US USA Investing

Hello Wonderful People out there.

After couple of investment properties in OZ, we have finally decided to invest in US markets.

For last several month have been actively doing research on US markets in various sections such as, demographics, housing sectors, unemployment, economy, etc.

One thing which I noticed was that there are so many houses on market listed as foreclosure.

What is more interesting that some of the house are not that expensive either (in range of 50-80K)

So I tend to wonder as how would the employment and wages market be in US .

Please share your thoughts and experiences here. @MTR @Karina

 

The US is a big place.

 

Just wondering is there any buyers agents anyone has previously used to purchase in the US?

If so please share your experiences with them.

 

AP121,

There are many markets within the US so its very difficult to answer your question in general terms. You would need to look at the specfics, pros and cons of each location you may be considering.

Over the last 7 years I have been buying in atlanta and have built quite a large portfolio for myself and have also facilitated hundreds of transactions for international buyers. Its been a fantastic market that has delivered both cashflow and growth.

I am currently looking at new markets and have started buying outside of atlanta in the price range you quoted ($50k - $80K) as I am chasing cashflow and there are some good opportunities also available in other cities. I am also buying in atlanta when good deals become available although supply is really down in the atlanta market for low entry priced homes. There are a lot less foreclosures available than in previous years.

Having been in the market for 7 years I have realised the power of positive cashflow and what a difference it can make to your life. What I love about the US markets is that you can buy low entry priced property that puts money in your pocket each month. One property won't change your life or make you rich but buy lots of the them and you can accumulate a nice chunk of money each month through rents. I have also found that as you build a sizeable portfolio (I just purchased property number 46 in the US) you can continue to buy properties with the US dollars you accumulate through the rents, a bit like compound interest but with houses. Every couple of months I add another property to the portfolio increasing my monthly rents. It snowballs after a while and the houses in your portfolio generate enough cash to buy more houses. The more houses you own the quicker you accumulate enough funds to buy the next property without having to borrow money.

Also due to the low entry prices it doesn't take 30 years to get your money back through rents. 10+ years and you could have your entire investment repaid to you through rents. At that point you have $0 in the deal and still own the asset that spins off cashflow. I would say the tenants in some of my early atlanta deals have paid me through rent the equivelant of what I originally paid for the homes.

 

Great information @Karina
Really eye opener to anyone looking to invest in US

 

And within cities is like chalk and cheese. LA is mostly a dump but areas within it are highly desired and valued and many of those well outside the budget for most. And some areas are just no go.

I have had several clients burned investing in the USA. I warned them. Two were taken in by spruikers. When I was there in 2016 I specifically looked at several places to see if I was wrong and considered buying a few places and by and large any place I had considered wasnt worth the effort. Cheap property is often cheap for a reason. But some areas of the USA cheap means you need to buy a number of them to make it viable.

And the most important - Whats your view on exchange rates?? You can buy a $100K place and sell it for $120K a year later and lose money if the exchange rate works against you

 

Should shame and name the companies

Most of spruikers selling crapola in 2011 ripping investors no longer around thankfully

Though recently a company in Newcastle popped up charging 13k BA fee and wont dsclose address...OMG, akin with buying in OZ and no address, sadly some investors will let greed get in the way of logic

When I started buying in Atlanta, low entry level in US was told this State was a dump/inferior but I purchased well and still buying for cashflow

Have increased my cashflow with recent purchases by about $38k net pa, started this in December 2017, purchased another property today thats 4 ..... and that is another story another day

If you can source finance happy days

 

I use Karina to purchase my Atlanta properties,she is professional and always helpful.Im quite happy about my return.

 

Thankyou @Kickstart for your kind words

 

@MTR Ive sourced financing recently. If you see any good deals and have too many on your plate, please send them my way

 

Great work
I will also be sourcing finance shortly and will keep loading up
Lots of competition for good deals

All the best, fun times continue

 

Hi

The US is a great market and been in that for almost 8 years. I prefer Florida, Georgia and Alabama.

 

I am learning so much about the wonderful US markets (the plural there is intentional).

At first I was a bit overwhelmed as there at 50 states, with about 30 of those states offering multiple large metropolis cities within them (1million+ population). That is a LOT of metro markets to invest.

To easily weed out many of these, and give yourself a much easier starting point for research/culling; you can eliminate about 35 states just by looking at these three variables:

1) State and county taxes
2) Weather events and associated costs (e.g. tornado alleys, flood-prone cities etc.)
3) States with laws that favor tenants more than they do landlords

 

Do you quarantine the excess cash from Australia (ie keep it in your LLC / S / C Corp) and use it to pay down debt, or use the cash to fund another mortgage? X Col?

 

Lot's of scenarios and options to boot. But one example is the 1031 exchange. In short, it's where you sell a property and reinvest the funds in a similar property. Capital gains could be indefinitely deferred using this option.

 

Spot on! The next step is finding the right team on the ground to manage everything and this can be your key to success.

 

Yes, I completely agree re: team building. Its everything there. Even though Im only just starting out on my USA journey, what Ive learned about team building as a core component of success, is invaluable.

With AU market(s) the way they are right now, and the political, economic, and sentiment headwinds approaching, I dont believe I should just 'stop' on my FIRE journey, just because AU markets are just plain unfavourable to me right now. So, (some) USA market(s) are very attractive to me right now and are offering positions in residential real estate that are unheard of in any comparable large-city locations in Australia currently and into the foreseeable (12 month) future.

Money is infinite but time is not, and getting to FIRE status requires a smart mix of using money AND time, to, well, make more money for the time remaining and to shift comfortably away from 'enforced' full time work, into a 'work if/when I feel like it' kind of life.

 

Some good points there @C-mac

What market(s) are you focused on? I'm focused on the Midwest myself.

 

Hi @Karina and others who own in the US

What reason you see people rent such cheap houses in Altanta? If you can recoup your initial investment in a few years time through rents why wouldn't that tenant buy that property instead of renting it. I am just trying to make sense what makes the property cheap and yield so high.

 

Many reasons:

- bad credit
- previous home foreclosure
- they don't meet lending criteria
- don't want the responsibility of owning a house
- can't scrape 2 cents together for the down payment/deposit