US foreclosures - Boholt Seminars - NO

[Emma171]

Minimum starting point to being able to buy

Wow, thanks everyone.. Yes of course I would love to make $$ so bring on the ideas course just don't have me giving up my love to actually DO this or change as opportunities come up... Happy to talk to people though and I will try to absorb.. I thought that all this was pretty useless information to be quite honest because this is a fairly narrow field of niche expertise... Or not... Ha, Jeremy may be right on the pessimism!

CRITICAL INFORMATION BEFORE EVEN LOOKING TO BUY

In the interim though this is critical info.... The bare minimum if you want to start to be ready to buy...

1) PROOF OF FUNDS....Decide under what name the property will be placed and have a bank account set up to match that name. For brevity I won't reiterate the thoughts on what structure that may be....ie LLC's versus Trusts or individual names... Just make sure that if you want the title on the property deed to read "Joe Smith, LLC" your bank account that shows sufficient funds (proof of funds) in it to buy the property, must match this name "Joe Smith, LLC"... ie proof of funds must equal the name on the deed. It is easiest to use someone like Bank of America or an international bank with branches in the States especially when you read the below but I have used St George... Proof of funds don't have to be in a US account but by gosh the Earnest Money Deposit does have to come from a US bank.. See next point...

2) EARNEST MONEY DEPOSIT CHECK.....you MUST have already drawn up USD5000 cashier's check FROM A US BANK made payable to "Title Company" sitting with your real estate agent. In the memo field, put in the same name that will be on title.... "Joe Smith, LLC". Your agent will use this same check for multiple offers and it will be okay for that .....but ....and big but.....be very prepared for the moment when an offer is accepted the title company, within 24hours, will turn around and request a NEW Cashiers check to be presented with the specific title company's name on it and maybe referencing the actual property address.... So have another 5k at hand in USD able to be drawn up in a hurry.... They do sometimes accept a wire transfer at this point but can just be horrible and you are better to be prepared! You will get the first check back if it isn't acceptable. Remember your Earnest Money Deposit (EMD) goes towards the purchase of the property and is held in good faith by the Title company handling the sale....think Australian solicitors...

3) Give proof of funds and earnest money deposit check to your agent as soon as yiu start looking for properties. You never know when you will see one you want to offer on, BE PREPARED. Update your proof of funds with your estate agent every 30 days. This need only be a screen print of the online statement but again, it MUST match whatever you are wanting the title on the property to read. Ditto with the Earnest money check.. But every 45 days will suffice for that.

4) this is an alien world for most GET A BLANK COPY OF A PURCHASE AGREEMENT... And read it... For a cash foreclosed property off to stand a chance with the banks, you are waiving your rights to inspections, to searches etc... You need to know what you are signing and not wait until you want to put an offer in...ask now, not when hours matter



5) CONGRATULATIONS... Now, and only now can you start to think about being prepared to buy... Lol...

Next will be what you need to know about MLS listing pages..... Or some other random 2am thoughts...

oh btw. Real estate agents can't by law recommend property managers or workers... I can though ... Caveat being that each person should do their own diligence and never take anyone's word for gospel without doing some sort of checks!

I will look to see if anyone had other specific questions and try to get them answered.....

As a huge aside, yes, thanks again for all the wonderful words! Yes, everyone should have their own game plan and I suppose I just want to say that whether someone follows bits of what i have done or at least takes from this enough to realize that it isn't too difficult just different, then yay! I only had naysayers and people thinking I was insane when I first started in Vegas and I had moved to a state where I knew vaguely of a relative of a friend and that was it. i then walked into my first house and just rolled up my sleeves. I agree this isn't for everyone ... Thank Heavens! But for those out there willing, this is just a how to think a little beyond "is it possible" to the "what would I actually need to do"? You can hopefully make a much betteer informed decision that suits YOU.. Not some program...or the "Emma Way".. No one should have to do this the hard way....or the secretively expensive way. Trust your gut.

 

[Emma171]

Probably a bit soon for most but I am definitely in Vegas at least the first week of December leaving Sydney probably about the 28th ish of November but back in Oz for Christmas then back in Vegas after school holidays whenever that may be. Always travel off peak! I will be there on and off for the next 4 years as not only is that where I officially live when not in Alaska, it is also my commitment to my properties.

Yes, there are many great places for the quiet or not so quiet beverage in Vegas!

