US foreclosures - Boholt Seminars - NO
- Thread starter lawsjs
- Start date
Just so happens that the VP for Bank of America is the cousin of one of my colleagues in my weekly art class (yeah, crazy I know).
Anyway, my colleague emailed him recently to say that we were interested in investing and just to get his general thoughts (he knows we are moving to Canada next year)
I got a reply through my colleague today saying the following:
"It's a little early to jump into real estate in the US unless you are a cash buyer and don't mind a bit more anxiety over the next few years. While I can not answer for Canadian banks, American banks are not lending, or are lending in an extremely conservative manner. Still plenty of inventory in residential and commercial properties and still plenty of foreclosures yet to come in the housing market. So downward pressure on the residential side will continue for several years.
So if your friends have a lot of patience and staying power (cash) then they might start nosing around but they must be careful. They must know what they are doing. They must not rely on anyone that works for sales commissions etc".
Anyway, thought I would put it in the forum as it comes from the horses mouth, so to speak. At the end of the day, it seems as though there is no real rush and that prices will tumble even further. Good news for us investors!
Anyway, my colleague emailed him recently to say that we were interested in investing and just to get his general thoughts (he knows we are moving to Canada next year)
I got a reply through my colleague today saying the following:
"It's a little early to jump into real estate in the US unless you are a cash buyer and don't mind a bit more anxiety over the next few years. While I can not answer for Canadian banks, American banks are not lending, or are lending in an extremely conservative manner. Still plenty of inventory in residential and commercial properties and still plenty of foreclosures yet to come in the housing market. So downward pressure on the residential side will continue for several years.
So if your friends have a lot of patience and staying power (cash) then they might start nosing around but they must be careful. They must know what they are doing. They must not rely on anyone that works for sales commissions etc".
Anyway, thought I would put it in the forum as it comes from the horses mouth, so to speak. At the end of the day, it seems as though there is no real rush and that prices will tumble even further. Good news for us investors!
Ha, I hear you lawsjs although he's my colleagues cousin, not mine 
Yes, I don't think the banks, let alone BofA are very popular right now.
Totally understandable.
However, he did point out what many have been trying to ascertain about getting finance in the USA and how hard it seems to be.
Yes, I don't think the banks, let alone BofA are very popular right now.
Totally understandable.
However, he did point out what many have been trying to ascertain about getting finance in the USA and how hard it seems to be.
There reputation precedes them. But the truth is what are our options? Id love to go small and reputable. However when was the last time you heard of a Oz credit union with a foreign accounts devision? My guess only but me thinks the same applies to the smaller banks of the US.
There was a link i had on the small banks, that were of a higher standard/survived the GFC. It was featured on the Huffington Post when they were trying to drive ordinary americans towards more local/friendly institutions. Sort of like the slow food movement.
I see if i can find/post it up
There was a link i had on the small banks, that were of a higher standard/survived the GFC. It was featured on the Huffington Post when they were trying to drive ordinary americans towards more local/friendly institutions. Sort of like the slow food movement.
I see if i can find/post it up
bevk,
i think he might refer to the 2012 mortage reset rate, which is much more bigger then current one that causes all of this crisis, it was posted some where in the beginning of this thread.
i think he might refer to the 2012 mortage reset rate, which is much more bigger then current one that causes all of this crisis, it was posted some where in the beginning of this thread.
Go Vegas.....for what it is worth....
http://www.lvrj.com/business/nevada-ranked-no-3-for-home-price-gains-112089299.html
Website almost finished ... Times they are a passing by.....
http://www.lvrj.com/business/nevada-ranked-no-3-for-home-price-gains-112089299.html
Website almost finished ... Times they are a passing by.....
Response from an "etc":
The whole point of Vegas is to entice gamblers. Those huge lavish hotels charge very little for their rooms, because their profits are in the gambling that their customers do, not the room charge.
I just went on expedia for deals and currently you can stay at a 3 star hotel for $28 a night.
We had a family suite in that big Egyption looking monstrosity once which accommodated 4 adults and 5 children for less than the cost of a dinky single studio in San Francisco.
