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  • What do you think about buying property in the US

    I found this site and it is a good read. It is very detailed, complete with stories about everything she went through investing in properties in the US. That includes both good and bad experiences.

    I'm just looking for other property investors out there who might be looking to invest in the US or have in the past.

    MJ

    seekingfortuneinnewyorkstate.com

  • #2
    Hi,

    The USA is virtually a whole continent. Its vast expanse includes every climate type from the frozen areas of Alaska to the desert climate of Las Vegas to the tropical paradise of Florida. Florida and Las Vegas are the most popular property areas for visitors. The popularity of these locations is due mostly to the attractions and warm winter holiday destinations for many Americans. Florida is also a property hotspot for many Germans and North and South Americans too. The popularity of attractions such as Disney World, Universal Studios, more than 1,000 golf courses and the Vegas casinos attract visitors from all over the world and boost a healthy demand for rental properties in these areas.

    As per the above information the top property area of the USA has to be Florida, which attracts more than 40 million tourists per year and is still among the world’s top tourist destinations. Although the property market has slowed, the advantage is that prices are comparatively low and represent a good investment both for the property investor and those seeking a second home. You can also get more updated information from the “Real estate” section in “Servana.com”. Lots of self-employed businesses and real estate agents are registered there.

    Comment


    • #3
      i think florida has been through at least 2 real estate booms where those that got our early made a killing and those that got in late got killed

      hard for me to imagine that an investor in nz is going to find the bargains before a local and be able to read the signs to get out before the locals do

      just my take

      http://en.wikipedia.org/wiki/Florida...m_of_the_1920s

      http://www.doctorhousingbubble.com/
      Last edited by eri; 20-05-2010, 10:03 PM.
      have you defeated them?
      your demons

      Comment


      • #4
        Ask me anything...

        Hi MJ and other PT'ers!

        Save your $30 and ask me anything, as I'm sure I can give you more detail than any PDF book will.

        I'm investing in NY State and did over a dozen deals in my first year alone as a "NY Novice". We now have a 100%-investment focused commercial office in Rochester, NY with 5 full-time staff to run our operations, including a licensed Real Estate Broker, a R.E. Agent, 2 (maybe soon to be 3) support staff, and a Business Manager.

        All the best,
        Michael / CanucKiwi


        Originally posted by mjmccabe76 View Post
        I found this site and it is a good read. It is very detailed, complete with stories about everything she went through investing in properties in the US. That includes both good and bad experiences.

        I'm just looking for other property investors out there who might be looking to invest in the US or have in the past.

        MJ

        seekingfortuneinnewyorkstate.com

        Comment


        • #5
          No offense intended towards Donna Cox

          Just to clarify and head-off any misconceptions that my previous post may construe;

          I don't know Donna Cox, I'd never exchanged words nor even heard of her before today, and I certainly don't mean to imply that her e-book has no value. I don't know the first thing about her or her book.

          It may be a very good book with a lot of useful content, and she may be a very nice person, however, I'm simply offering to share what I've learned about investing in the USA, and specifically NY State, for free.

          My partners and I have built a solid end-to-end business around cashflow investing that produces repeatable results in the 30% Gross Cashflow with 17% - 25% Net Cashflow left after paying all the costs of ownership and property management. We make our money by investing and by helping our clients invest, rather than by selling information and leaving people to struggle with implementing it themselves from overseas... that's all I was meaning to say.

          all the best,
          Michael / CanucKiwi

          Comment


          • #6
            There are a lot of opportunities for new investors of real estate to invest in USA especially it's areas like Florida and Alaska.

            Comment


            • #7
              Hi Mighty,

              Depends on what you're investing for. Florida, I would consider a speculative buy... you'd be trying to "time" the bottom of the market and hope that one day you're going to see value growth.

              Will that day come? I'm sure it will. When? Who can say...?

