US Detroit

I have mentioned many times now its deferred tax.... re read my previous post

Its The ability to use CG profits immediately what is huge .....benefit to investors, in particular in rising markets

You also have the ability to mix it, take some profits home and pay CGT on this portion
My g/friend did this, with AUD at 70 she has made 40% on top of profits. Weighing this up she decided to take profits now.
The 1031 exchang suppliers can assist with the info.

Allows investors to continue making money and using their capital, rather than borrowing

US has got this right, we should follow this model in Australia, sadly wont happen

 

A stockbroker cannot buy every stock he/she recommends.
I only facilitate transactions between the buyer and seller.

 

Wylie, I bet you the council of Cooper Pedy owes less debt than City of Detroit does.....and therefor will be charging you less for council rates.

But hey.....what do I know

 

If every stock on offer was 30K and could be re-sold for 80K or more , I think that stockbroker would find a way. 50K profit per deal.... The stockbroker wouldn't need to raise much money - just 30K USD really - because the profits would self fund the business model after the first purchase. Just 100 of those deals and that stockbroker would have $5Million USD...more than enough to go out and buy 166 of these 30K properties and live off the 6 or 7K NET per annum, leaving them with a $1Million US income per annum NET

But that's assuming the properties can be re-sold for 80K + and the properties actually generate 6-7K NET USD per annum.....

I'm more than happy to turn this into a reality for you. I have made this offer previously.
I'll seed you the 500K USD cash and in 9 months ( I'll give you 12 months) we split the profits 50/50. You pay me back my 500K investment plus 500K USD if you cant hit do what you say you can do. But if you hit your targets you get 50% of the profits

If you'd prefer to start smaller perhaps we can go with 90K USD. Same offer. My 90K USD seed against your 180K USD ( my 90K + 90K more if you fail) This way we can start with just 3 properties @ 30K each .... sell them for 240K (80K each) after a month .

It's a seriously profitable enterprise, if you are buying at 30K and selling at 80K + You are talking about better than 250% returns, and you can get them almost instantly. So you can roll 250%v into 250% into 250% into 250% ...the only limitation is finding the stock.

Roll the 240K into 8 properties in Month 2 . Sell the 8 properties for 640K.
Roll the 640K into 21 properties in Month 3 . Sell the 21 properties 1.68 Million
Roll the 1.68 Million into 56 properties in Month 3 . Sell the 56 properties for 4.48 Million
Roll the 4.48 Million into 149 properties in Month 4. Sell the 149 properties for 11.92 Million
Roll the 11.932 Million into 397 properties in Month 5. Sell the 397 properties for 31.76 Million
Roll the 31.76 Million into 1058 properties in Month 6 . Sell the 1058 properties for 84.64 Million
Roll the 84.64 Million into 2821 properties in Month 7. Sell the 2821 properties for 225.68 Million

Gotta be honest with you.... at this stage if you walk away with $112,840,000 USD ( @ $158,805,375 AUD) and I walk away with $112,840,000... even if I had to wear 45% Australian tax on it ( $50,778,000 US or $71,462,000 AUD) and I was left with a paltry $62,062,000 US ( $87,343,000 AUD) I think I could live with it.... 87 Million would just about see me through ....

Alternatively, if at this stage you said to me...lets just sit on the rent... and I had to survive with a paltry $16,926,000 annual rental income ( 23.8 Mil AUD) from the 2821 properties I think I could just about live with that as well...

So yeah, given it only takes 30K to make this happen... I think that stockbroker would find a way........ but that's assuming the properties can actually be re-sold for 80K + of course , and it's also assuming each property actually generates 6 or 7K NET per annum

 

Stop using logic, maths and common sense!

 

Hmmm, okay let's discuss. Won't be a bad idea...
PM me,

 

I'd like to see independent valuations of the properties, showing they are being "appraised" at 80K +. They would need to be completed by valuation companies appointed by banks/lenders, not by you or by any other business or person other than a local bank/lender. I would then want evidence of the comparable sales they use to justify their appraisals. I would like to see at least 5 examples from sales you have made in the past 3 months in the 30-40K range, which have been appraised at a minimum of 80K .

This would provide me with some comfort. If that information is provided and can be verified, I'll have my lawyer draft an agreement between our companies.

 

Wylie, Like I've said before I've never been to Detroit (or Cooper Pedy for that matter), but what im reading here in the USA business press but also on my friends facebook posts (Jerry Paffendorf who ive mentioned before) who has been running Loveland for years since he moved to Detroit and knows more about Detroit property tax issues there than anyone on the list.

In case anyone is under the misconception Detroit has "turned a corner" a reminder that 40,000 tax foreclosure notices went out in this years batch.....

 

Incorrect.