So who would pay $295 for a house when one of the luxury hotels would throw in butler service for that I don't know.
BofAsinine held our very first mortgage. We finally got rid of them (refinance) and then found that they bought the first mortgage of our second property. Got rid of them again(refinance) and then they took over one of our credit cards. Got rid of that, got another Cc and they bought that as well.
Can't win. We have now accepted that this truly dreadful institution will be forever in our lives.
Good luck. I will PM you on the address thing.
Amadio... I don't disagree with the holiday rental. although you can stAy in a hotel, there are few extended stay all suite hotels close to the strip in Vegas and Stateside families, when traveling, (versus the weekend trip) like having a stove and room. I am looking to do this on one of my properties very seriously ... Mainly because I don't believe in anywhere that I live not earning me income.. Especially while I am away here in Oz. However my concept is to fully deck out my property closest to the strip (800 metres walking) and VERY selectively offer it for holiday vacation when I am not there. Not at $295 a night but more like $400 a week. The big thing is wear and tear but even if count just friends of friends etc there is a market and it keeps it occupied... Plus I have my home constantly lived in. A while back I started staying in holiday rentals myself and I love being able to have a kitchen where I travel. Zoning has to be taken into consideration if charging.
If you look at this, from a marketing perspective, you probably are needing to be close to the strip.... Preferably walking distance. There are only a few enclaves of (safe area) houses that meets this criteria and I waited 8 months to find my one!
If you look at this, from a marketing perspective, you probably are needing to be close to the strip.... Preferably walking distance. There are only a few enclaves of (safe area) houses that meets this criteria and I waited 8 months to find my one!
I don't feel so left out now!! I just got spruikermail!!
Hi, im a real estate investor here in Cleveland Ohio and I was reading a
forum in Austrailia about local properties here in the United States. (bet he was - would probably never be able to sell to a local) Our
company sells properties that are cash flowing and bringing in anywhere
from $900-$1100 monthly and the price ranges go anywhere from
$20,000-$40,000.
All of the properties bring in positive cash flow and need absolutely no
work. (yeah - right! - they will after day 1 of rental)We also handle the property management for 10%. Feel free to call me
or let me know if you may in interested in taking advantage of this CASH
FLOW GOLD.
Personally I would not in a million years buy in Cleveland. I actually vaguely looked a few years ago and could only see pain and misery (would be much worse now) but I might email Mr. Investor and see what he is offering.
I did email, this is the response:
The property we are selling now is a 2 family home that needs no work. Both units are rented out at $500 each, so it is bringing in $1000 monthly. The asking price for this home is only $23,000. The properties we have cash flow better than any properties in the world. We sell a lot of our properties to out of state and out of country buyers. They normally dont last long so they are all cash deals.
It really does sound quite compelling. If you didn't know any better and could actually manage the things you would be looking at $10k a month for $200k outlay. Probably near nil capital growth and dreadful tenants, but I guess you could wear losing more than 50% of the return and still make it seem reasonable. The bottom line, regardless, is that you have to be a serious deadbeat not to be able to come up with $12-13,000 for a single home. Even at 20% interest that is $2600 per year - why are they paying rent? Because they must be serious deadbeats. If you can't get access to $13,000 the answer is inescapable.
Hi, im a real estate investor here in Cleveland Ohio and I was reading a
forum in Austrailia about local properties here in the United States. (bet he was - would probably never be able to sell to a local) Our
company sells properties that are cash flowing and bringing in anywhere
from $900-$1100 monthly and the price ranges go anywhere from
$20,000-$40,000.
All of the properties bring in positive cash flow and need absolutely no
work. (yeah - right! - they will after day 1 of rental)We also handle the property management for 10%. Feel free to call me
or let me know if you may in interested in taking advantage of this CASH
FLOW GOLD.
Personally I would not in a million years buy in Cleveland. I actually vaguely looked a few years ago and could only see pain and misery (would be much worse now) but I might email Mr. Investor and see what he is offering.
