First Flip in USA Market

Tony66 · 25th Oct, 2016

Mick Butterfield said: ↑

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.
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Thanks Mick. I will send a pm.

willair · 25th Oct, 2016

MTR said: ↑

Thought this may interest some on PC, we just secured our first flip in Atlanta, has taken some time to network with the right people from wholesalers, builders/contractors, lenders etc.

Atlanta is a second tier market in US, a first tier market would be New York and third tier market would be Ohio. Atlanta is an extremely hot market been so since 2011 with multiple offers and properties closing within 4 hours. We are targeting a particular postcode because its not only hot but its very much hipster Ville and land is scarce and we see in a short time frame we can use a number of strategies such as flipping, hold 1-2 years (short flip), hold for cash flow or develop.

We managed to secure this property because we were around the corner from this property and jumped on it within the first 30 minutes. The idea is to develop a relationship with the right wholesalers, once they understand you are not a tyre kicker then they will work with you.

The wholesalers have so many investors in US and overseas they don't need or want to waste their time. Its also important to understand that in the main most of the stock on the market we would not touch, as it is rubbish, wrong location etc.

There is no stamp duty costs in USA
No capital gains if you continue buying/selling, replacing property, just need to fill out a form which US accountant sorts out.

I will keep the numbers simple, these are the bigger ticket items.

$89,000 3x2 bungalow
$215,000 (conservative end value, according to recent sales data)

$40,000 renovation (labour costs much cheaper in US)
Painting
Replacing heating/air conditioning system
Upgrading/renovating bathroom
Upgrading kitchen

The nasty surprise in US is that you pay 6% selling costs, its shared between 2 re agents, buying agent gets 3% and the sellers agent gets 3%

The time frame is from closing the deal to completing renovation will be a 6 week period.
We have the option of using cash for this deal or using a hard money lender which is expensive at 12-14%, with 20% down. This would cost around $5000 if we went down this road.

The goal probably ambitious is to complete/flip 20 per year with a view of making a minimum of $50,000 net on each flip, $1,000,000 US dollars in 12 months. What if we only manage 10, then we are down to $500,000 that is US dollars.

If we were chasing a hold strategy then we can increase our cash flow very easily but I wont mention how on this forum but this is a very attractive strategy once we do our first 20.

The numbers are not hugely impressive compared to developing property in Australia, however ROI is brilliant, entry level is low compared to Australia and if you can do volume then its a different ball game.

MTR
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all you want too watch is the way the Aussie dollar spans upwards,add the wrecking ball short term in US with who ever wins ,.imho..

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First Flip in USA Market

Tony66 Well-Known Member

willair Well-Known Member Premium Member

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First Flip in USA Market

Tony66 Well-Known Member

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