Join Australia's most dynamic and respected property investment community

Latest Purchase in SMSF (Atlanta GA)

Discussion in 'Where to Buy' started by Be Developer, 22nd Dec, 2016.

Tags:
  1. Be Developer

    Be Developer Property Developer Business Member

    Joined:
    19th Jun, 2015
    Posts:
    1,349
    Location:
    Australia
    933 HW.JPG Property : Duplex

    Location: Atlanta – Beltline – 5 miles to downtown

    Purchase Price: $110K

    Gross Rent: $1500 A month ($750 Each side) X 12 = $18000

    Net Rent: $18000/2 = $9000 (US$)

    Net yield: 8.18%


    Equity : Approx. $90K ( at latest appraisal – property was valued at $200K)

    I have been keeping an eye on market and cant see any stock in market for less than $200k in same area.


    All Cash : USD

    Entity: SMSF


    ( when I bought this one rate was .7755 – as of today 22/12/2016 – rate is .7215)


    I purchased this duplex at end of Aug -2016 . We secured this deal through off market channel – it is currently rented and have stable tenants


    Strategy:

    Keep it as duplex as long as we don’t have tenants drama!

    Eventually, convert existing duplex in to Single Family Residence.

    This one ticked most of the boxes for things I look in any deal

    • Is property paying itself?? Yes (in this case – returns 8.18%)
    • Can we manufacture equity by adding value?? Yes
    • Location? – few metres from school and walking distance to beltline


    I sold a dud one I had in Perth and Re invested funds in this deal!
     
    Last edited: 22nd Dec, 2016
  2. Be Developer

    Be Developer Property Developer Business Member

    Joined:
    19th Jun, 2015
    Posts:
    1,349
    Location:
    Australia
    For anyone considering buying US property using SMSF its critical to get this structure right.

    I believe the owner of the LLC needs to be the SMSF.

    Always use an accountant that understands US Tax laws as they are complicated.

    I am using a US tax accountant and he liaises with my Australian accountant to ensure it ticks the boxes and complies.
     
    Newfast likes this.
  3. Be Developer

    Be Developer Property Developer Business Member

    Joined:
    19th Jun, 2015
    Posts:
    1,349
    Location:
    Australia
    For those interested in cash flow play and looking at SMSF, rents in US are on the rise

    Here are some stats on this

    Here's how much rent prices rose in the largest markets in the country in April from last year, according to Zillow's Rent Index: (Extract)

    Rents continue to rise in Atlanta market 2016

    San Francisco outstanding, however entry level to buy is too high and wont stack up

    San Francisco, 14.9%

    San Jose, 12.9%

    Denver, 11.6%

    Kansas City, Mo., 9.5%

    Portland, Ore., 8.6%

    Charlotte, N.C., 6.6%

    Austin, Texas, 6.2%

    Cincinnati, Ohio, 6.2%

    Seattle, 6.2%

    Houston, 6.1%

    Detroit, 6.0%

    Sacramento, 5.9%

    Los Angeles, 5.6%

    Dallas-Fort Worth, 5.5%

    Phoenix, 5.4%

    Boston, 5.2%

    San Diego, 5.1%

    Atlanta, 4.9%

    San Antonio, Texas, 4.6%

    St. Louis, 4.5%

    Pittsburgh, 4.4%

    Riverside, Calif. 4.2%

    Tampa, Fla., 4.1%

    New York, 3.4%

    Miami-Fort Lauderdale, 3.2%

    Philadelphia, 2.8%

    Baltimore, 2.7%

    Columbus, Ohio, 2.6%

    Cleveland, Ohio, 2.4%

    Las Vegas, 2.1%

    Washington, D.C., 2.1%

    Orlando, 2.0%

    Indianapolis, 1.5%

    Minneapolis-St. Paul, -0.3%

    Chicago, -1.0%
     
    i_love_japan likes this.
  4. Redwood

    Redwood Well-Known Member Business Member

    Joined:
    22nd Jun, 2015
    Posts:
    450
    Location:
    Melbourne
    Great stuff mate!!! Without a loan - correct the LLC will have the SMSF as a managing member. However, your property and bank account may be legally owned by the LLC and therefore a declaration of trust is necessary. Also, why is your bank account with? It will need to be with an ADI to avoid the nasty IHA rules.

    Great to hear you are doing well

    Cheers Ivan
     
    Be Developer likes this.
  5. Be Developer

    Be Developer Property Developer Business Member

    Joined:
    19th Jun, 2015
    Posts:
    1,349
    Location:
    Australia
    Thanks Ivan

    I have got US Accountant who is familiar with Australian Trusts, SMSF and regulations etc.
    He also liaises with my accountant in Australia to ensure it all complies.

    I agree important to get this correct.

    Also for anyone interested will be posting another little gem which we close/settle on next Tuesday, this is a flip with around 24% profit in the deal. Will post this one shortly
     
    samiam and SOULFLY3 like this.