I did email, this is the response:
The property we are selling now is a 2 family home that needs no work. Both units are rented out at $500 each, so it is bringing in $1000 monthly. The asking price for this home is only $23,000. The properties we have cash flow better than any properties in the world. We sell a lot of our properties to out of state and out of country buyers. They normally dont last long so they are all cash deals.
It really does sound quite compelling. If you didn't know any better and could actually manage the things you would be looking at $10k a month for $200k outlay. Probably near nil capital growth and dreadful tenants, but I guess you could wear losing more than 50% of the return and still make it seem reasonable. The bottom line, regardless, is that you have to be a serious deadbeat not to be able to come up with $12-13,000 for a single home. Even at 20% interest that is $2600 per year - why are they paying rent? Because they must be serious deadbeats. If you can't get access to $13,000 the answer is inescapable.
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Hi Emma,
When you say you are looking to do this with one of your properties, is there something holding you back?
Even if you rented it out for half the year at the rate you propose, it's still a great income.
I agree that when it comes to something like that, it's location, location, location.
When you say you are looking to do this with one of your properties, is there something holding you back?
Even if you rented it out for half the year at the rate you propose, it's still a great income.
I agree that when it comes to something like that, it's location, location, location.
If you take a look at vrbo.com, you will discover there is money to be made in renting out a property as a vacation rental. Though I suspect the bulk of the profits are made by strip-condotel owners not home owners.
I originally intended to buy an apartment to rent out to vacationers, but decided against it because of the extra upkeep needed as well as all the other hassles that come with this sort of thing. If I lived in Las Vegas, then it would be more viable.
I originally intended to buy an apartment to rent out to vacationers, but decided against it because of the extra upkeep needed as well as all the other hassles that come with this sort of thing. If I lived in Las Vegas, then it would be more viable.
yeah the white-belt states are just a no-go zone for maintenance.
i was reading that even the bitumen paint they use on tarring the roof freezes and cracks, then when the thaw comes - presto! leaking roof. you need some COLD COLD weather to freeze bitumen to the point of it cracking. never mind the timber window frame gaps, frozen pipes etc.
why anyone would buy North of the AZ border is beyond me.
i was reading that even the bitumen paint they use on tarring the roof freezes and cracks, then when the thaw comes - presto! leaking roof. you need some COLD COLD weather to freeze bitumen to the point of it cracking. never mind the timber window frame gaps, frozen pipes etc.
why anyone would buy North of the AZ border is beyond me.
Just for kicks I asked this guy (Randy) how many they themselves owned:
We have 3 of these now. We buy them, rehab them, and get good tenants in them before we sell them. One of the benefits of us selling them to out of area buyers is that we usually do the property management on them so we continue to get monthly cash flow and our buyers always come back for more properties. We sell them so cheap because we have alot of advertising out and cherry pick for the best deals. We usually sell our properties with tenants for 30%-50% of market value. But we move volume so it makes up for the huge discount.
If these things are so fantastic then why the hell don't they own them themselves and why are they targeting investors 6,000nmls away? No idea of cold and weaponry perhaps?
Because they must be junk and they cannot sell them to anyone else....
And 30-50% of market value is what they are selling for, therefore that figure IS market value... I suspect also only for those investors who subscribe to 'Soldier of Fortune' or 'Pig Hunter Monthly'.
We have 3 of these now. We buy them, rehab them, and get good tenants in them before we sell them. One of the benefits of us selling them to out of area buyers is that we usually do the property management on them so we continue to get monthly cash flow and our buyers always come back for more properties. We sell them so cheap because we have alot of advertising out and cherry pick for the best deals. We usually sell our properties with tenants for 30%-50% of market value. But we move volume so it makes up for the huge discount.
If these things are so fantastic then why the hell don't they own them themselves and why are they targeting investors 6,000nmls away? No idea of cold and weaponry perhaps?
Because they must be junk and they cannot sell them to anyone else....
And 30-50% of market value is what they are selling for, therefore that figure IS market value... I suspect also only for those investors who subscribe to 'Soldier of Fortune' or 'Pig Hunter Monthly'.