The Tax foreclosure notices sent out number are 14,000 (for 2016) and 9000 for 2018, not 40,000 as claimed. And it is on a rapid decline. As one can see, check out Wayne county website for 2017 and 2018 figures.

This is from Loveland Technologies (who was quoted above btw)



Currently, in 2018, Detroit has 9000 Tax foreclosure notices sent out - just below the 2010 mark.
And these are the schemes the Government has in place to keep the owners from falling through.

Tax Foreclosures of Owner-Occupied Detroit Homes Down 89% Since 2015 As Result Of Prevention Efforts - Tax Foreclosures of Owner-Occupied Detroit Homes Down 89% Since 2015 As Result Of Prevention Efforts

Detroit tax foreclosures fall for a third straight year - Detroit tax foreclosures fall for third straight year

Detroit tax foreclosures fall 88% since 2015 Detroit tax foreclosures fall 88% since 2015

And check out this Blog - All independent articles - Can I Invest | Blog

 

Thanks for the correction to 9000 forclosures

 

No problem,
sorry had to correct your post,

The earlier one catches the recovery, the bigger the Profit margins.
That was the point. As an investor, we should reserve the front seats to this mega show.
By mid-2019, early 2020 Detroit will be at a hugely different price point,
as we saw the Atlanta market break through the pre GFC level...

 

No problem, and like I've said before, I've never visited Detroit. And there probably IS money to be made, especially if you live there and are on the ground.

I just don't want to see Aussie investors being ripped off thinking they are buying pennies on the dollar like this guy who bought 23 houses before he realized he got screwed - https://www.freep.com/story/news/lo...17/detroit-home-values-real-estate/921453002/

Detroit really is the wild wild west of property investing and your company might even be able to help some people make a return. I just wish you were posting cash flow after tax numbers instead of $1k rent per month etc etc.

I mean how many "Aussie mining town investors" have we seen on PC who thought they were geniuses....until they were not.

Yes investing in Sydney/Melbourne property might be flat for now.....but most of us wont have to deal with squatters stealing the copper out of your floors and walls or have negative cash flow issues due to ridiculous property tax assessments.

Anyway I think I've posted enough on this topic and this will be my last post on the potential of investing in the USA and wish you the best.

 

you pipped me, I was about to send this link...… foreclosures are shrinking... good and bad, means harder to source but prices will rise

 

Thanks Dean, it does not have to be the wild wild west as some people may make it out to be.
If you have the processes in place and the property management to take care of tenant selections and location due diligence. The same can be said of Western Sydney when I first bought a DoH house in Shalvey. I never got rent for 10 months. Bad areas attract bad tenants. And good areas attract good tenants. I am wrong to compare Shalvey with Hassall grove, though both may fall into the 'Western Sydney' category. Can I buy a 10K Detroit house in a blight zone requiring 15K rehab and 10K in back taxes - no way - and compare that with the rest of Detroit. That's where the investors fail without due diligence on location, Title, rehab estimates and tenant selection.

 

I've read through this entire thread and it reads as though those actually doing it; who are providing numbers, experiences, and data specific to the US-cities/states where they are buying; are getting shade thrown at them and are being met with suspicion and criticism.

A little motto of mine in investment has always been 'those who say it cannot be done should not interrupt those already doing it'.

 

Exactly.

 

I had a lot of bit coin "investors" tell me to buy bitcoin last year. Because I wasn't trading my opinion was worthless to them. I don't think any of them retired but ymmv

Has anyone in the thread actually brought a $30/40k property used some of Dr Guff's protects and sold for double there money in a short time? Which it is claimed they are worth.

 

As the person "throwing shade" I need to respond (lol even though I said I wasn't posting into this thread anymore).

Im saying that yes the numbers for rent look great as a percentage of a $30k purchase price.....when you don't take into account city and state taxes.

Also just to be clear also the person suggesting Aussies should jump on board and invest in Detroit isn't "doing it" he's selling to investors......

He gets to "make bank" the moment the ink on the contract is dry.......you are then the proud owner of a property on the other side of the world in a city where there are currently 40,000 properties delinquent in their city taxes.

But hey.....what do I know.

(lol this really really is the last post im making on this thread )

 

I've a simple question to Detroit investors - on an average, how long does it take to break-even with net rental income (considering all expenses/ taxes and risks)? Let's assume that I don't take a loan and buy an average property that you are recommending with 100% down payment. This is just to keep the calculation simple.

I wouldn't worry about the risks as much once I've recovered every single penny that I invested through net rental income though I understand that there'll be an ongoing outflow (expenses/ taxes) on a permanent basis, so one still needs to ensure that rent is received even after the full investment has been recovered but at least the risk will be lower.