Forums / Property Investing / Overseas Deals / US Investing Where from Here??

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  • Profile photo of MTRMTR
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    @marisa
    Join Date: 2004
    Post Count: 663

    Hi All
    Have not been on this forum for some time now.

    I purchased 9 larger homes in Atlanta GA in 2011/2012.

    They have all pretty much tripled in value thanks to the strong US$ against the Au$. The rental income on these properties is well over 20%+ yield as I was buying these properties at around $35-50K.

    Moving forward today I would like to make my money in US work for me and access equity from my properties in Atlanta and continue looking at other markets that may work today to continue to generate cash flow. I am currently trying to source finance in US.

    I also understand the importance of property management. The only market I know is Atlanta.

    I am hoping that someone on the forum can give me some ideas on where I could possibly look in US that may still stack up, I understand this may be very difficult considering foreclosure market has moved from when I started purchasing.

    Would be interested in views/

    Thanks

    Profile photo of jbelmorejbelmore
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    @jbelmore
    Join Date: 2011
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    It might have been one of those once in a lifetime deals – mining boom and high dollar – GFC and cheap US property. I’m sure there are deals but you might have to have lower expectations?

    Profile photo of RedwoodRedwood
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    @redwood
    Join Date: 2013
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    MTR – not sure you will get the right help here. You are a success story – as we have said elsewhere, the US market is ‘rebounding’ in what I call the end of the “7 year doom” that is those who defaulted in 2008 can now get a mortgage. As a result, those people are now buying leading to price increases and in my opion this effects rental yield. So many have failed in the US for a veriety of reasons, mainly a CF strategy without capital growth, however with the US dollar the way it is – property is more expensive.

    Thank goodness there are less ‘gurus’ to push their crap to naive Aussie investors however they are still around.

    As I have said I love texas, not only great beer and cowboy hats, but great property, higher entry point but you pay for quality.

    As usual, well done MTR and all the best!!!

    Cheers Ivan

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    Profile photo of Nigel KibelNigel Kibel
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    @nigel-kibel
    Join Date: 2005
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    I think there are still good opportunities in the states but I think the focus needs to be on commercial property including apartment complexes. Then it is essential that you have a good property management company that can look after the investment. Trying to do this on your own is difficult because the Americans will rarely tell you something cannot be done. Plus to try and understand a foreign market is a challenge and takes more than a one week holiday. I have had enough issues working with someone on the ground so trying to do this on your own is not a realistic option unless you are prepared to spend a great deal of time on the ground.

    • This reply was modified 3 years, 9 months ago by Profile photo of Nigel Kibel Nigel Kibel.

    Nigel Kibel | Property Know How
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    Profile photo of Peter GerolymatosPeter Gerolymatos
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    @petergee01
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    A couple of things:

    I also understand the importance of property management. The only market I know is Atlanta.

    MTR, I’m 100% with you on Management, but doesn’t having a good manager mitigate any risk you may have in “not knowing” a particular market? The US is so vast, there are performing pockets in just about any city/region, and for all price points. Perhaps you could consider looking at it “top-down”: i.e., qualify a Manager, then ask him where he would buy. I do this all the time in Kansas City.

    … those who defaulted in 2008 can now get a mortgage. As a result, those people are now buying …

    Ivan, this is also true, but what this potentially does for those who own property in the US is set them up for Vendor Finance. In other words (and this is simply put), sell the house to the tenant, who pays for all upkeep etc. and allows the investor to increase his ROI. It’s possible to transfer a property into a Land Trust, make the Tenant a beneficiary of that Trust, and then put him/her on a Commercial Lease allowing occupancy. This mitigates foreclosure if the tenant ends up not paying (it becomes an eviction process, which is quicker and cheaper).

    … Americans will rarely tell you something cannot be done.

    Quite true, Nigel – it’s a cultural thing, for them. For us, though, we need to make sure we’re prepared to understand that expertise costs money, which is something our culture has told us to ignore. We’re always trying to beat a price down / find a bargain, and while I guess that works with products, I think it’s a mistake to apply it to services.

