MTR - you've bought 8 in the last 12 months?
Walk us through it?
Hi Jake
After some research I decided that Atlanta had the best prospects in terms of cash flow, more than 1 industry and warm climate. I also networked with fellow investors who had been in the game for some time.
I met up with a couple of buyers agents in Atlanta last May and spent my time looking at various properties.
In a nutshell I have been purchasing properties in bread and butter areas, 3/4bedders, no older than 10 years, approx 2000 sq ft, paying $18-25 per sq ft. building costs in Atlanta is around $80-90 sq ft.
The link below is one of my property purchases at $18 per sq ft, it was built in 2004 and sold for around $150K at the time. It is difficult to determine what a property is really worth in US as it is a basket case at the moment, ie foreclosures, short sales so this is one way of keeping it real.
My thoughts are that once building fires up again in US this is when we will start to see a major jump in prices, however in saying this the prices have already jumped.
The average price of each property I purchased was around $65K this includes the rehab/reno and associated costs and took approximately 4 weeks to complete/tenant in place. They all pretty much rented out within 1 week.
Rental income is transferred to my bank account in US and when I see the Oz $ fall back I will transfer funds to Oz. This could pose a problem if you need funds in Oz and you would need to mitigate this risk.
I personally would not bother investing in US unless you are in a position to buy multiple properties as setting up structures etc. can be costly and there is slippage ie maintenance bills, property management fees, county taxes and for it to work you need to treat it like a business.
In US my lawyer has set up loans against each property so I am personally using my own cash and charging interest at 12% this is to avoid/minimise paying tax in US.
I would tread causiously when jumping into any deals that offer finance, they have expensive set up fees, high interest rates and risky due to length of loan and the properties they are selling are outrageously marked up.
To date its been very positive for me and I would certainly buy more properties if I could purchase at this price point, unfortunately it is difficult to achieve this now.
Hi Engelo10
Yes, I used 3 BA, however the majority of my purchases were through
Select American Homes, Karina and they were my best deals, as they were HUD homes, purchased directly from the Government, better deals, if that is possible. Once again, this has changed as owner occupiers have jumped in now and they get first bite at the cherry.
http://www.zillow.com/homedetails/210-Hazelhurst-Dr-Covington-GA-30016/69877018_zpid/
Cheers, MTR