              I know nothing of Alaska except they apparently have a lot of dogs wearing lipstick at their ice hockey arenas, at least according to former Governor Palin. I wouldn't go to Alaska with my money, simply because it's so isolated... it's got some natural resources and some oil, much of which is under highly protected land and native land. Again -- speculation if you ask me. Remote areas that are reliant on one or two natural resources are VERY boom/bust in nature, and if the well runs dry or the demand shifts, the place becomes a ghost town.

              I'm personally investing for cashflow in NY State markets with over 1 million population and diverse industries, including high tech, healthcare and tertiary education (growing knowledge-based industries that are not resource-reliant). Good times or bad times, I'm getting paid, and I'm not holding my breath that some day the former (unrealistically inflated) value will return to my investment.

              My houses aren't glamourous, trendy, or sought-after by the vacationing crowd, but they pay my bills day in and day out. I'm investing to grow my long-term income, not my ego, so I'm not worried about trendiness or what the current "MTV generation" would say if they viewed my portfolio on a bus tour.

              In fact, I often think of my rental houses like the engine in my car -- it doesn't have to be "pretty" to do the job of getting me to my destination. I keep my engine and houses clean, well-oiled and in an exceptionally good state of repair, so that they're powerful, efficient, inexpensive to maintain, and work reliably 365 days a year, because that's what matters most to me; turn the key and it delivers on the promise every single time.

              Having formerly chased capital gains waves and trying to time the market, cashflow is all I want now, because that particular roller coaster ride was giving me motion sickness. The work involved in searching for and researching "the next hot area" continuously is a HUGE time-eater, too.

              I advise people not try to get rich quick by speculating, but rather to actually get rich reliably and with certainty... and yes, relatively quickly to boot with 25% - 30% gross yields that leave 15% - 20% on the table after all expenses. "Cashflow is king", particularly in uncertain times.

              Maybe that's not the game for everyone -- someone with millions of dollars in "play money" that they can afford to wait for a return on (aka "patient capital") may be well suited to speculating on the market at the moment. However, it's my view that for 99% of punters who don't have the time nor capital to hold dormant assets in hopes of a future gain, growing long-term cashflow is probably the most prudent approach in any given market.

              Comment


              • #8
                Great post with some top advice there Michael.

                It seems there are a myriad of opportunities within the states and every agent and their dog is selling something. The market is becoming saturated with agents trying to capitalise on the downturn by selling foreclosed units to investors everywhere.

                With that in mind., the prices remain competitive and I personally wouldn't recommend buying a foreclosed unit direct from the banks, not unless you want the hands on approach. in usual circumstances, foreclosures are a complete mess. Sometimes with HOA's and taxes outstanding, carpets and AC units need replacing, walls need painting - to make a foreclosure habitable, usually it requires a lot of work. Good for someone that is looking for a project but bad for the avid property investor who wants a turn key, hands off investment.

                The facts remain that the foreclosed market is still going strong, in fact a third of all investment in to the Florida foreclosed markets are made up of foreign investors that want to capitalise on the long term hold, not to mention the once weak USD.

                As Michael mentioned, who knows when the market will bounce back to what it was in 2006 but I personally think that in time, Investors will kick themselves for not owning a property for as little as 50K USD in a one of the largest tourism hotspots and third largest continent in the world.

                I have dealt with property in Florida, Orlando, Tampa, Fort Myers, Miami and Sarasota - there are still some superb deals to be had and with rents remaining consistent even though they are depressed from peak pricing.

                I often get asked, why invest overseas when I can invest in to my own country and keep a close eye on my investment? In some respects, I agree and this comes down to personal preference and security. But you have to remember, It's the fluctuations and downturns in the worldwide market that create such great opportunities for investors, whether they are overseas or not. Downturns are the prime time to start looking for opportunities and perhaps down to ignorance, I'd hate to know how many times we've allowed these opportunities to pass us by unnoticed.

                Great work Michael, If I were in the financial circumstance to secure an opportunity within the market. I wouldn't think twice.

                Comment


                • #9
                  Too right James,

                  to clarify and expand a little on my previous post...