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    Profile photo of John CarneyJohn Carney
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    @americapropertysource
    Join Date: 2010
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    Hi MTR,

    I am working with an Australian multifamily investor based in LA who invests multifamily sites across the USA. This is a syndication opportunity with a major institutional investor and multifamily operators who have a transparent track record. Send me a message if you want the 27 page Investment Package detailing the current $26.6M / 320 unit opportunity in Dallas, TX. This is a Class B asset and an opportunity to pivot into multifamily.

    Invest well,

    John Carney

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    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    Hi John

    Just wondered if you hold an AFSL ?

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of D.T.D.T.
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    @dtraeger
    Join Date: 2014
    Post Count: 128

    Whats the best way for an Australian to get finance on single family homes there?
    And what sorta yields are you getting?

    D.T. | DT Property Management
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    Profile photo of MichaelEMichaelE
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    @michaele
    Join Date: 2013
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    I’m currently in Atlanta, and will be there until the end of the year. There’s an insane amount of building going on around here. The Braves (the ATL Baseball team) will also get a new stadium which is to be completed very soon. I guess this will drive in huge amounts of traffic and make the surrounding area a growth area. That’s just my two cents, although I’m a total beginnger in investing. Congrats on your success! That’s an amazing achievement!

    Profile photo of Nigel KibelNigel Kibel
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    @nigel-kibel
    Join Date: 2005
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    What I have found is that flipping houses is just too hard. Now I am talking about the Florida market. My view is that as flipping has become more popular the banks have raised the prices and hard money lenders have raised there fees. What this means is that the margins have become much tighter. Generally the best market to aim at is the owner occupier market, because if the property is under $300,000 and sells to an owner occupier then withholding tax does not apply on the sale. However funding for owner occupiers is still tight.

    I am now focusing on a strategy of buying small apartment complexes. If work needs to be done we will do it. We then have a very good management company that will rent out the properties and manage them. For their are two strategies here. One is to buy well rent it out as a long term investment and secondly buy rent up and onsell to a US investor. My experience tells me that this will be a far better investment option rather than deal with cheap homes.

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    Profile photo of FredWisleyFredWisley
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    @fredwisley
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    New York, Miami and Los Angeles are the most popular American cities with foreign investors. Remember that the prices quoted from Zillow and Trulia, two of America’s largest real estate directories, provide insight into the property market situation but should not be taken at face value. Only an experienced local real estate agent will be able to provide an accurate overview of the market.

    Profile photo of tom12tom12
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    @tom12
    Join Date: 2012
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    I’m currently in Atlanta, and will be there until the end of the year. There’s an insane amount of building going on around here. The Braves (the ATL Baseball team) will also get a new stadium which is to be completed very soon. I guess this will drive in huge amounts of traffic and make the surrounding area a growth area. That’s just my two cents, although I’m a total beginnger in investing. Congrats on your success! That’s an amazing achievement!

    Hi Michael,
    I am a newbie and learning about this. Are there any Australian agents based in Atlanta to contact and get help?
    Thanks if you could share the info.

    Profile photo of D.T.D.T.
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    @dtraeger
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    I am now focusing on a strategy of buying small apartment complexes.

    Who do yo use for lending on these?

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    Profile photo of Nigel KibelNigel Kibel
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    @nigel-kibel
    Join Date: 2005
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    I am working on a new model of buying from smaller to larger apartment complexes ranging on a value of between 2 and 10 million. I am working with a high level tax Accountant in Australia and a few in the United States including a finance expert who has experience at leading at anything up to 100 million. Now I realize that we are all used to Americans making big promises and not delivering. However a client of mine brought a 26 unit apartment complex for around 1.3 million. Despite promises of finance the best we could do was get emergency funding at around 11%. I have two brokers working on the deal neither could put anything together. Now the guy I am working with went to work and got the deal refinanced for 15 yeas at around 5.3%. He is currently refinancing an office building. We are also looking at another deal up around the 2 million mark.

