26 properties and still working at my day job (happily)
- Thread starter Gentle_Chief
- Start date
hi Strongy,
Yes I did pick-up 2 Moranbah properties in 2007. Still own them.
They are now worth 70-75% of my original purchase price.
These two are still rented and are CF+ve till date, since I bought them at their low-point in 07/08.
In hind-sight I should have sold them in 2012 at their peak, but honestly, back then during the hey-days of the mining 'boom' did not see the downturn coming so fast. I did know the clock is going to turn, but the speed of turn was fast.
But the question is, would I now, having known what I know now, change any of those Purchase decisions?
No way.
And why not?
Because each property has given me atleast 200K+ in clear CF when I needed it most. And Capital growth. Again when I needed it the most to put together a portfolio.
That is when I revalued them in 2009 and again 2011 it gave me the funds to purchase additional properties in Sydney and VIC. Banks love serviceability. And are willing to Lend only on the basis of your DSR. And they did.
Never mind how much deposit you have, you need that additional serviceability (apart from your job). Your job only allows serviceability to own your PPoR. The rest comes from the portfolio. And the first few properties one picks are key to their portfolio growth graph.
So a property in a portfolio is like a eco-system - could be individually weak at a given point of time, but it could have been a good decision when you look back cause it causes "Synergy".
I am seriously looking at Moranbah again.
Yes I did pick-up 2 Moranbah properties in 2007. Still own them.
They are now worth 70-75% of my original purchase price.
These two are still rented and are CF+ve till date, since I bought them at their low-point in 07/08.
In hind-sight I should have sold them in 2012 at their peak, but honestly, back then during the hey-days of the mining 'boom' did not see the downturn coming so fast. I did know the clock is going to turn, but the speed of turn was fast.
But the question is, would I now, having known what I know now, change any of those Purchase decisions?
No way.
And why not?
Because each property has given me atleast 200K+ in clear CF when I needed it most. And Capital growth. Again when I needed it the most to put together a portfolio.
That is when I revalued them in 2009 and again 2011 it gave me the funds to purchase additional properties in Sydney and VIC. Banks love serviceability. And are willing to Lend only on the basis of your DSR. And they did.
Never mind how much deposit you have, you need that additional serviceability (apart from your job). Your job only allows serviceability to own your PPoR. The rest comes from the portfolio. And the first few properties one picks are key to their portfolio growth graph.
So a property in a portfolio is like a eco-system - could be individually weak at a given point of time, but it could have been a good decision when you look back cause it causes "Synergy".
I am seriously looking at Moranbah again.
hi MTR, Sash,
The Atlanta properties are all mostly the 'newer' properties built post 2000. Check out the pics posted in the Member's Gallery.
http://somersoft.com/forums/gallery/showgallery.php?cat=500&ppuser=9427
I have had them revalued last month for an Equity loan and most of them are around the 110-130K mark. Two are around the 170-180K mark and one has come back at around the 90k mark.
Rents are pretty close to where you describe it: between USD 900 - 1350 per month. Median rent being 1100 usd.
The counties that I have been scouting and working on are Henry, Clayton and Newton counties. Travelled a few times to the USA and picked up the properties there. Infact I was there even in Nov/Dec 14.
I have bought one property from Karina too. She has been great to work with. Very professional and I recommend her for the due diligence and guidance. Infact Karina and I met in Atlanta for that property (3675 Glenmoor Dr) prior to purchase. We still do keep in touch over a coffee in Sydney every now and then
I believe US is in the 9 O clock mark and still has some more steam to blow off. However, the downturn we just saw of 2008 is once-in-a-lifetime event and we are not going to see those prices again unfortunately. Though the downturn started in 2008 the rock bottom was in 2011/12.
If you don't mind sharing your experience in the US, would be good to learn.
The Atlanta properties are all mostly the 'newer' properties built post 2000. Check out the pics posted in the Member's Gallery.
http://somersoft.com/forums/gallery/showgallery.php?cat=500&ppuser=9427
I have had them revalued last month for an Equity loan and most of them are around the 110-130K mark. Two are around the 170-180K mark and one has come back at around the 90k mark.
Rents are pretty close to where you describe it: between USD 900 - 1350 per month. Median rent being 1100 usd.
The counties that I have been scouting and working on are Henry, Clayton and Newton counties. Travelled a few times to the USA and picked up the properties there. Infact I was there even in Nov/Dec 14.
I have bought one property from Karina too. She has been great to work with. Very professional and I recommend her for the due diligence and guidance. Infact Karina and I met in Atlanta for that property (3675 Glenmoor Dr) prior to purchase. We still do keep in touch over a coffee in Sydney every now and then
I believe US is in the 9 O clock mark and still has some more steam to blow off. However, the downturn we just saw of 2008 is once-in-a-lifetime event and we are not going to see those prices again unfortunately. Though the downturn started in 2008 the rock bottom was in 2011/12.
If you don't mind sharing your experience in the US, would be good to learn.
Hi Gentle Chief
Some very nice houses. Thanks for sharing.
I purchased in Lithonia, Conyers, Covington and Fayetteville Counties.
I think its taken some time to get things right for me, but we now have an excellent property manager which has made a massive difference, more cash in the door.
Expenses are way down because we are paying less for maintenance issues and its streamlined.
