US Whats happened to The USA property investors?

i dont see those Company's around much anymore that were spruiking USA property investments, namely the Detroit areas ?
What came of these investments after all this time?
Did they get much CG ?

Did anyone invest in these places and what was your experience ?
I have seen a new Company spruiking Mid Western towns now ,even though these seems to be in poorer type areas.

I think even Las Vegas was once spruiked years ago , I imagine if you invested there back then (wasnt it 2009ish.) you possibly would of done ok ?

I wAsnt into property investing back (2007 2008 2009is) then but i remember those companies spruiking Detroit Las Vegas etc , Knowing myself i probaly would have invested.

 

Dad bought one yesterday, talked him into a second one. Not really for investment purposes but they are positive cashflow by a few $k.

Probably have 3 by end of year.

 

Through an intermediary? Which region?

 

I don't think Detroit did well. That place is still regressing. I know someone on this forum did very well in Atlanta.

 

Still hold properties in Cleveland. Not increased in value, however the exchange rate is working for us. Would not be buying now, as prices are higher than 3 years ago and exchange rate kills purchases.

 

The first is in Sacramento/California.

Leg work was done by a cousin who has no interest in real estate. I put the idea in my dads head before our dollar dropped from $1.05US. Houses then were also half the price they are now.

However the need wasn't there for him and I didn't have the cash. Since then he has seen me make money in RE and I gave him a push to refinance as APRA tightens its reigns (thanks @Corey Batt for your MB expertise).

Now he is convinced he is dying and wants to make sure everyone is okay, including my Aunty in Sacramento who was/possibly still is a prolific gambler who lost everything. The houses are to make sure the cashflow pays for her rent and needs until she passes away. I know my dad feels a lot better that he can take care of his family.

And he is enjoying the pride of owning RE in the USA.

 

@Darlinghurst Boy

They made so much money on FX+/high yeild that they paid off their debts and are enjoying long holidays on carribeen !

May be you should do the same!

 

I am surprised no growth?? Even Detroit has experienced growth.

I guess you have the currency play which is very nice.

How do you find maintenance cost, Cleveland Mid West State. harsher climate, cyclone etc.

MTR

 

Hi MTR,
possible a little growth, however I believe we overpaid for a fully rehabbed product initially. We have had higher than expected maintenance costs, compared to what we allow back in OZ. We allow 4-5% for maintenance. We have had some shocking tenants that trashed the property and did a runner, that cost a bomb, even though we had insurance.The really bad storm a few years ago, cost us a new side fence.
Overall they are what we expected and the currency play was half the reason we went down the US path, so that is working well. Our original plan was to try and double our money in 5 years, by recapturing some of the lost equity in the properties, all were purchased at less than 55% of highest last sold value. Our current managing agent stated we would probably just recoup our investment in US dollars if we sold now, that would include selling fees. We did buy when the OZ dollar was at $1.10 so it was brilliant time to buy.
They don't cost us to hold them, so will persevere for a while. Historically I can predict a jump in the market, it is always about 3 months after we sell something!
Cheers
PP

 

I think there has been great opportunities in Australia so no need to look outside.
But with the dying Australian dollar I think it has scared a few people.

 

Yep, timing is everything

 

Unfortunately many wholesalers were ripping off foreign investors selling US properties with 50% + mark ups. Also selling in not so desirable areas.

I know some investors who just bailed out as it got too hard.

MTR

 

The only way is to go over there and look yourself.
There are obviously no restrictions to foreign ownership, some very low prices i noticed in mid western areas , and good rental returns but im not sure of overseas property investments.

 

We thought we had done all the right things. We spoke to many people, (thanks Karina and others), went to the US and viewed 5 cities, paid for a gurus education and advice, set up bank account good structures and were advised by lawyers and accountants. We have still had issues and stress and our plans have not come to fruition as yet.
The biggest thing we found was the lack of personal accountability displayed by people in the US. Is it that hard to do what you said you would??? American property investing is very different to OZ, we were not prepared for how different it was. Having held a reasonable portfolio in OZ for many years, we were still surprised on many occasions. The best one to date is being sued, as a tenant had a dog that bit someone on the street. The lease did not allow the tenant to have a dog and we were not aware of the dog on the premises. The bite did not occur on the premises. Our insurance company paid the claim as it was easier than going to court. That is what they do in the US, still irks me that our insurance paid the claim. The tenant was never held responsible for their dog and the dog was never checked for being a dangerous dog, still at large, thankfully elsewhere.
We are still going along for the ride with this one as we believe there is an upswing in the near future.
Cheers
PP

 

That's not the answer, foreigner investors can still make the wrong choices.

