Properties with 20% returns

[buyingusare]

Has anyone had any experience with investing in the U.S. market?
Please share what you have learnt and any problems you may have encountered.

Sometimes it's best learning from those who have already made the mistakes!

 

[vaughan]

Have you done a search for "buying property usa"?

 

[skater]

You don't need to go to the USA for 20% returns. Do a search on Nathan and you will find some right here in Australia.

 

[buyingusare]

Thanks Guys.

I did a search on Nathan. Quite impressive for a 28 year old starting at 18.
However, I'm not as interested in investing in Sydney due to the 20% down payment required to purchase a property. It's quite a lot of cash where I could be using it elsewhere.

I saw a few posts relating to U.S. property investing but they have close the threads.
Anyone active out there willing to share their experiences??

 

[Melbournian]

if you don't have equity to cash to pay for the 20% downpayment, then you really shouldn't be investing in the US. Nobody is going to teach you to get 20% returns

 

[vaughan]

I looked into a US property investment thingy about a year ago, showed it to a share/futures trader friend of mine. His response was to just go buy the listed property shares directly and cut them out.

The only thing the investment people added was all the devices and instruments to minimise risk in forex movement etc to limit losses to the amount of the initial investment (a nice euphemism there). These add up and eat into the profit of course, but do put a bottom to the pockets of the investors who otherwise could be throwing good money after bad.

I decided not to invest.

 

[Melbournian]

I looked into a US property investment thingy about a year ago, showed it to a share/futures trader friend of mine. His response was to just go buy the listed property shares directly and cut them out.

The only thing the investment people added was all the devices and instruments to minimise risk in forex movement etc to limit losses to the amount of the initial investment (a nice euphemism there). These add up and eat into the profit of course, but do put a bottom to the pockets of the investors who otherwise could be throwing good money after bad.

I decided not to invest.

you're talking about 2 separate things, a phyiscal property as opposed to directly investing in financial instrument which are shares and deriatives.

you can minimize risk have having futures or options (which your trader friend should have told you) to hedge against the risk of forex depending on how much you wish to invest. if you import large quantities of certain items in australia, these are strategies businesses employ to hedge the risk.

if you're just looking to invest in property funds in the US with a smaller outlay, there are easier ways to do this - just open a CFD account and you can trade live rather than buying property direct.

 

[skater]

if you don't have equity to cash to pay for the 20% downpayment, then you really shouldn't be investing in the US. Nobody is going to teach you to get 20% returns

Agreed!

Investing overseas is not for the novice investor IMHO.

 

[buyingusare]

Agreed!

Investing overseas is not for the novice investor IMHO.

Investing should not be for anyone who doesn't have the knowledge. Period.

That's why I'm here to see if anyone has done it before.

Thanks for the advice guys and the recommendations. I'm sure there are people out there who have done it and are doing it.
I do understand that there are investments for people who are comfortable and who have exposure to what it is that they are investing in and there are those who just jump in and take high risks then turn around and say "i wouldn't do it, i'm an example".

I did a google search "property investment usa" and it came up with quite a few searches. I'm quite put off some of the websites as it's all writing everywhere...very unprofessional.


On a different note, Has anyone been to one of these seminars before about investing abroad?

 

[Ed Barton]

Investing should not be for anyone who doesn't have the knowledge. Period.

That's why I'm here to see if anyone has done it before.

Thanks for the advice guys and the recommendations. I'm sure there are people out there who have done it and are doing it.
I do understand that there are investments for people who are comfortable and who have exposure to what it is that they are investing in and there are those who just jump in and take high risks then turn around and say "i wouldn't do it, i'm an example".

I did a google search "property investment usa" and it came up with quite a few searches. I'm quite put off some of the websites as it's all writing everywhere...very unprofessional.


On a different note, Has anyone been to one of these seminars before about investing abroad?

there a couple of threads on here from Emma someone who has done it. they are very comprehensive. do a search.

 

[Peter_Tersteeg]

Yesterday I received an email from Steve McKnight promoting his latest product regarding US property investment. I'm not advocating for or against the product Steve's selling, but the message in his email does highlight some of the potential pitfalls in US investing.

I've attached a document with the content of Steve's email.

The bottom line is that return is generally proportional to risk. 20% is a very high return and it follows that it's a very high risk.

Many new investors are told by investment companies to invest interstate. Many new investors find a few years later they've been taken for a ride. IMO most of those promoting US investment are simply expanding on this strategy.

Personally I've considered some of the avenues for investing in the US and decided it's not for me. Proceed with extreme caution.