    So what is the secret. Deal with smart people who know what they are doing. Going with someone who appears cheap will cost you a lot. Remember you get what you pay for.

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    Profile photo of tom12tom12
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    @tom12
    Join Date: 2012
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    Hi Nigel,
    I am new to this site.
    What is the minimum of investment needed for the projects you propose? What is the reason you are not dealing with single family homes?
    Thanks

    Profile photo of Nigel KibelNigel Kibel
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    @nigel-kibel
    Join Date: 2005
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    Hi Generally around $100,000 and up

    The benefit with larger properties is we can borrow around 70% non recourse at a good rate

    The problem with single houses is that if you are keeping as an investment the returns are not there. Generally finance is expensive. If you lose your tenant you have a problem. If you are renovating to onsel the risk is too high for the returns. So we look at larger investments that cash flow but the idea is to keep the investment for at least 5 years and you then also get to share in the capital growth.

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    Profile photo of MTRMTR
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    @marisa
    Join Date: 2004
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    Just an update from my original post –

    We are back playing in Atlanta love this market, but our deals are a totally different beast from what we were doing in 2011/2012.
    As we know property has soared in Atlanta and continued to grow and the yields no longer fit my criteria, have not for some time.

    Where from here, a number of strategies we are currently using –

    We Purchased 5 developments sites in hip pockets that are gentrifying we are not playing in the burbs. We will start building 10 townhouses in January/Feb 2017. We have a team and we also have a US business partner. Interesting in US a average size development is around 100 units, so we do not fit this category too small for a developer and too large for mum and dad investors. The key is to build what people want and also to find the sweet spot in terms of targeting the right price point.

    I am a developer is Australia so I hope some of my experience will help me with my Atlanta developments. The interesting thing about developing in US is it is much shorter time frame than in Australia, we expect 6 months per projects, in Australia we could be looking at 18 months, ROI is huge.

    We are also flipping properties in US and yes, there are good deals but you wont find them without the right contacts, and I would not touch anything unless there is 40% in it for starters.
    We are looking for our second flip and the idea is to flip at least 10 per year, 20 would be nice, but I think a tad ambitious.

    Happy investing guys.

    Off to Atlanta in November will be flowing over regularly.

    MTR:)

    Profile photo of Nigel KibelNigel Kibel
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    @nigel-kibel
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    I have been involved in the American markets for a number of years. I am establishing a new straight forward model of buying large apartment complexes in the 2 to 6 million mark depending on the number of investors we can put together. The benefits are that we can get non recourse finance at around 70%. We have just refinanced a 26 unit complex at 5.3% for 15 years. If you have a few vacancies it does not overly effect your investment.

    I am working with a finance specialist who has experience dealing with funding of up to 100 million. I have learnt that to be successful in the states you have to deal with very highly accomplished professionals. I am also working with financial planners in Australia who are experts in dealing with self managed superfunds and making sure that they are compliant with Australian law.

    So the concept is simple buy b and a class assets make sure that they cash flow well and hold them for at least 5 years. We are mainly looking at Miami and other parts of Florida I am personally also interested in Texas.

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    Profile photo of MTRMTR
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    @marisa
    Join Date: 2004
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    Sounds good Nigel
    USA is very much about networking with the right people no different to Australia IMO. Many have the illusion that property investors always make money, not so I know many that have lost money in Australia.

    My gut tells me the Australian property market is due for a correction. I have taken my profits off the table and US is providing another avenue to grow wealth

    I will post some of my deals in the new year

    MTR:)

    • This reply was modified 3 years ago by Profile photo of MTR MTR.
    Profile photo of MTRMTR
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    @marisa
    Join Date: 2004
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    Just an update.
    We have just secured 3 houses in Atlanta to flip, these will be for short term gains with the view of growing and continuing to flip properties. Rinse and repeat.

    We also secured a multi unit (quad) to hold. Houses are not making sense anymore in terms of rental yield, multi units provide the cash flow.

    Doing a mixture of both and also developing property.

    Will post pictures before and after as we progress

    Marisa
    MTR:)

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