Invest in NZ - not in US properties is my mantra

[TheLiberalLeft]

In the immortal words of Basil Fawlty:

That's, um, duck without orange or cherries.

If you don't like duck, you're rather stuck.

[Xav]

Kerry, no offence but if the only conclusions you drew were that the properties are cheap, people are desperate to sell and that getting a decent exit strategy is going to be difficult then you could have saved yourself the airfare.

DaveW, thanks for that link. Not surprising to see DeanL (username Pooomba) using his one post on that forum to expound the virtues of his business partners over there.

The concern of the skeptics on this forum is that these outfits are hawking off properties to New Zealand investors that they can't sell to anyone else. You don't need to fly to the US to discover that is true, at least for the company that Dean Letfus uses. At least one thing is contant between the New Zealand and US markets, they both fall prey to the "below value" fiction.

[fatfishandchipman]

I wonder what exnzpat would say about all this.

[Kerry Christian]

Damage

A few thoughts on the above
Why would someone rent this property if it was cheaper for them to buy it? If they cant get a mortgage, can they afford to pay the rent?
Who are they going to flip it too? If it was that good a bargin, I am sure it would have been "snapped" up a long time ago.
To service $700 per week in rent, the gross income for the household would need to be at least $100k which from my research is well above the average for the area.

Anyone can buy this property. It went to foreclosure. I was with the person who bought it - they were from Utah and planned to flip the property. As to being snapped up - there are so many properties to snap up.

You also assume that at 100k gross income - you spend 30% of your income on mortgage repayments or is this based on the interest rate? - This is what I observed and what I was told it would rent for - Take off 20% for BS

[Xav]

Sounds like the people you went with were speculators rather than investors.

[damage]

Anyone can buy this property. It went to foreclosure. I was with the person who bought it - they were from Utah and planned to flip the property. As to being snapped up - there are so many properties to snap up.

You also assume that at 100k gross income - you spend 30% of your income on mortgage repayments or is this based on the interest rate? - This is what I observed and what I was told it would rent for - Take off 20% for BS

Its the earning a $100k part which is the problem. You'd suppose that someone on a 100k plus would be quite happy paying their own mortgage on their own property and not some foreclosed rental that has surfaced.

So while I have no doubt that it might be "worth $700 pw" in the eyes of a "Property Manager", I just dont see there being the demand being there, partly because 100k is miles above the average wage why in your right mind would you want to rent a property when you could buy it cheaper.

Also, you say they are planning to flip the property, how are they going to do this. Ok so they bought low, but then you say there are so many properties to snap up. Why would anyone want to buy this flipped property when a similar one could be brought cheaper.

Are you sure you are not the one doing the buying rather than "friends"?

[Kerry Christian]

Damage

This person was a property speculator - and it was not me. They earn far more than 100K. You are confusing a "Flipper" with a Buy and Hold

I tried to relay this back to your assumption - someone earning 100k
I also know how they will Flip it - you need to go over and observe what I have seen - then write it better

Xav

yep - seen the bad one

It is called diamonds in the rough - they are there

[Kaleidoscope]

Kerry, you sound kinda desperate mate.

[damage]

Damage

This person was a property speculator - and it was not me. They earn far more than 100K. You are confusing a "Flipper" with a Buy and Hold

I tried to relay this back to your assumption - someone earning 100k
I also know how they will Flip it - you need to go over and observe what I have seen - then write it better

Xav

yep - seen the bad one

It is called diamonds in the rough - they are there

So what if they earn over a $100k, its the person / family renting it that needs to earn over a $100k that is the issue.
So while they might have this wonderful property at a cheap price they will never be able to rent it.

[Tucker]

Damage many times I have seen this here where people rent a property when it was cheaper to buy it and pay a mortgage yourself yet people still rent them for many different reasons. It's also possible to buy a cheap property and flip it for more even when there are lots of other cheap properties about, why.....? because not everyone wants to get off their arse to go and look for them like you or Kerry would. Most people are lazy and can't be bothered and remember not everyone deals in property everyday and knows the ins and outs and takes the time to look at every property on the market.

[damage]

Most people also carry out due diligence on a property they are about to buy. Therefore I doubt whether a prospective buyer will pay significantly more than what the it was bought for in the first place, esp given the market in the US.

Flipping generally only works in a bouyant market, and the US is far from that at the moment.

[Tucker]

Can work in any market

[damage]

yes I am sure it can Nigel but the odds of success are greatly reduced.

[Xav]

No thanks

From Dean Letfus's list of Atlanta properties:

Address . . . . . . . . . . . . . . . .Price. . . . . Rent. . . . Yield (after costs)
4881 Amsler Rd, Ellenwood . . $85,000 . $1,100 . . 10.01%

From Google:

For sale for $25,000

Thanks for the opportunity Dean, but I don't think so .

[damage]

From Dean Letfus's list of Atlanta properties:

Address . . . . . . . . . . . . . . . .Price. . . . . Rent. . . . Yield (after costs)
4881 Amsler Rd, Ellenwood . . $85,000 . $1,100 . . 10.01%

From Google:

For sale for $25,000

Thanks for the opportunity Dean, but I don't think so .

The best part I love about that is the fictonal rent