 

[twobobsworth]

For someone who wants to know more about investing in the US, has their username as buying US real estate and then a link in their profile for a site about making money from US real estate...call me cynical but it all smells a bit fishy.

 

[buyingusare]

For someone who wants to know more about investing in the US, has their username as buying US real estate and then a link in their profile for a site about making money from US real estate...call me cynical but it all smells a bit fishy.

Fishy as it may seem but I want to know more about peoples experience.
I am not here to sell so I understand your concern. If I was, i would have went straight into it.

I want to find out what peoples concerns are for the market in the U.S. I do see a lot of negativity about it and I do want to find out why.
A lot of people read second hand information, yes it may be correct, but they give judgement based on someone else's opinion.

 

[buyingusare]

Yesterday I received an email from Steve McKnight promoting his latest product regarding US property investment. I'm not advocating for or against the product Steve's selling, but the message in his email does highlight some of the potential pitfalls in US investing.

I've attached a document with the content of Steve's email.

The bottom line is that return is generally proportional to risk. 20% is a very high return and it follows that it's a very high risk.

Many new investors are told by investment companies to invest interstate. Many new investors find a few years later they've been taken for a ride. IMO most of those promoting US investment are simply expanding on this strategy.

Personally I've considered some of the avenues for investing in the US and decided it's not for me. Proceed with extreme caution.

Thanks PT_Bear. That's a great help Steve Mcknight does what he does very well.

 

[skater]

For someone who wants to know more about investing in the US, has their username as buying US real estate and then a link in their profile for a site about making money from US real estate...call me cynical but it all smells a bit fishy.

You are right! There's sharks in them there waters.

I'm usually pretty good at spotting it, but this time I didn't even smell anything. I should have known better.

 

[Melbournian]

investing in the US depends on which areas you are looking at.
As for someone who has worked in the US with a government department in the past i can say it is a different market to australia with different demographics and income levels spreading throughout the country.

if you don't have a deposit for the 20% or don't wish to outlay so much, you basically taking out the glitzy areas of say LA, san fran and new york and miami and going to less affordable areas for e.g. detroit or cleveland.

people i know who normally go into the US at the moment are looking for massive bargains and have holding power. some buy streets just to park their money and others multimillion dollar mansions. The reason ppl on this forum are saying is that investing is for someone who already has some level of knowledge to start with as it can be dangerous to go ahead without really understanding what you are looking to achieve. If you can't differentiate between deriatives and property purchases - that's pretty much dangerous enough.

but yes go to the property seminars on investing in the US and gather as much information as you require if that is your strategy.

 

[tom1000000]

Besides the fact Mr USA seems to be dodgy....

The other problem with USA investments is currency risk.

You may make a profit of say $1000 USD, which today equates to about $950 AUD.

I would say the long term trend of the USD is DOWN. So your $1000USD profit in 10 years might end up being only $500AUD. And in 20 years the US Peso will probably only give you $100AUD.

 

[travelbug]

I'm not as interested in investing in Sydney due to the 20% down payment required to purchase a property. It's quite a lot of cash where I could be using it elsewhere.

So how much deposit do you think you need for a US property. 100% for some.

That sucks up your cash pretty quick. Even at $50K a pop.

I have a friend over there buying. Went over, bought 8 properties, quit her job. Living off the CF.

 

[CHam]

Buying in the US is dependent on what you are trying to achieve and what risk you are comfortable taking on.

I looked at it very closely a couple of years ago but decided that it did not suit our investment plans. The issues I had were:

-I was looking for capital gains rather than cashflow and could not see this eventuating in the near future with US property (and looking at their economy now I still can't see much growth on the horizon with their debt levels, unemployment, etc.);
-Distance was a key issue for me;
-The difference in attitudes between us and people in the US towards home ownership and renting was a concern;
-You really need to get over there, spend some time on the ground and build relationships which was not something I was in a position to do;
-Understanding which areas were suitable to buy into (not only states but also suburbs) is very difficult from here.
-I was not 100% comfortable that prices that were being offered were not inflated by the companies spruiking the US property bandwagon. There seem to be a lot of people jumping on and this was a concern if you needed to get our and release equity in a hurry.

Also from what I have seen most of the returns are in the 10-14% bracket, not 20%. If you have the cash and are in a position to take the risk and live off the returns then good luck. However I think that the risk profile suits a very small minority.

 

[Aaron_C]

Also from what I have seen most of the returns are in the 10-14% bracket, not 20%. If you have the cash and are in a position to take the risk and live off the returns then good luck. However I think that the risk profile suits a very small minority.

If I could get a 100% financed loan from their local banks for 3% p.a. fixed for 30 years..I'd be there in a heartbeat.