Changed my dud accountant who had no clue how to manage USA tax etc. and cost me money, US Tax Central. Have a gem accountant now based in USA, cheaper, smarter and minimal headaches. US banks well, they are what they are, got used to their systems and rarely have any issues now.
Cut insurance premiums by around 25% over a spread of 8 properties makes a big difference to the bottom line.
When I started buying in US similar to you Au$ around 1.00-1.10.
I bring home around US$3600 per month which is now around $4500 Aussie $ per month, this forms part of my income. I use xe trade and pay around $23 for this service pa. I also leave money in US to pay for taxes etc.
Gross income pa from US property has gone from $96,000 pa (USA) to around $120,000 (Aus) now that the $Au has dropped around 76.
More than happy to share my contacts with you, but looks like your doing just fine.
Still have to be grateful for the help/knowledge of those who went before me.
MTR
Some very nice houses. Thanks for sharing.
I purchased in Lithonia, Conyers, Covington and Fayetteville Counties.
I think its taken some time to get things right for me, but we now have an excellent property manager which has made a massive difference, more cash in the door.
Expenses are way down because we are paying less for maintenance issues and its streamlined.
Changed my dud accountant who had no clue how to manage USA tax etc. and cost me money, US Tax Central. Have a gem accountant now based in USA, cheaper, smarter and minimal headaches. US banks well, they are what they are, got used to their systems and rarely have any issues now.
Cut insurance premiums by around 25% over a spread of 8 properties makes a big difference to the bottom line.
When I started buying in US similar to you Au$ around 1.00-1.10.
I bring home around US$3600 per month which is now around $4500 Aussie $ per month, this forms part of my income. I use xe trade and pay around $23 for this service pa. I also leave money in US to pay for taxes etc.
Gross income pa from US property has gone from $96,000 pa (USA) to around $120,000 (Aus) now that the $Au has dropped around 76.
More than happy to share my contacts with you, but looks like your doing just fine.
Still have to be grateful for the help/knowledge of those who went before me.
MTR
MTR,
You can save yourself the $23.00 transfer fee you are paying each month by using Ozforex (www.ozforex.com.au)
They now have ACH access (direct debit) so they can direct debit your US bank account and credit your Australian bank account when you want to bring home funds from the US.
Just let them know you are affiliated with Select American Homes and they won't charge you a transaction fee when you place a trade.
You can save yourself the $23.00 transfer fee you are paying each month by using Ozforex (www.ozforex.com.au)
They now have ACH access (direct debit) so they can direct debit your US bank account and credit your Australian bank account when you want to bring home funds from the US.
Just let them know you are affiliated with Select American Homes and they won't charge you a transaction fee when you place a trade.
Awesome
Keep us posted re: the above also
You were only looking at buying your first IP back in 2007, fast forward to now and it's a different ball game
What a inspirational story !!
Once in a life time US downturn really makes all the difference.
The combination of USD/AUD exchange rate, bottom of property price are great contribution to building up cashflow and capital gain.
Really appreciate your kindness to share the story
I would say most of his success came from moranbah?
I think he had a few properties there which at one stage would of been fetching 1500 - 2k a week a piece
So 6k a week on crappy mining town properties
Even though he's sitting on a loss from them the cash flow enabled him to buy up the US
Don't think this would be the case as GentleC purchased in 2007 in moranbah and only 2 and he mentioned they are currently cash flow positive.
He did not sell Moranbah IPs so he probably accessed equity at 80%, even if they were worth $600K each at this time, it would not come close to totally funding US purchases.
Purchasing 13 US properties, no finance, I would estimate at a cost of $850,000 -900,000 in 2011/12, these have doubled today.
Convert Us$ to Aus$ and I think it's a very attractive scenario, more than doubled capital and then the currency play on rental yield wow, this is the success story
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Yep, can't argue with those numbers - great result.
I wonder if there's anywhere in the developed world outside Australia (and NZ) that non residents/foreigners can borrow funds from local banks to buy freehold RE.
I wonder if there's anywhere in the developed world outside Australia (and NZ) that non residents/foreigners can borrow funds from local banks to buy freehold RE.
abdoug
Cash flow/yield, properties had dropped as much as 70% in Atlanta
Sunny climate, if you go to colder/harsh conditions of (mid west) you will have far more maintenance issues, more costs, less returns.
Size of the city, industry
Just ticked many boxes.
I know some investors who have had great success in these areas listed below
Florida
Arizona
Texas
Las Vegas
In the main the entry level for these States was higher than Atlanta for decent properties, so yield not as attractive. A the end of the day for me it was all about generating income, growth was not a given at that time. We were also hoping like hell that the Aussie $ would eventually go back to traditional level of 75, just did not realise it was going to happen so quickly.
MTR
Cash flow/yield, properties had dropped as much as 70% in Atlanta
Sunny climate, if you go to colder/harsh conditions of (mid west) you will have far more maintenance issues, more costs, less returns.
Size of the city, industry
Just ticked many boxes.
I know some investors who have had great success in these areas listed below
Florida
Arizona
Texas
Las Vegas
In the main the entry level for these States was higher than Atlanta for decent properties, so yield not as attractive. A the end of the day for me it was all about generating income, growth was not a given at that time. We were also hoping like hell that the Aussie $ would eventually go back to traditional level of 75, just did not realise it was going to happen so quickly.
MTR
