17159 Albion St, Detroit

Passed this property on to an SMSF investor @ $33,000 Purchase price
(deal secured in Aug 2018)
Rent per month - 900 pm
(we managed to secure a good tenant immediately after purchase)
$10,800 is the yearly rent.
In just 3 years and a month, this property will be paid off with rents.
Glad to note - to our Investor's delight - we work towards this motto.



This property ARV is 80-85K in today's market. Banks are lending to homeowners big time.
Simple - if a renter can pay even 700 pm in rent, why can't he/she pay 400 in interest payments?

17 property closings this September month alone.

And btw, good news, our team size has just grown to 12 this month .
With the addition of Ryan Luster (our new Property Admin).
Yes, 12 dedicated individuals who will work to grow our investor's portfolio.
You can see the walkthrough and location videos on our FB page.

 

Nice looking home and great returns Bala, congratulations!
Love the return on investment, 3 years and 1 month. Can't beat that. How many years does it take to pay of a 1.5 million sydney property, care to do the numbers?

 

Looks like your post is a little lonely so I'll give it a nudge.

My first observation is that you are gilding the lily again. You cant repay debt with 100% Gross , so you wont be repaying the property with rent in 3 years. There are bills to pay and there are taxes to pay - and you know this. You can only repay debt with whats left after paying those bills and those taxes - that's the US Federal and the US State and the Australian taxes.... which would likely leave @ 3 - 4K . And you know this too. So I think 8 -10 years is a more realistic term. Which is still really quite good as it's almost 10% return. Which is why I don't understand why you continue to misrepresent things.

Also - your website says it's a 37K property generating 9K per annum I'll assume that's a typo...but if it's not . ie if the price is 37K and the rents are $900 per month and the net returns are actually closer to 2.5K (7% )per annum after all bills and maintenance and taxes, that's not exactly going to repay itself in 3 years is it ? That's a 15 year proposition at least. But lets assume it was a typo.

I'll assume that's a typo too... given the reality of things is that net yields are likely to sit between 7 and 10%, I'll assume you meant to write "can't GET that" instead of "cant' BEAT that "


Putting that aside though - because I fully expect you to react as you always do when your numbers are pulled to pieces....... Riddle me this... if these are worth 80K -85K + as suggested, and

as suggested, and you are making money selling them at either 33K or 37K ( you arent doing all of this for charity after all) why arent you just keeping them for yourself and selling them for 80K + ?

I ask because even if your margin is 5K per deal, meaning you are paying 28K ( or is it 32K ?) , you could make more in one deal by selling this property for 80K + than you can make by selling 10 properties at 5K margins

Even if you got the properties for free , there's more money in buying them at 33K and selling them at 80K ( 47K to be precise - or maybe 43K ) , than there is in selling them at 33K or 37K

Just. doesn't. add. up

 

Euro73 - good points there.

 

So that suggests about $6,800 per year in expenses ($10,800 Rent), Gross $4k (say).

I am not across market, but not hard to incur around that figure with an average investment property in oz. my expenses running at ~30% of gross rent (excludes interest)

 

if the rents are 900 per month thats $10.8K per annum - if its full
At least 2-3K in expenses, insurances, management fees etc
And @ 40% goes out to Federal and State and Australian taxes- there's another 4K
So 6-7K of the 10.8K is lost to expenses and taxes....
What goes into your pocket? maybe 3 or 4K.
3K represents an 8% net return on 37K
4K represents an 11% net return on 37K

If the rents are actually $750 PM as the website says- thats 9K per annum
At least 2-3K in expenses, insurances
And @ 40% to Federal and State and Australian taxes- there's another 3.5K
What goes in your pocket? Maybe 2.5 K - 3K
Net Returns of between 7% and 8%

BUT - just one major repair per year (remember these are older houses in a city that gets brutal winters ) would see you barely breaking even...

And even if the expenses are 1-2K less than I have estimated and the returns jump to 10,11,12%..... All Im saying to readers is that these guys make misleading claims.

Remember - this is what was claimed - 33% net.

 

@GentleChief could you please clarify

 

Annual US property taxes suck.

 

Its varies significantly, dependent on State and property

Taxes in Texas are very high.

 

It's unfortunate that this guy called euro73 wants to discredit me.
On every post.
I have never met him and He is not my competitor.

I like to keep it clean. No under the belts.
It's clear and simple. Numbers speak for themselves.
And so does success stories.

If they go low, We go high.

 

Btw, I am not on PC every day, (like I would like to) and if you need info, let's discuss.
My details are on my signature.

