US My 5 lessons from investing in US Real Estate

Hey PropChat Investors,

I would like to share some of my experiences with investing in the US real estate market and possibly hear some stories of other investors' on this forum.

Right deal, wrong street

This is a challenge that all foreign investors face. The property looks good, the numbers work, however you have bought a good deal on paper in a bad area. In the US, a good area can be the difference of a few blocks or streets.

In the early days of my investing this was an issue because I had the wrong people on the ground advising me. When I went and visited some areas I realized the drastic change in environment only a few turns around the block can have. Complete you due diligence by having someone you can trust on the ground,

Join your local Real Estate Investment Club

All over the US in all states and county's there are groups of investors that are part of a Real Estate Investment Club (REIA Clubs). They are usually used for networking and sharing of local knowledge in the market.

As a foreign investor your main priority should be to network with as many local investors as possible. By joining a REIA Club you will instantly gain access to people on the ground that you can work with and add to your power team (more on this later on). A local REIA Club will give you access to not only other investors but crucial resources that you will need in you investment journey.

Once I found a REIA group that matched my investing philosophy, everything changed for me. I started to network with people in the same mindset as me and created some great friendships along the way. Their local knowledge and resources were pivotal to my investing journey.

Build your "Power Team"

As mentioned earlier, there is no investing in another state or country without a strong power team. Your power team will include the following:

- Realtor(s)
- Lawyer
- Accountant
- Property Manger
- General Contractor
- Title Company
- Insurance Company
- Inspector
- Local Investor(s)
- Property Appraiser

Each member of your power team plays a vital part ensuring your investment machine keeps turning. Through trial and error it took me years to find the best power team for me, but once you have it, the process is streamlined.

I could go more in depth into what role each member of your power team plays, but that might be best for another thread.

Be careful of inflated numbers
When deals were presented to me in the start, I would get interested in the "Crazy ROI" headings in the subject line. These days I proceed with caution when opening up deals sent to me from other investors. Your aim is to create deal flow to you, so that every morning you wake up to 2-5 opportunities to you look into.

Be conservative when running your numbers and don't allow for "assumptions" when doing you calculations. Have a set conservative formula and always triple check county records online for any taxes or liens on the property. With repairers, over estimate when running your numbers, this will ensure that you are running your numbers at a "worst case" scenario and covering yourself for any surprises.

Inspect, Identify, Inform

These are my three I's that I live by when I am looking at a deal. When I make an offer and it is accepted, the first thing I do is send my General Contract in to Inspect and quote me on any damages that I have either seen or not seen. Once he has Identified any issues with the property, I then Inform the seller of these issues and negotiate the price. When I make my initial offer I ensure that I have 14 business days to inspect the property.

These are just some of my methods and experience with investing in the US. I would like to hear from anyone else that either has similar methods or even question my methods.

Look forward to hearing from you all!

 

I think investing in another country can be totally different from that of Australia.

For example, in Australia you want to be close to transportation like train stations. There are other cities overseas you want to be far away from a train station to stay safe. Same goes with inner city suburbs, not necessarily a good thing in some countries.

I agree for seasoned investors, a walk on the streets and a visit to the local supermarkets tells a lot. A Friday/Saturday night out will tell even more.

 

Yeah I agree,

What I like to do when I visit a new area, I book a room on Air BNB and stay in the areas that i'm interested in. Walk around the are and talk to the locals gives me a good feel of the community.

 

Thought I’d reignite this thread as I’ve always been interested in investing in the US and missed the 2008/2009 boat as I was only 18.

I’ve been actively looking for one month now.

I own properties in the UK and Australia, so I’m comfortable with the boarderless investing, if you like and all of the intricacies that go with it (especially the hoops required to jump through to obtain finance).

I have visited the US for holidays on 6 separate occasions and travelled around Canada and the USA by Greyhound and hire car for 4 months (I saw A LOT this way)!

I’m confident that, although obtaining finance may become more difficult, opportunities will arise in the US in the coming months.

I’m looking to get in touch with somebody who specialises in property investing in the US and would appreciate anybody DM’ing me please or putting me in contact with the right people.

As I appreciate and have read, having the right team on the ground is absolutely crucial.

Thanks in advance!

 

Has anyone thought about buying in the UK? Might be some bargains in light of current events.

Just had a quick look. The pound sterling is about double AUD. Some flats look old and are on level 8. Wonder if they have an elevator lol?

A 1 bedda which is "share title" (what ever that means) is about 95K quid and can rent for 1.5K quid per month. It 's located in Romford which is only 18 miles east of London.

 

I never bought my first house with the plan to rent it and move to Australia, however, statistics showed that UK property was solid and predictable.

I would now very much encourage people to look at buying in the UK, if they can.

I bought a 3 Bed semi-detached for £189k in 2014.

I did a £17k, 8 month back-to-brick renovation (myself, after work and weekends).

It rented immediately for £925.00/ month.

It is now valued at £300k (5.5 years later).

In GBP to AUD, that translates to:

$380k purchase
$34k reno
$220k Capital Growth after 5.5 years
$430 p/w rent

The area I bought in was voted the most desirable suburb to live in, in the UK.

Try comparing those figures to Aussie property...

 

Great thread and thanks @John Makrylos for the tips. How is 2020 faring for you in this market?

Also, what state(s) are you active in, in the US?