US foreclosures - Boholt Seminars - NO

Why aren't US residents buying

Yes, some are buying Sunfish. They are called Vulture funds, and they are buying everything from properties to mortgage notes.

The contrarian in me tells me to stop buying when everybody else does.

The two biggest risk as I understand it are:

1. Vacancy which leads to
- crime - people stripping gear from a building, leading to
- dereliction
- and general expenses - high (fixed) property taxes,
- winter maintenance - blow the water pipes so they don't crack

2. Absence of professional property managers.

Incidentally, no one should rush into this. It will get worse before it gets any better.

This chart is instructive:

las-vegas-option-arms1.png
 
The thing that worries me about buying in the states is that most of the municipalities and counties are virtually bankrupt. One of the ways they have of increasing revenue is to up property taxes. We have seen this happen in the UK and to a lesser extent here in Oz.
 
Bankruptcy

From what I've read, the munis want to go bankrupt and default on their debt, as this also gets them out of the public pensions mess, but the unions are trying to stop that. I'd rather see the taxes rise than munis going bankrupt.

What I'm more concerned about is excessive inventory. Australia has very restrictive land release regime, and any investors putting money outside of Australia needs to appreciate this fact.

The other thing to be concerned about is currency risk.
 
:D
vote 1 for Emma171 as Prime Minister.

haha...second that!...wouldn't be the first time Australia was run by someone based in the US!!

:D

BTW, good info Emma, keep up the good work. Although, I haven't got the balls to do this myself, it is quite refreshing to read about someone out there doing it...

Boods
 
an LLC is basically a discretionary trust.

i say "basically" very loosely though, because each memeber needs to prove who they are under a W8BEN form, from memory, and have a US bank account which you can't set up over the phone. you gotta walk in with your ID number and prove who you are, can get the ID number from the embassy.

the biggest issue is proving you're a legit person in the US system, once that's solved you're pretty much away.
 
That is why I would only go there if I could borrow in US$. No way would I take good A$ to spend there.

What are these LLCs that allow foreigners to borrow there?

It's a safe bet the US note will return to it's rightful range of 10-20% above the ozzy dollar. Short term it's a gamble. Long term it's a winner surely
 
Best hedge is ponzi dollars

That is why I would only go there if I could borrow in US$. No way would I take good A$ to spend there...............

This would be the ultimate hedge. Borrow their ponzi currency to protect your position here. ;)

Perhaps use some Aus equity for as low as a deposit as possible and borrow the rest from Uncle Sam

My understanding however, is that as a foreign alien it is getting harder to access their funds and as the complexity of ownership entity escalates (LLC and C-corps, etc), then the said foreign alien's hopes of accessing ponzi dollars diminishes exponentially.

Happy to be corrected if my info is misleading.

Emma, your posts have been very insightful and candid. Thank you for sharing your experiences. :)
 
Borrowing

From what I have read, loans to foreigners can't be offloaded to Fannie Mae. Therefore, banks are reticent to lend. Depending on who talked to you, some say you can borrow 30%, but they only deal with properties over 100k. Maybe someone can parcel a few properties up and borrow 100k? The other option is to have someone trusted in the States to help out. I'm investigating that route.
 
Try this link:
http://www.somersoft.com/forums/search.php?searchid=3673846
and you will see that I [AKA Thommo] was predicting pretty accurately six years ago.

On what basis do you say we will fall again?

Just the law of averages really. We won't fall. But America will recover. In the short term with all these forecasted interest rate rises here and the scheduled ARM loans in the US, it's a good bet we will hit above parity. But 4years from now I'm sure the US will come back much stronger...hopefully smarter. There currency will reflect that. As long as the tea party don't have control then things should be ok by 2014
 
Ha .. Right a few thoughts and yes, My brother does have a good sense of humour but thanks to those for leaping to my Tolstoyesque defense... !

1) locals are buying if they have cash..and big style. Many on bulk from the banks or on the auction steps in investment groups. You will see many of these come up as flips... Caveat emptier. They will literally make 5-10k on an overnight flip...sometimes doing nothing to the property. These are not foreclosures but I. Bad cases misrepresented as. Then others are those who walked away from there 200+k mortgages, in the 2 years it took to evict them, they bought a house in the wife's name for 50k down the road... Funny but not helping the housing crisis and a big occurrence in Vegas leading to mass misrepresentation of the true foreclosure rate at least in that city... My non statistically significant observation would be about 1 in 8 following this trend.... It is crazy.
2) I bought SFR's because the only thing I could see was the inevitable glut in housing and people ultimately would want to live in a house versus an apartment for the same rent. The multiple family props that I could afford would be the first to be vacated and if the worst occurred, become ghettos. Some may well end up bulldozed. That simple. I can't wear 20% vacancy and am not wanting to take the NRA's stance on the second amendment either. Plus vacant properties astonishingly lose things like copper pipes, a/c units etc. I have the luxury of undercutting apartments in rent, guaranteeing full occupancy and yes, absolutely and sadly causing, in part, a non productive downward cycle in rental returns (although interestingly Vegas has maintained high rents due to a number of reasons). Thus 3br/2ba.... If doomsday occurs, I will in my worst case scenario get 10% yield and still have 100% occupancy.
3) my brother has fought the hard battle on tax file numbers and SSN's and covered that.
4) if you are wanting to buy foreclosed properties with leveraged funds, figure it out from Australia. ELOC's on existing Australian properties have worked for some as unsecured funds. They tend to allow about 50k... Just best not to say what for...

Oh just remembered.. I looked quite a bit at Denver for friends.. I wouldn't do it because of the snow issue. Maybe for a long capital growth play but I didn't see any major yield returns. I don't buy for pretty cities... Mine is simply a 5 year play and then out ...to pay off today's debts with tomorrow's $$... Again hopefully not worth rupees by then.

Property management... I have a great network of people thank god and would strongly say that purchase is not going to be anyone's major issue... Managing while you wait for capital appreciation was always my major concern. Good tenants mean only going in once a year if they turnover but things happen and you need to figure out that side without slaughtering your yield. I lived Vegas whist doing the properties and worked that out so whatever market you are in, ask people you trust... Real estate agent is a great start... They won't recommend bad people if they think you are still buying...!

Now back to the Cup.... No posts tomorrow ;)
 
Mine is simply a 5 year play and then out ...to pay off today's debts with tomorrow's $$... Again hopefully not worth rupees by then.
So you are having a currency play. That's OK I don't blame you but I come back to the point I've made a couple of times: There IS no currency play if you buy with A$s. You must use local cash to make that home run.
 
Emma,

Wow, how did people get into these?

http://www.zillow.com/homedetails/6...825_zpid/#image=imgId=X1-IAr0ftpfa6ym4x_im156

10/16/2010 Listed for sale * $95,000
09/17/2010 Sold $52,500

Chui

08/06/2010 Listing removed * $95,000 -- $53 Realty ONE Group, Inc.
04/16/2010 Listed for sale * $95,000 16.9% $53 Realty ONE Group, Inc.

Probably because he's had it for sale since April and he was desperate? It also doesn't specify financing method either. Perhaps went down as 52k sale then the rest as vendor finance? Just a guess off the top of my head, but we have no idea what the offer comprised.
 
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