizeable portfolio in order for it to be worthwhile. Below is some data on that area.  

    Median household income ($) : $23,125

    Kansas City, MO (income)

    64130

    Population: 1,097

    Households: 367

    Family households: 270 (73.6%)

    Non-Family households: 97 (26.4%)

    Median house or condo value: $68,078

    Median contract rent: $450

    Unemployment: 10.8%

    Residents below the poverty level: 17%

    http://www.greatschools.org/missouri/kansas-city/954-Troost-Elementary-School/ 

    Thanks,

    Reid

    Profile photo of EngeloRumoraEngeloRumora
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    Hi Reid,

    Thanks for your prompt reply.

    I am glad that you had the time to review previous deals that our group and myself have been involved in. I haven't contributed to this forum for the last 3 years to get into argy bargy with any other member or business operator so this will be my last reply to your comment as for whatever reason you decided to single me out over a post and not Jay. I am assuming its due to Jay's high reputation and level of influence in all markets across the US.

    Thank you for clarifying some questions I had regarding your model. I am also honored to be considered a competitor to your group as I initially thought that our operation is no where near yours.

    5643 Euclid Ave is a property that I personally would not live in nor would I live in the area. The happy owner of this property and the owners of other properties have been made aware of these facts. The area is comparable to a certain zip code in Sydney 2770 where the entry price is lower with higher rents but can cause headaches if good management is not in place. We have 2 property managers on the ground and one of them specializes in collecting rents in C class areas and does not conduct property management by the book as it would be very difficult to achieve those quoted numbers "on paper" in real life which he manages to do with out a problem.

    Our whole model is based on building trust and relationships not only with investors but also key personnel that are involved in the venture. We have never had a need to do any marketing as all new business is generated through word of mouth and referrals and most investors tend to buy 3-4 houses over a span of 2-3 years. This is a great indicator that we deliver those numbers on "paper" in real life otherwise why would someone buy more than 1 house.

    I also appreciate you taking the time to research and compile the stats in your post ( I could hire Freckle to back up my post with any needed stats also haha jkss). Although these figures are most likely correct they mean absolutely nothing to me and they also shouldn't be the foundation of any investors decision on a particular area especially when they are buying from a world away. The US market is completely different to the Australian market as I am sure you are aware off.

    "Figures and stats" are not the reason why investors loose money. Its the people behind the operation that are the cause. I am sure if the wrong people are looking after someone's investment property in a great area with awesome "figures and stats" the investor will get cheated and money will be lost and vice versa.

    Also, we have a gentleman within the group that has 24 years experience living and breathing the houses and streets of our target area working as a Realtor and also project manager of his construction company.

    Ried,

    Although your experience in the US market and US property in general is far more sufficient than mine, I am happy to say that after living and breathing US property since September 2012 I have seen every trick in the book how one can cheat and scam unsuspecting foreign investors. From kick backs from construction crews to property maintenance scams, etc….

    It all comes down to one word and that word is TRUST.

    I wish you and your group continued success and please feel free to connect if the team or myself can ever be of any assistance with the market in KC.

    Thanks for reading and have a great day.

    EngeloRumora | Ohio Cashflow
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    "Make a PASSION an OBSESSION and you'll never work a day in your life"

    Profile photo of jayhinrichsjayhinrichs
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    I Beleive TRR (top rental returns)  had the same model as Reids new company.. Or they claimed they did… And they procured some nice product from what their videos showed.  Have not heard from them in a while not sure if they are still working Atlanta.. From my standpoint when they started they were clearly acting as real estate agents with no license.  But hey an AU investor really did not care… When I looked at their proforma's  rehab looked to be puffed  IE they probably had an additional fee added or were not very good negotiators vis a vi getting contracts from the contractors.. And the only other things I heard about them negatively is their rehabs took far too long.. Many posted that rehabs were taking 3 to 6 months. When any competant rehabber should have those type of projects done in 30 to 45 days max  2 weeks for the lip stick jobs .. I am sure those that Try Rieds new company in Atlanta will experince this quick turn around.  As well as I read post from people on this site that said by the time TRR rehabbed and finally tenanted a house it took 6 months to a year.. I would very often point out that most likely they were NOT Insured why the house sat vacant that long and were really at risk in case of a fire or wind or storm damage.. In addiiton by the time they spent the money to come to Atlanta and pick there house they were starting their investment hugely in the hole.. Compared to buying a home that was already rehabbed and tenanted.

    From what I see from Reid They are Licensed and Licensed agents regardless of Nigel's thoughts or opinions about using a RE agent ( he might of had a bad experince) are almost always a benefit to the buyer.. ONe they have a fiduciary and they have Eand O insurance… A Licesnsed realtor lies to you or sells you a home that is far over true value and you have recourse through the courts and the real estate agency failure to disclose materil facts is grounds for suspension or revokation of a REicense. Any quality agent is not going to risk their livelyhood with and flagerant and deliberate misrepresenation or ommision.. So from my point of view   and of course I am biased  I am a REal Estate broker in 3 states and a licensed Mortgage BAnker (federal) I like to see companies follow the laws of the land.. And negotiating the purchase of a property that one does not own is e definition of acting as a RE agent.. I suspect its the same in OZ.

    Regardless I do beleive by and large the riff raff has gone the way of the dodo bird and the better players are those that are still in business.

    Profile photo of inpropusainpropusa
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    @inpropusa
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    Thanks Jay,

    We are pretty good at rehabbing and i actually brought my business Partner in purely because of his skill in that area. I recognize how important it is along with Property management which is why we also helped establish Ray Whites first Property management office in the United States. They are very much bringing Australian property management standards to the USA.  

    Engelo, i am sorry if i came across as aggressive or challenging your model. It was not my intention and i also wish you all the best in your endeavors. 

    Regards,

    Reid

    Profile photo of EngeloRumoraEngeloRumora
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    @engelorumora
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    Hi Reid,

    Thanks for your post and no problem at all.

    I very much like what you guys have done with Ray White PM. While I was living in Australia I had a brief stint with them. Great company.

    Maybe we can schedule a call sometime in the future as I would love to know more about how it works.

    In our opinion good property management is one of the most important factors to success in US real estate.

    Now if only we can somehow bring the banking system from Aus and NZ here to solve that problem also for the Americans hahahaha jokesss

    Thanks and have a great day.

    EngeloRumora | Ohio Cashflow
    http://ohiocashflow.com/
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    "Make a PASSION an OBSESSION and you'll never work a day in your life"

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