 

[Emma171]

Okay I am an insomniac but a big issue will be WHERE to look in Vegas for properties. The first question I asked and the only big question an agent can't direct you at all on without risking their license. You need to identify some areas to your agent to put you on the automatic email list of properties... You will then get daily emails of the properties that meet your search criteria. I will write more on this but I work by zip codes in Vegas and have driven them all... The biggest rule in Vegas is that every zip, even the worst ones can have great enclaves of good properties... Go half a mile in any direction and you could go from ghetto to fantastic. Thus the usual caveat required.

As mentioned, I will go on about this later but price will probably guide you more than zips. How much are you willing to spend and are you willing to take on in terms of repairs ? Start with a broad request and narrow it by research. Just don't ask your agent to suggest places.... Cities get a bit ticked off and litigious on matters like that!

I can say that in Vegas you rarely get a variation in the perceived "great"neighborhoods of Henderson and Summerlin (South and South West Vegas) because they have only been in existence about 15 years...so you aren't going to get the older run down cheaper property there..... So those zip codes will be an entry point of at least 80 - 90k and that could be a pretty torn up place. Not my market as I want higher yield but great capital gains to be had if you wish to hold...plus when I talk about not great yield, they would still beat any Australian property!

Okay, too early... Will write later.

 

[Emma171]

Foreign exchange... I use xe.com... close to spot... Awesome
my crystal ball doesn't see the AUD getting much higher than $1.05 (number of reasons but this is just my crystal ball) I have always said I will never buy at the absolute bottom or sell at the absolute top but if I am somewhere close and happy I used the best variables in front of me at the time, I don't look backwards.

Landlord's insurance is what I use... As I say to my agent... I want to be covered if someone has a paper cut on my property and I am at 2million for liability. See earlier thread on this regarding piercing the corporate veil. I wish to refinance down the line so no longer using llc's in Vegas... Again earlier thread covers that.

Taxes.. Another good thing from earlier post.. No state income tax to deal with in Nevada. Your accountant can direct you but once dealing with just federal tax life is a lot simpler. Don't forget to itemize. Sales tax is 8.1% and you get to claim it back even on your hamburgers!

 

[CostaInVegas]

Hi guys, have to say this thread is a great read and I'm happy that I stumbled upon it at the very last minute!!!

I get to LV on 14-November and head back home on 5-Dec. I'm currently in LA, though live/reside in Melbourne.

This is my 5th overall visit to LV, and 2nd visit with the intention of buying a house. I was there earlier this year but wasn't prepared, lacked knowledge, and didn't find the right realtors.

Just want to reiterate what most of the posters are saying here, that Emma171's advice is invaluable. I have learned a lot and have so much more to learn. So thank you for taking the time to share your knowledge, Emma171.

Hoping to contribute my buying experience on this forum, and get as much help as I can along the way!

 

[reeco]

Did you know Emma that when the words foreclosure & boholt are typed into Google that this thread pops up on the first page? Jeeperz she made a huge mistake when she ousted you. There's a bit of a backlash going on mr Mcknights forum as well.

My goodness she made a big mistake. There's no doubt she knows this thread exists...everything on the net is written in ink. Not pencil. It cannot be erased. Even so I'm sure she will find enough suckers to continue on.

 

[MelbMan]

If it's any help with tax deductibility for a first USA property purchase, the ATO won't allow these costs but according to DB if you have a LLC setup and a family trust or like set up here in Aussie, the US tax people will allow deductions for your first search pre purchase. Can see Emma is suggesting LLCs will or may cause some problem down the track if you want to re-finance.

Also according to DB LV is at the top of the list of USA foreclosures with 1 property in 69 being foreclosed.

I wonder if this is owners walking away from non recourse loans and buying in or renting around the corner at a lower entry price? No doubt Americans seem to have a different take on property to Aussies. But being able to hand the bank your keys without any further action might explain the difference?

John

 

[DEC]

I wonder if this is owners walking away from non recourse loans and buying in or renting around the corner at a lower entry price? No doubt Americans seem to have a different take on property to Aussies. But being able to hand the bank your keys without any further action might explain the difference?

John

A non recourse loan is a loan that is protected by collateral. In the case of a mortgage, the non recourse loan is protected by the home, and in a non recourse loan state, the borrowers are not held liable for any amount greater than the value of the home at the time of repayment. The following states are non recourse loan states: Alaska, Arizona, California, Connecticut, Florida, Idaho, Minnesota, North Carolina, North Dakota, Texas, Utah, and Washington.
http://www.loan.com/home-loans/how-non-recourse-loan-laws-vary-from-state-to-state.html

 

[MelbMan]

Thanks Dec. That rules out that theory for Nevada. Appreciate the states list.

Can see Nevada still has the highest unemployment rate in the US
http://www.nevadaappeal.com/article/20100922/NEWS/100929958

Having said this LV might be a wonderful place to be unemployed if that luck besets you & everyone needs to live somewhere.

http://www.lasvegassun.com/news/2010/jul/14/foreclosure-rate-eases-nevada-still-ranks-no-1/

"Nevada has been hit extremely hard as the recession has spread throughout the economy...Clearly, with its historical reliance on gaming and construction as engines of growth, Nevada has been at the epicenter of the current economic downturn, as these two sectors have each felt the brunt of negative economic forces,"

http://politifact.com/truth-o-meter...n-angle-blames-harry-reid-nevada-economic-wo/

 

[sydney_horn]

I'd like to add my public thanks to Emma and Jeremy for their invaluable advice on this board. I’d also like to thank many of the others that have contributed to this discussion. It has been an education for me!

I’m very new to this but have also become very keen on exploring this opportunity.

Unfortunately, as a newbie, I’m an info taker rather than a giver at the moment but I can recommend this site that I’ve found useful:-

http://www.lvmpd.com/crimeviewcommunity/wizard.asp

I’ve found the best way to use it is to select the “within boundary” tab on the “Where” tab. In here you can search on zips or police areas.

I then find it easier to look at the “report” on the results page.

TBH the figure in some zips do look pretty alarming at first glance but there are many suburbs on the fringes that have plenty of cheaper properties and low crime figures.

I guess, as Emma has said, the trick is to find properties in good streets even if the zip or area may have some social problems!

 

[lawsjs]

everyone was new once - no shame in that!

My first impressions of the US market was that it is so compressed. Lets say there is a 'bad' suburb in Australia. Generally the suburbs around it are less savoury. In the State's you can have good and bad parts on the same street..

And of course the market is huge. LA County (not the whole area just the county) is the population of the whole of Australia. LV is from memory something similar to Sydney, so its not like you are buying in hick country towns..

 

[Making The Jump]

Reeco, you have a good point, to a point and you are right. I am not sure if I am trying to dispel the myths of the difficulties or just be brutally honest as to the practicalities. I only know that if gonzo is right, you do not ever, nor should you, pay $7k to buy a system that doesnt guarantee a property when that is about 3k over what it would take to spend a month in any random city setting up your own entire network, airfares included and buy your own blasted property.

I have done a little bit of research on Dymphna and it seems she doesn't really tell you how to buy a US property.

Anyway I'm not sure if this has been mentioned before but there are companies that will do all the legwork for you to buy a house in the US and they charge about three grand. My agent from the company that is converting my AU to US said My USA Properties has been really popular with many of his customers. I requested and received a brochure from them but decided to go it alone but then again I had the fortune of being able to visit the area I am buying into and have made contacts there. If you need a bit of hand holding a company like My USA Properties might be the way to go. There are quite a few companies that have started this model up so take your pick. I only mentioned the My USA one because the agent told me it had been popular with his clients.

 

[Making The Jump]

That will teach me for not reading the rest of the post... I see the one I posted above is already redundant. Oops!

Everyone on here seems to be taking an interest in Vegas but the one issue that I'm surprised has not been brought up yet is the Kitec plumbing in newer houses there. If you buy a house that is anywhere from mid 1990s to mid-2000s it is something you should suss out before you close on the property. If it does have Kitec you can negotiate with the bank to buy the house at a reduced price (about $5,000) but make sure you get it replaced before you put in tenants or it could cost you big down the track. And if a place does have Kitec be sure to check for water damage.

 

[MelbMan]

Kitec problems...

Here we go Make The Jump re Kitec..

http://video.google.com/videoplay?docid=7521371216962997646#

http://en.wikipedia.org/wiki/Kitec

 

[Aaron Sice]

Philmark - double tax treaties. You effectively get the 'worst' of both worlds, but you do not pay tax twice. You get a credit for what you pay in the US against your AU tax - its recently changed so _if_ we make a loss as Aussies we can claim the loss. Its like the ATO saying 'go out and buy US property and we will give you a helping hand that US locals don't get.' US citizens cant claim losses on investment property. I am guessing it was the AU govt that gave this as a burnt offering to try to help put a floor under the US housing market. If that is the case, then it is our patriotic duty to go forth and buy....

now, don't go too far.

remember that you can QUARANTINE income with the FTA between us now.

you only pay tax ONCE if you quarantine the income in the USA - HOWEVER - you cannot use that income to prove serviceability here. once it is quarantined it is out of 'our' system - much the same way that not declaring income on your tax return means the banks won't look at it.

i believe the tax is a flat 15-ish %.

beats paying upwards of 37%.

how do you get the money to australia? dunno....

 

[Aaron Sice]

and FTR, i'd love to help Emma set up a webinar or the like. people want to hear about the intricacies, not just how easy it is - because clearly, it's not.

i don't think calling Dymphna's clients 'suckers' is terribly good for anyone. They're not suckers and Dymphna is not acting immorally by selling her information. Just because we have two people on here who have done the hard yards and are willing to discuss it for free with gay abandon (and seriously - thanks guys ) it doesn't denigrate what Dymphna is doing one bit.

I give information away for free that Carly Crutchfield charges for, i wouldn't call her clients 'suckers' or think that CC is doing anything wrong.

you pay for their time to sit down with you and help you. or you could just fly to the US and sort it out yourself, or buy a dvvy site and work it out yourself.

we're just lucky we have two peope here who have done the hard yards.

i sincerely feel very lucky to have experienced everything i have in this thread. thanks Emma171 and lawsys - i owe you a big debt of gratitude.

 

[Chui]

you only pay tax ONCE if you quarantine the income in the USA - HOWEVER - you cannot use that income to prove serviceability here. once it is quarantined it is out of 'our' system - much the same way that not declaring income on your tax return means the banks won't look at it.

A search on Google for "Quarantine Income" Free Trade Agreement USA Australia turns out little. Can you provide some links?

 

[MelbMan]

Section 8 tenants

Not sure if anyone here wants a Section 8 tenant in the USA.... here's a bit of general info...

http://en.wikipedia.org/wiki/Section_8_(housing)

I had a tenant on welfare in NZ renting one of our houses there. She's one of the few to skip paying the rent. Every week WNZ (Welfare NZ) used to deduct the rent from her welfare payment and send it to my PM.

Emma makes a good point earlier on about maybe setting your rent a few dollars under the going market rates. In NZ we've found older tenants to be a much better bet that young ones who are more footloose and fancy free. I guess a family with some children and more possessions may even be less likely to leave.

 

[Making The Jump]

That's my whoops again. Sorry, Melb Man, I didn't recall anyone talking about Kitec in previous posts. Just so long as everyone knows!

Re: Section 8s, if you buy in a good area you shouldn't have to rely on section 8s. Also, there is a certain building code standard above the normal ones for section 8s that the government applies and I've read it can cost a few thousand to bring them up to the required standard. There's plenty of horror stories on section 8s out there but also plenty of positive ones. Although with my track record today, this has probably already been mentioned

 

[Aaron Sice]

FROM WIKI >

In addition, landlords, though required to meet fair housing laws, are not required to participate in the Section 8 program. As a result, some landlords will not accept a Section 8 tenant. This can be attributed to such factors as:

* not wanting the government involved in their business, such as having a full inspection of their premises by government workers for HUD's Housing Quality Standards (HQS) and the possible remediations required[15]
* fear that a Section 8 tenant or their children will not properly maintain the premises
* a desire to charge a rent for the unit above FMR
* unwillingness to initiate judicial action for eviction of a tenant (HUD requires that Section 8 tenants can only be evicted by judicial action, even where state law allows other procedures)
* racial profiling (a large percentage of Section 8 tenants are minorities)
* a desire to not inflict the social pathologies associated with section 8 tenants, such as crime, vandalism, drug use, drug dealing and littering on the surrounding community[citation needed]

Depending on state laws, refusing to rent to a tenant solely for the reason that they have Section 8 may be illegal[citation needed]. Landlords can use only general means of disqualifying a tenant (credit, criminal history, past evictions, etc.).

However, other landlords willingly accept Section 8 tenants, due to:

* a large available pool of potential renters (the waiting list for new Section 8 tenants is usually very long, see below)
* generally prompt regular payments from the PHA for its share of the rent
* a perceived higher quality of tenants, since tenants can be permanently removed from the Section 8 program if they damage the rental unit or fail to pay their share of the rent

Whether voucher or project-based, all subsidized units must meet HQS, thus ensuring that the family has a healthy and safe place to live. This improvement in the landlord's private property is an important by-product of this program, both for the individual families and for the larger goal of community development.

In many localities, the PHA waiting lists for Section 8 vouchers may be thousands of families long, waits of three to five years to access vouchers is common, and many lists are closed to new applicants.

that's pretty decent incentive to pay the rent on time.