Greetings from Detroit USA.
Investors can decide for themselves, as we do not Market or Sell properties.
Since there is too much of demand from just US domestic investors.
We only work hard on the acquisition side - 65-75 cents on a dollar deals.
Foreclosures, Tax auctions, probates etc.
Feel free to compare my deals. Thanks,

Signing off with success, our investors want me to be working on the next best deal. Not shadow boxing with a someone who makes it their life goal to post here with negativity. Too many good deals to work on, and I am and not going to be scoring personal points on rants. Thank you,

 

I want you to stop exaggerating the numbers. I want you to be accountable when you are caught out.

Yes they do... Here are some examples of the numbers you have posted. Just a few. Thats all it takes to see the way you and numbers work together. Lets start in April of 2018 where you claim a 37K property will generate @ 5.8K before taxes...Somewhere @ 40% needs to come off that figure



Then there's this post from April suggesting @ 5K before taxes. Somewhere @ 40% needs to come off that figure




Then there's this thread, where you claimed the property generates 10.8K and will pay itself off in 3 years, even though your own website contradicted those figures... Now I have to hand it to. You were cheeky before when you omitted @ 40% of the numbers for taxes time and again even after it was raised with you ..... but this time around you just went for nothing but net! Swish!!!! No bills of any kind. The property managers, local council( city/ village/county) and everyone else works for free now... and the IRS and ATO pretend you don't even exist. And you say the numbers speak for themselves ....my oh my oh my.




And let's not forget this gem. The Property Chat community is still looking for mangoes!



All while claiming not to be selling anything to anyone....



At the same time as saying these kinds of things..which seem very much like "selling"





It's just contradiction and misrepresentation after contradiction and misrepresentation...and every time you get caught you double down, making yourself look more and more disingenuous.

You shouldn't have doubled down on the fibs. You should have taken the numerous opportunities afforded you to come clean on taxes ... from the very beginning that is all I have asked you to do. Get the numbers right.Plenty of others have asked the same questions I have and you always go to ground or respond with bluster, claiming peop,e arent mature or sphisticated enough to understand...

Well, people can add 1 + 1... and when your numbers have such glaring irregularities they can see that pretty easily.

You are confusing negativity with accountability. Just get the numbers somewhere close to accurate. That's all.

 

Pictures attached
$33,000 Purchase price
900 per month rent
City Taxes (same as council rates) - $1124.19 per annum
Management fee - $864 per annum (8% of rents)
Maintenance - $900 (as a thumb rule 1 month's rent - you can buy an AHS home warranty for 500 + call out fees)

Street view - Google Maps

 

A couple of questions...
@euro73 - you keep quoting 40% income tax..... how does the Trump corporate tax affect this and also how do foreign tax credits work for SMSFs - low/zero tax environment (which is what @GentleChief is selling here). Genuinely curious, please answer without reference to the thread protagonist.

Secondly, street number 17159? Are there really that many houses on a single street? I've always wanted to know this as I see these big numbers often (in movies mostly )

Thirdly, Detroit? Isn't the water there like... metallic in nature? I guess I understand why the house is worth less than the family car...

 

Smart investors made money on currency play.... talking... 2011/12 investors.....

Today.... its about rising markets... but you can achieve both dependent on market

No offence to euro....Best to ignore Euro he has no idea on tax in US, He owns no properties in US and no experience. wants to compare Oz tax to US tax .... its chalk and cheese. I have been paying tax in US since 2011 I pay a fraction to what I pay in OZ

With right structures in place you will reduce tax.

You also have amazing perks like 1031 exchange which means you can sell a property and defer capital gains tax

US is far more investor friendly than OZ

 

Jump online . Look up federal taxes and state taxes for the US Then apply Australian taxes at 37% . Or maybe 32.5 , or maybe 45 . Whatever your pay in the US , You get a credit for the US federal taxes when the money is repatriated to Australia , but you don’t get the state taxes credited . Michigan charges a flat rate of 4.25% So you’ll be paying 32.5,37 or 45% in fed taxes between Aus and US ( doesn’t matter which % is paid there and which % is paid here ) plus 4.25% state taxes . so for someone already paying 37% here who then earns US income and pays 10% on it there , they would owe the ATO the other 27% here , for a total of 37% plus the 4.5% to the state of Michigan . That’s 41.5% but I was trying to give these poor US storytellers a break . For an Australian already paying 45% here the amount is closer to 50% when you add the state tax .

 

You have posted multiple times that you pay 40% .

 

No you got this wrong, confused

40% determines net returns after all costs/expenditure

My tax returns show these numbers

You understand zillow is not accurate???? Estimate could be way off???? Never rely on this stuff in particular taxes
Only way to get this right is via county

Riddle me this.... why would savvy investors buy in US if it was not cash flow positive ...... ???

Then there is a bonus...... appreciation/growth..... its a no brainer