                  If you can get positive cashflow in a market that can also deliver capital gains (FL, CA, NV, AZ) at some point in the future, that's a good combo if you're looking to fund your retirement and you've got time before you need to think about pulling your money out. Good for someone who's got a good, stable job that they want to ride out until they're 60 or 65, etc. and they don't particularly want or need the extra cash today, and can afford to wait 7-10 years for their big pay day to come along during the next property heat-wave.

                  My only caveat on buying in capital gains-focused markets, particularly at this time in the economic cycle, is to make sure that the property covers it's own expenses and gives you something to show for owning it TODAY in case you lose your job, or can't work due to illness or injury, etc.

                  I'm steering people away from speculating on the mansions that may have sold for $3,000,000 in 2005 or 2006 and can now be had for $2,000,000. Chances are they were never worth the $3,000,000 to begin with, because so many of the buyers at that time should never have had access to the volume of super-sized, super-cheap mortgages they needed to buy those sorts of homes in the first place.

                  People do crazy things when they're addicted to something... paying any price necessary to get their fix. In 2002-2007 the economy (read: many consumers!) were addicted to cheap lending, and lots of it. They battled consumer-against-consumer in multiple-offer struggles to get their fix, and paid any price to secure the dream homes they thought they deserved, based on the work they hadn't yet done to deserve them.

                  Now, all those consumers are in rehab and the economy is experiencing withdrawal symptoms... you have to wonder what the real underlying market value is of something that was once bought for, say, $3,000,000 at multiple offer. It's only worth what someone else is willing to pay for it, but there are very few people around these days with the kind of borrowing ability (given lending changes) or capital in hand to buy these high-end properties. If the total market population is reduced by 2/3 from peak, is it fair to say the value was reduced by 2/3 from peak as well? In reality, it's actually a lot more complicated than that.

                  The big bargains are being heavily marketed in the US right now, but that doesn't mean tried and tested investing rules go out the window and anything with a "huge" discount is a sure-fire winning deal. I think it's because of all the press hype that I probably get the most inquiries from people asking me about buying this sort of stuff and I just can't advise it. The sense of disappointment that comes over people as I talk to them is palpable... but then I mention how they can get paid forever, and they start to see the light. It's just that there's no glitz or glamour around "buy this instead, and get $1,400 thrown at you every month for the rest of your life" compared with "buy this at a $1,000,000 discount and instantly re-sell it for $500,000 more!" (good luck -- if that's the case why hasn't someone local to the property already done it before they had to go looking overseas to find the next "Greater Fool"?)

                  Sure I'm stretching it to the extreme with the $3M home example. Whether it's the million-dollar homes or even a $200,000 home... I don't advise buying anything that doesn't cover its own costs these days, and give you a little more on top for safety. Either go for strong net cashflow to "paying your bills today" and live the cashflow lifestyle (my personal strategy) or... buy something with a capital gain potential, but that still has enough cashflow to FULLY support the cost of owning in the meantime, and buy yourself a tank of petrol* every week, simply because I believe you need to have surplus rental income to cover the unexpected.

                  Depending on the investor's desired outcomes, both of these are viable, but in any event, now is not the time to gamble on a big rebound in the USA to make oneself an overnight millionaire. If that's your game, may I suggest that SkyCity is waiting to welcome you. haha!

                  *offer not valid for Tesla Roadster owners!
                  Last edited by CanucKiwi; 08-07-2010, 01:09 PM.

                  Comment


                  • #10
                    Originally posted by JMCI View Post
                    in usual circumstances, foreclosures are a complete mess. Sometimes with HOA's and taxes outstanding, carpets and AC units need replacing, walls need painting - to make a foreclosure habitable, usually it requires a lot of work. Good for someone that is looking for a project but bad for the avid property investor who wants a turn key, hands off investment.

