First Flip in USA Market

Discussion in 'Renovation & Home Improvement' started by MTR, 29th Sep, 2016.

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  1. MTR

    MTR Well-Known Member

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    Not in this market, much higher entry level.
    Many cashed up investors from West Coast are buying in Atlanta for cash flow and appreciation as they say in US, capital growth

    In saying this I believe in the main US property is moving north
     
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  2. MTR

    MTR Well-Known Member

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    Update - we have now sourced finance from US bank @ 4.3%, foreign investors will not qualify, however we have a US business partner.

    Now we can LVR US$ and we have accessed equity from our flip and taken out the cash ready to purchase another property/flip 2

    LVR US$ is a massive win, if bringing money home, automatic 30% on your money. We won't be bringing money home at the moment we will just keep growing capital and look for opportunities

    MTR:)
     
    Last edited: 20th Oct, 2016
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  3. Tony66

    Tony66 Well-Known Member

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    Interesting strategy. I read that one Australian buyers agent offer US investment property. What do you think about it?
     
  4. D.T.

    D.T. Specialist Property Manager Business Member

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    I'd be careful as to where their interests lie. Ie are they finding properties in your best interests, or flipping their own (or colleagues) properties to you?

    Agents work a bit differently in america in that they can all represent a buyer. You could use any.
     
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  5. Tony66

    Tony66 Well-Known Member

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    Oh,that's tricky then. I meant an Australian buyers agent.
    [email protected]
     
  6. Beelzebub

    Beelzebub Well-Known Member

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    So you can't get finance from US banks? How's this done? Do aus banks finance international property purchases?
     
  7. Karina

    Karina Well-Known Member

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    AUS banks won't finance international property. You need cash to buy in the US if you are a non resident. Hard money lenders will finance non resident purchasers but you will be looking at a much higher interest rate, about 7.5% with www.limaonecapital.com, 30 year fixed rate loan, no prepayment penalty after 5 years and properties need to be rent ready that is not require rehab.

    Not difficult to obtain financing through limaonecapital but your structure is important. They will not finance to LLC's owned by trusts or superfunds. LLC's must be owned by an individual. LVR around 60 - 70% and you need to show enough savings to cover interest, insurance and taxes for 6 months to be aprooved.

    They also do financing for flipping but at a higher interest rate again, 10% + depending on your experience in flipping. I have financed some US property purchases through limaonecapital.
     
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  8. D.T.

    D.T. Specialist Property Manager Business Member

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    That's great Karina, thanks for providing another source. Do you know if they look at your Australian wage, or the 6 month thing is good enough?
     
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  9. Karina

    Karina Well-Known Member

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    D.T.

    They don't look at any financials other than the financials/cashflow of the property you are buying. The loan is based on the cashflow of the asset not the individual so they won't ask you for any financials, job verification etc other than a bank statement to show you have enough funds to cover 6 months of repayments, insurance and taxes and sufficient down payment to pay the 30 - 40% deposit required for a purchase.
     
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  10. Karina

    Karina Well-Known Member

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    MTR,
    Congratulations on your first flip deal in the US! The US market is full of opportunity and I am looking forward to seeing more details on your deal when you are ready to post.
     
  11. Tony66

    Tony66 Well-Known Member

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    Hi Karina, just interested to know about US properties. Not for short term.Do you still source US properties?
    Many thanks
     
  12. Beelzebub

    Beelzebub Well-Known Member

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    Wow, thanks for the help. With higher yielding properties in the US I suppose it can still make sense. It seems to me that if you hit a serviceability wall in Aus this could be a good option to keep moving forward.

    Additionally, If you have been playing in the market and already have properties, perhaps if it was owned by a US company or something, you later re-finance and source cheaper credit?
     
  13. Mick Butterfield

    Mick Butterfield Well-Known Member

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    I can not speak highly enough of Karina. She has just secured us another property over there after a hiatus of a few years. She knows her stuff and is on the ball always.
     
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  14. Tony66

    Tony66 Well-Known Member

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    Thanks Mick.I saw many people thought that it is too late to invest in US. What is your experience about it?
     
  15. Brady

    Brady Well-Known Member

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    Thanks for sharing @MTR - love to see some before and afters when you feel like sharing.


    So interesting that post GFC lending can be so flexible like this - I guess it comes at a premium price/rate. Thanks for sharing the info.
    What's the average yield on properties over there?
    From the limit amount of read, most properties usually require rehab, is it harder to source properties ready to rent?
     
  16. Mick Butterfield

    Mick Butterfield Well-Known Member

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    It all depends on your numbers and your goals. I am somewhat comfortable with my exposure to the Aus market at the moment so we have bought another one in the us before going again in oz next year.
    The numbers are no way as attractive as they were in 2011 when we bought however they are still good (about 14% gross). I will use an equity release to secure it, refinance over there and bring the released funds back or go again if there is another opportunity. Feel free to PM me if you have any specific questions.
     
  17. D.T.

    D.T. Specialist Property Manager Business Member

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    Who are you using for lending Mick, same as the one mentioned above?
     
  18. Mick Butterfield

    Mick Butterfield Well-Known Member

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    At this point I think so unless I can hunt something else down in the interim. Am not stoked with the rate but thems the rules atm.
     
  19. Sackie

    Sackie Well-Known Member

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    Mick are you looking to reno and flip ?
     
  20. Mick Butterfield

    Mick Butterfield Well-Known Member

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    Possibly in the future but this one was rent ready. These purchases are going to be our income in the future so it is more a b&h in a rising market for us.
     
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