US Buying in Texas

Discussion in 'Where to Buy' started by barnes, 4th Apr, 2016.

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  1. Ozzie in Texas

    Ozzie in Texas Well-Known Member

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    MTR - I was responding to barnes' current experience. He is a cash buyer. He doesn't need a loan from the bank. He is currently receiving bad advice from his real estate agent. He doesn't need to hand over power of attorney to purchase in the US, nor does he need to buy in someone else's name.

    My response was based on my experience as a cash buyer in Texas...the same state he is buying in.
     
  2. MTR

    MTR Well-Known Member

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    got it.:)
    I think he should go over to US to reduce risk.
     
  3. barnes

    barnes Well-Known Member

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    I wish I could, but I can't. I'll just get a better agent.
     
  4. barnes

    barnes Well-Known Member

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    Has anyone had any experience buying a house in a MUD district? I reckon it's a Texas only thing, it doesn't happen in other states, though I can be wrong.
     
  5. Munga

    Munga Well-Known Member

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    I have recently sold my Houston property. You can purchase in your own name. I set up a LLC but in hindsight I wouldve saved the money on setting up the LLC and bought in my own name with a 5mill litigation coverage in an insurance policy. I think the benefits of an LLC kick in once you own 3 or so properties.
    Feel free to message me if you have any questions specific to Purchasing in Texas
     
  6. Player

    Player Well-Known Member

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    Is 5 million even enough over there assuming the insurer pays out? I have 20 million public liability on everything in Aus in my own name, some we have in trusts and our SMSF property holdings and i was under the impression they are more litigious in the USA. I'd rather lose an entire property in an LLC in a worst case than be hunted down for excess compensation.
     
  7. barnes

    barnes Well-Known Member

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    Completely agree. That's one of those reasons why I will not rent it out. I'll use it as a holiday home.
     
  8. barnes

    barnes Well-Known Member

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    Was it a part of your landlords insurance or building insurance and how much was your insurance premium compared to property value.
    Thanks for your help.
     
  9. MTR

    MTR Well-Known Member

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    Barnes
    I can give you an idea on what I pay for insurance in US, on average my properties are insured for $120,000 each and I pay approximately $1000 pa. As far as I know there is no landlord insurance, they were gobsmacked when I mentioned this. Insurance is very expensive compared to Australian insurance and as I mentioned you would not want to claim unless the house was totally demolished.
     
  10. barnes

    barnes Well-Known Member

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    It means that you take insurance against a completely destroyed house. And that costs you about 1% a year. Now I understand why prices in US grow so slow. Investors aren't happy with all the tax and insurance that you have to pay yearly. It sums up to pretty big sum on a property which is around 300k.
    So the best way not to have any problems in the future is not to rent it out or sell it after I will not need it anymore?
     
  11. MTR

    MTR Well-Known Member

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    I think USA cycles are every 18 years, however not the case since 2011 prices have been booming, demand from everywhere including Hedge Funds, buying by the bucket load
     
  12. Munga

    Munga Well-Known Member

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    I was paying about $60 per month property insurance with a $5mill liability coverage. That particular LLC only owned one property so in hindsight I would not have bought in an LLC. My properties on the east coast I am happy are in an LLC as the total capital value is higher. Texas does have higher holding costs due to property tax but on the flipside the growth in Texas has been very good and the fundamentals are strong.
     
  13. MTR

    MTR Well-Known Member

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    The irony is the best growth in US since the crash has come from the foreclosure markets in sunny States that dropped 70% where Hedge Funds etc have jumped into, first time in history that Hedge funds invest in resi. Clearly saw an opportunity to make money for clients. These areas are almost back to pre boom times of 2007.

    I believe Texas did not have the massive drop. I think Texas and US in general is a buy at the moment, many States have great prospects for continued growth moving forward, at least that is what I am seeing. Still need to be wary where you buy, what you buy and still need to buy for high cash flow yield from my experience due to slippage.

    Amazing times in US again

    MTR:)
     
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  14. eyespy1

    eyespy1 Well-Known Member

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    can anyone suggest websites to research property details such as capital growth, yields, vacancy rates in the US?
     
  15. MTR

    MTR Well-Known Member

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    biggerpockets
     
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