                    This is a biggie if you're buying sight-unseen (site unseen?!). There are often defaulted back-taxes to be covered on the foreclosures we buy in NY, and many years of deferred maintenance to be caught up on. That's why we've got 5 full-time crews (about 20 guys in total) working for us to take care of that stuff. We can get the work done at our price, with our buying volume, and a one-off buyer who has to run around to a dozen different places to get quotes just can't match, and if they're overseas, will never know who's right if they get conflicting stories from different people.

                    As you said... good if you want a project, not so good if you just want a financial return sans headaches.

                    Comment


                    • #11
                      Originally posted by CanucKiwi View Post
                      Hi MJ and other PT'ers!

                      Save your $30 and ask me anything, as I'm sure I can give you more detail than any PDF book will.

                      I'm investing in NY State and did over a dozen deals in my first year alone as a "NY Novice". We now have a 100%-investment focused commercial office in Rochester, NY with 5 full-time staff to run our operations, including a licensed Real Estate Broker, a R.E. Agent, 2 (maybe soon to be 3) support staff, and a Business Manager.

                      All the best,
                      Michael / CanucKiwi
                      Hi Michael,

                      I'm new to this site, and new to property investing.
                      I've been researching how to get started in investing in US property, but haven't found any inspiring advice to lead me in the right direction as yet.

                      Could you post some information on finding agents, the best way to buy, how to find an honest property manager etc.
                      Also do you have a website with infomation on your commercial office in NY?

                      Any advice would be apreciated.

                      Regards

                      Dan

                      Comment


                      • #12
                        Heads up re USA is to know that most Americans don't invest in property.

                        Hell heaps of us don't even have passports, let alone think of financial leverage.

                        So don't assume the best deals are being snaffled by local investors.

                        I have built portfolios in 2 cities and am amazed that the properties sit on the market as long as they do.

                        Unlike New Zealand where I am already getting frustrated.

                        Comment


                        • #13
                          Hi Dan,

                          Our website is http://www.KickStartCashflow.com and it's barely 2 weeks old, even though this group of businesses has been running and growing for several years. (Running a business without a website?! Criminal, I know!)

                          As for how to get started, there's plenty of information out there.


                          I've noticed that there seem to be three main ways to go about getting it:

                          1) paying an exorbitant amount of money (sometimes enough to have done a deal!), or
                          2) finding it out yourself by researching and asking others.
                          3) have someone (like us) to help and guide you through the process (which we don't charge for, if you're intending to invest with us)

                          (The next bit may be a bit basic, but I don't know what level you're starting off at, so please bear with me if this starts off a bit simplistic... I certainly don't mean to sound condescending, although sometimes new or "yet to be" investors overlook some very basic steps, so I'll start with those.)


                          There are a few things you'll need for success, safety, and optimal profitability in Real Estate in the US. All of these are things that we did personally to get started ourselves. Basically, the to-do list looks like this;


                          - first, foremost and ALWAYS... know what your goals are! Why are you investing?

                          - check your goals against the reality of what others are doing to see if they're realistic and achievable (I meet a lot of people with wildly big dreams in real estate. A lot of which can be traced back to the Get-Rich-Quick seminar speakers. Dreaming big dreams is great, but to get started you need to be grounded in "how it really is" before you have a hope of achieving any real success.)

                          - figure out what strategy you'll need to use to get to your goals

                          - find a market and sub-market area that's lucrative for the types of deals you need to achieve your goals; make sure it's bursting at the seams with opportunities, that way you know it's got rich soil. I personally avoid "hyped up" cities, areas, and strategies as a rule. Media hype blurs your focus, and draws in a lot of people who hear about the latest thing and flock to it... typically destroying all that is good about that area as they swarm. I prefer to find little-known niche markets with relatively minimal mention in the press, and little competition. By "little-known" I don't mean "little" in terms of size, population, or economy. (Rochester is the size of Auckland in terms of population, and a whole lot easier and faster to drive across, around, and through.) By choosing those sorts of markets, I can work my deals with a minimum of overcrowding and "hot market sharks" swimming about competing for the good deals and all the problems that come with that.

                          - if your identified market just so happens to be in the USA, get tax/accounting and legal structuring advice from an expert in the US tax treaty with your "resident" or "domiciled" jurisdiction (so, for example, NZ-USA tax treaty and legal structures specialist, if you are tax resident and deemed domiciled in NZ).

                          - set up the structures as prescribed your specialist's advice (typically set up in a state that you will be doing business in, this makes it MUCH simpler! Avoid the "must be in Nevada or Delaware" type arrangements, unless that is where you plan on doing business, as it will become a compliance nightmare later to get all the required Certificates of Good Standing to do business in other states)

                          - call the IRS and get your EIN or ITIN number (Employer Identification Number / Individual Taxpayer Identification Number) from the IRS for your entity(ies).

                          - you may then get a subsequent tax registration request from the State, depending on where you are setting up.

                          - set up a bank account with a good major bank that has good internet banking, and get familiar with how US banking works (slooooooow and antiquated!). I'm with Bank of America... but we have sent NZ investors to HSBC, and I also have connections with CitiGroup in Auckland and their 5th Ave HQ in NYC who can help NZ investors out. (The main thing is that you'll need to prove your identity to someone from the same banking group in NZ, unless you want to fly over here to set up an account. A passport is deemed adequate proof. A drivers license may not cut it, unless you have a lot of other stuff to go with it... I just say take your passport!)

                          - find your power team on the ground in your market... real estate lawyer, real estate agent, property manager, valuer, property investor's clubs and associations; this part can be a trial and error experience. Network... talk with other reputable investors with no agenda, and ask them for referrals. If you hear the same name 3 or 4 times from different people, there's probably something to it. You want people with experience, integrity, and who know the market inside out, street by street.

                          - ask the locals how they do their deals that match your strategy -- ask them to teach you. Most investors are very genuine and willing to help you, particularly if you offer to do a 50-50 Joint Venture (protect yourself appropriately with a REAL, lawyer-approved JV agreement, NOT a handshake!)

                          - start slow and grow from there, so that you can deal with the inevitable roadblocks and pitfalls at a slow and manageable pace, not rocketing into a brick wall!

                          - grow slowly and organically, expand your team.

                          - achieve your original goals

                          - set new ones!

                          That's basically it. That's what Matt and I did (separately and at separate times -- he guided me), and that's what our other investors do. Of course, since we've done it ourselves and helped lots of other people, we've practiced enough and paved the road so we can walk people through it almost effortlessly now. We've got the tried-and-proven connections to send people to, and all that. When I came onboard with Matt and Steve, I said that it would eventually have to be a hands-off process for me to invest with them, because at some point Rebecca and I will be returning to NZ, and we will need to have everything turn-key at that point, so we can own and manage our properties from the other side of the world. Of course I realized that if it was 99% hands-off for me, it could be for other overseas investors, and we began the process of paving the way, and creating the "turnkey cashflow" systems. I knew NZ and Aussie investors would eat this up because the ROI is just unheard of.

                          About the website


                          As I said, it's very new.
                          We've got a bit of information there about what we do, but lots more content and features to add as we have go. For example, only 2 out of the 8 people in the office have made the "About Us" page so far.

                          You can see a selection of deals that we've done in the past 6-or-so months (Those shown are not all the deals we've done recently, just a selection of a few different types for illustration purposes of what type of deals we put through. There's no point in uploading the 25-30 deals from the past 6-8 months just to show examples.).. There are few that are live at the moment, although two are being negotiated on at this moment. (..maybe not by the time you read this, as it's supposed to move forward to a deposit today or Monday.)

                          Take a look and see if our strategies and results suit your goals... if so, great, let's talk. If not, no worries... just an offer to consider. The ROIs are completely unheard of compared to what you get in NZ, and the risk is a LOT lower if you know what you're doing and how to do it well.

                          Transparency never hurt anyone except the guy who has something to hide... so this is how we make our money, typically 3 ways;
                          1. we cashflow the properties while they "sit on the shelf" (thus we have no urgency to sell them, so no sales pressure or hyped up pitches, etc -- we don't need to sell to make a profit)
                          2. - when we DO sell a house, there is a profit component... not hundreds of thousands of dollars (our average deal is only about $50,000 USD after all), but it's still a profit.
                          3. - we're also investors ourselves, and we have our own portfolios of properties just like these.

                          How we do what we do

                          - we buy houses direct from sources (not readily accessible to the general public, as we've cultivated relationships for years to make the connections to get the best deals before they are even "deals" -- perfectly legal and ethical, it's simply the way the market works in the USA; connections are the make-you-or-break-you of buying houses)
                          - we renovate the houses; about 28-30 guys are working on our houses at any given time, spread across 5 or maybe 6 crews now (this is not my area of focus or management, so I'm not up on the exact number of guys and crews, but that's pretty close). We try to renovate anything that's an obvious "within 5 years" issue. We often replace furnaces, hot water cylinders, all the plumbing, roofs, install vinyl clad double-glazed replacement windows, etc. Our average reno is perhaps $10,000 - $15,000 per house.
                          - we screen and place tenants, or find Rent-To-Own clients who will eventually buy the house from us, but will rent in the meantime
                          - we manage the properties and profit as describe above

                          That's it... we don't get any commission or anything by referring people to our lawyers, accountants, bank, etc. (all we get is a huge amount of loyalty, because, as a group, we represent a huge amount of business to our suppliers.) No kickbacks means the lowest prices are available for everyone.

                          Hope that helps. If you want any further insight, please tell me exactly what you need clarified and I'll see what I can help you with.

                          All the best,
                          Michael / CanucKiwi

                          Comment


                          • #14
                            Originally posted by Dissindat View Post
                            Heads up re USA is to know that most Americans don't invest in property.

                            Hell heaps of us don't even have passports, let alone think of financial leverage.

                            So don't assume the best deals are being snaffled by local investors.

                            I have built portfolios in 2 cities and am amazed that the properties sit on the market as long as they do.

                            Unlike New Zealand where I am already getting frustrated.
                            Hi Dissindat,

                            I'd say it's safe to say that the majority of people anywhere in the world don't invest at all, let alone in property!

                            Americans, on average, though, are more apt to invest in the stock market than real estate.

                            In terms of deals sitting on the market... I can't speak about everywhere, but in our area of Rochester NY, those are typically the ones that the locals have picked over, and even then there aren't that many of them. The best deals don't even "appear" on the market to those who are looking from a website / street-sign / newspaper listing point of view, because they're done with a phone call from the wholesale supplier to our office. (Remembering that the banks and finance companies have ultimate discretion on how they dispose of the houses, because through the NY foreclosure process, the mortgage lender ends up owning them outright, not forcing a mortgagee sale.) A bunch are also pre-foreclosure, which means we buy from the home owner to save them from losing it completely. We often buy in packages, not single houses. My very first US investment was actually buying 5 houses at once.

                            One of the thing Steve is known for is the saying "We pay cash and close in 2 weeks." That keeps the phones ringing with deals, because if you've got 4-5-6 or so houses to flick, you want it done quickly and simply with someone who you know is good for it.

                            Which two cities are you investing in and how are you finding your deals?

                            best,
                            Michael
                            Last edited by CanucKiwi; 18-09-2010, 09:41 PM.

                            Comment


                            • #15
                              Investing in the US is a good idea with select property markets on the road to recovery. Jersey City locted in the New York Great Metropolitan area is an excellent location for investing seeking to gain a foothold in the market.

                              Jersey City's economic sphere is now one of the fastest-growing as Fortune-500 corporations such as Morgan Stanley, Chase Manhattan, Merrill Lynch, Charles Schwab, and others continue to bring their businesses to the city.

                              As well as being known as New York's 6th borough it has more recently earned the moniker "Wall Street West" due to increasing number of major global companies that have built office space here

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