Latest Purchase in SMSF (Atlanta GA)

Discussion in 'Where to Buy' started by 380, 22nd Dec, 2016.

Join Australia's most dynamic and respected property investment community
Tags:
  1. 380

    380 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    1,353
    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. 380

    380 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    1,353
    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.
     
    L3ha7 likes this.
  3. 380

    380 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    1,353
    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

    Joined:
    22nd Jun, 2015
    Posts:
    691
    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
     
    380 likes this.
  5. 380

    380 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    1,353
    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.
  6. USA Today

    USA Today Member

    Joined:
    18th Feb, 2018
    Posts:
    10
    Location:
    Walkerville
    Thanks for your sharing guys. And inspirational stuff, Be Developer!

    I’m dragging this old thread up because I’m looking to start my first dip into the other side soon. Today I spoke to my financial planner who told me that SMSF is not a good vehicle to hold investment properties because you can only have one property loan (no recourse?). Does that feel right to you all?

    Also, he said I’m young (not really, turned 40 now) but he said SMSF is mainly used by those in late 50+... I would understand if he meant my super balance would be higher making admin cost % lower, but his point was that being younger, there’s less tax benefits to be had when selling.

    Thoughts?

    Eric
     

Buy Property Interstate WITHOUT Dropping $15k On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia