Your Latest Purchase

Buying now? with an AUD V USD of 0.68 cents and decreasing? Personally I would not touch Atlanta. I have invested in infrastructure funds which have been great. Flips can be hit and miss, you need a team on the ground.

 

Can you buy in the US via SMSF?

 

Yes, you pay the purchase price up front.
I used rental income I have in USA to pay for my recent purchase, not Au$.

Foreign finance is available but interest rates are generally higher. I have someone in Australia currently sourcing finance for me.

I buy larger houses 2500 sq ft, I have found it very difficult to find multi family homes probably because everyone wants them. My recent purchase was a 3 bedroom townhouse 1400 sq ft.

Yield was calculated at around 12% net on purchase. But I think it may be more, not sure?? Here are the figures
Monthly rent $895 (insurance $800, tax $1000). Purchase price with renovation - $48,000. (PM fees 8%)
If I bring the money back home you can tack close to 40% to the rental income due to the strong US$ against Au$, hope this makes sense.

US investing for me was purely cash flow play, any growth was a bonus as I did not expect a recovery. In saying this though my initial purchases/houses (2011/2012) at $35000-50000K are now worth around $150K each, almost back to 2007 prices, when the market crashed.

The first year was not too great had issues with property management and a couple of bad tenants that were evicted.
Used an accountant in Australia that did not understand US tax law which in turn caused massive stuff ups.
Banking system was a nightmare, they cancelled all my bank accounts, long story, you don't want to know.

These issues are now resolved and I would say my US properties are not too different to what I experience here in Australia in terms of management/tenants etc.
I have changed my accountant and have a very good US tax accountant, 2 years now.
New Property management (2 years now), is excellent, modelled around similar set up we have here in Australia.

In Australia I sell and buy, but at the moment its close 50/50%. I have 9 in USA and 8 in Australia, but as I develop property this changes each year, up/down.

MTR

 

Spent 2 weeks in San Jose and the prices are quite high. Amenities are good such as westgate. Nice neighbourhood.

 

Yes, only if you are happy to follow certain rules that apply to investing overseas. Its complex - we do a heap of them, but you need to ensure all steps are taken to meet Superannuation Law.

Cheers Ivan

 

Thank you for the great feedback @MTR.
Sounds like you've had some solid success up there.

The cash flow aspect of US real estate is very enticing. It's something that I will be looking into once my foundation portfolio is built in Aus. Seems a great team is key - I will have to get your contacts when I'm more serious about it.

Are there any extra costs/expenses of holding US real estate, other than the regular costs of Aus real estate?

 

Thanks for the feedback @Redwood. Very good point on number 4.

Thanks @melbournian for the feedback.

 

Accounting fees and this will be determined by number of properties and structure.

I have 3 LLCs (Limited Liability Companies), so you will have initial once off structure set up.

MTR

 

With the flipping strategy, you don't pay stamp duty in US which is a bonus, and also you can carry forward Capital Gains as long as you purchase another investment property, I believe a timeframe exists not sure what that is?

Have also been told you don't pay anymore than 15% CGT in USA.

The only issue which is big I guess is the Au$ is weak compared to US$ so its a matter of whether it stacks up on purchase.

Finance in US may be a solution, but this will require further investigation. I do know someone who just sourced $1M US bank loan accessing equity from US properties.

MTR

 

Yeah it was great series to watch and it was an afterthought if i have nothing to do in Australia. if i get a package - i will do it otherwise probably wait it out. I have some access to some USD and GBP funds overseas not large amounts and an deriative option to purchase AUD to USD 1.1 which was bought couple of years ago with a expiry date 3 years from now. only looking for cheap US purchases

 

Hi MTR

How do LLCs (Limited Liability Companies) work (apart from the obvious as per the name)

 

Try to make it simple, our Australian Trust is the member of each LLC, we have 3 and income is distributed to the Australian Trust. We pay tax in US and it is credited back in Australia.

MTR

 

LLC is the US equivalent to our PTY LTD company. It is always recommended to purchase investment property under a LLC due to America being such a litigious society. Its essentially protection. If one of your tenants sue you for any reason- it is the company that is liable and not you personally.

 

What the heck MTR, its says you posted at 1:02AM

 

Just to revive the original intention of this thread:

Feb 2016
Suburb: Woodridge
Purchase price: $335K
Rent: $390pw
Potential: 750sqm+ Townhouse zone
Highset 3/2/2

March 2016
Suburb: Crestmead
Purchase price: $326K
Rent: $480pw
Potential: 800sqm+ granny flat?
Highset 3/2/2

So deals are still there in Logan, but rarer and rarer these days.

Thanks to @Michael_X . We couldn't have achieved these without such an exceptional knowledge in Logan from him. His investment mindset and skills has helped us a lot in closing these deals!

 

I've got this house under contract. Going to be my PPOR for now
30 Muscatel Circuit Old Reynella SA 5161 - House for Sale #122375238 - realestate.com.au

 

congratulations!

 

Thanks!

 

House looks a gem @2FAST4U

 

Nice house, it looks like its in great condition.