Those who paid 50%+ over the true value did not understand that there are tools available to check the last sale price of any property in USA ie zillow and to also research sales in the same sub division.

It is also important to find out how much building costs are per sq ft,another way to work out whether you are paying too much. For example in Atlanta prior to the crash building costs were around $90 per sq ft, we were buying at anywhere from $18-30.

I agree with PP, US property a different beast, and plenty scum bag companies ready to rip off investors.

IMO now is not the time to buy in US unless you have US dollars.

PP
How awful, I hope things get better for you, fall of Au$ will help. Hopefully you will achieve good growth within the next few years.

Curious, you did not buy from Karina? I assume it the entry level in Atlanta as higher than your purchases

MTR

 

We were active on Zillow and Trulia and used Real Wealth Network to guide us with cities and wholesalers, since seen the error of our ways!!!. We went to Atlanta and spoke to two wholesalers and that was our second choice behind Cleveland, as the price point was lower and returns higher in Cleveland. We spoke with Karina and were receiving regular property updates from her. We also spoke with Emma regarding Las Vegas.
Hindsight is wonderful and if we had chosen Atlanta we would have been ahead of our timeline by now.
Live and learn and stay in the game, that's how you get ahead.
Cheers
PP

 

Ok I have been involved in America since 2005. I have a partner on the ground in Florida. I tell you this because after working and dealing in America for many years I have learnt a few things.
Firstly everyone says the Americans have a can do attitude and they do. However they don't have a cant do attitude. Now what do I mean by that. Pick and the phone and ring three separate agents in the states and they will all tell you they can deliver for you. When you have lost money you will then know that they did not know what they are talking about.

Secondly If you want to invest and do it yourself figure out where you want to invest. I would suggest warm weather states I really like Texas and Florida however I am sure their are many other places. Once you work out where you want to invest be prepared to go there for at least 3 months to try and work out where to invest and give yourself time to build your team.

The third way is to find someone you can trust

If you are not prepared to do these things do not waste your time, America is a great place to make money but its easy to lose it. Many so called wholesalers are not even in the cities where they source properties and can you imagine the chances of you buying a dud.

Dont get me started on Detroit. Just do a search on deserted Detroit and look at the pictures. There are 79,000 vacant buildings, a 39 story office building was recently purchased for $5 million that was worth 100 million when it was fully let. Its freezing in Winter so the pipes freeze over if vacant. Its a dying city and their are much better options.

 

Buy in Warm States, yes absolutely.

Problem for many is they trusted the wrong people.

Next question, how do you find people you can trust???what ever they offer you in terms of properties ensure that you have the tools to determine the correct value, that is the first step. I still believe flying over is important, we did this twice.

I guess dealing with Karina worked for me as she operated with integrity and charged a BA fee only, not 50% above true market value, which is what many operators were/are doing, fortunately Au$ up so they will probably be OK, but still concerns if they purchased properties with harsh climates and older properties.

MTR

 

I would agree with you MTR I think in the current market in the US you need to look at buying opportunities. rather than straight investments. How do you find people to work with thats a hard one because everyone will tell you what you want to hear. To start with are they based in the city in which they are buying properties. If not how do they do due diligence. Of course they do not do any.
Is the person on the ground in America a fully licenced agent. My partner is a commercial specialist and carries a fully real estate licence. Now being an agent does not mean they know what they are doing LOL but they are at least compliant under Florida state law. May states are different but in Florida you must be licenced to deal in real estate

 

The boomerang buyer's may help with price growth in the USA. Apparently 7.3M people went through foreclosure or short sales and over 700k will have repaired credit this year and be able to access normal mortgage facilities.

BBQ Sauce http://www.postandcourier.com/artic...buyers-poised-to-return-to-market-with-a-roar