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Bev, I agree with Costa, you need to be there... Really for the short term rental market you would be eating up your profit very rapidly with management fees and increased maintenance. Also , Beverly (name of street my property is on) is the only one viably close enough to the strip for marketability. The rest are well and truly suburbia. A Sydney analogy would be renting a house in Hornsby to someone who wants to come and see the Opera House.... There are a million apartment vacancies that are trying to convert to short term rentals because they can't get long term tenants.. So the condo market isn't a good way to go either.
Oh, the only thing holding me back is that at the moment Bev doesn't have electricity or hot water.... Or a kitchen... But other than that, she is perfectly ready to go! I do sleep there when in Vegas but it is a blow up mattress and I have yet to find the market that has money that likes that style of accommodation (especially when it is winter). Beverly is the one I bought at probate - a burnt out property I am rehabbing but she had to be taken completely back to studs... So will get there but just not quite there yet. Definitely a labor of love though....
I asked the spruiker before, these same questions. Sure enough...wasnt so eager for me to be a customer anymore! ha. Emailed twice from diff accounts to make sure he recieved them...Hate it when i get the "sorry my emails been playing up" line...Yea sure buddy. Whatever you say...
AFR "US bargains may come at a price" & Superfunds
An article in last weekends Australian Financial Review by John Wasiliev "US bargains may come at price". I'd love to provide a full link but to view this online you have be an AFR member/subscriber or sign up for a free 14 day trial.
http://www.afr.com.au/p/markets/market_wrap/us_bargains_may_come_at_price_TM95XXR5fmEs5oU1tuyRGP
My main interest here is investing using a SMSF and JW raises some points:
1. From a USA tax point of vie, Australian investment vehicles such as SMSF are not recognized. So if the investment was owned by a USA LLC then that company will generally have to pay tax on profits like rental income
(We have houses in NZ and had devils problems initially registering these in the name of our superfund. Pretty sure they are still just in the name of trustees. ATO does recognize tax paid in NZ. We make a full NZ IRD return each year as well)
Price Waterhouse partner Mike Forsdick goes on to day US is not the same as Aussie where we pay a flat 30% rate with entitlements to dividend franking credits. It's a graduated scale which means it could be > 30%
"This could be a nuisance because whereas the company will have to file a US
tax return, the super fund which owns the shares (in the LLC?) would not get a credit for this tax he says
> I thought we had the same arrangement with the USA as NZ. IE you don't get double taxed
He goes onto say "even if the superfund held the investment directly (like we do with our NZ properties) there could still be a problem because whoever owns the property will generally have to file a US tax return
> I would have thought this was a given
He then says "as Australian concessional super tax system is not recognized in America it will be the fund member who will lodge the the return. They will have to pay USA taxes and given they are paying the tax, the super fund probably won't get a credit for this, even though it is effectively receiving the rental income from an australian point of view and will face having to pay tax on it"
Another tax complication can arise because the owner of the property is non resident of the USA. This can raise the prospect of a withholding tax on the rental income.
IN CONCLUSION
I'm not sure if Forsdick or Wasilev are right up to speed with this. There's more in the article but only so much I can type.
Closing paragraph in the article are "so while American property mya look to be a good investment bases on the prices.... it is important to be aware of the after tax income. Even if the Aussie SMSF is in pension phase (ours partially is) and not paying any tax, it could still face American taxes. The bottom line is a number of possible traps to think about.
Any comments or first hand experience here. I do have a lot of notes from Boholts Melbourne meetings in Nov.
I think they're be ways around this and my thoughts are:
a) You're going to have pay USA tax and lodge a tax return there
Some posters here may have experience and be able to fill us in. Or it might take a call to the ATO to discuss how they treat American investments and if the superfund name cannot be referenced in the USA would registration or a paper trail in the name of the trustees do the job?
AUSTRALIAN TAX TREATIES
Here's a link to a list of them..
http://www.treasury.gov.au/contentitem.asp?NavId=052&ContentID=625
Australia and the United States treaty - key points
http://www.ato.gov.au/businesses/content.asp?doc=/content/55549.htm
My experience with NZ is that yes the returns are a bit of a PIA (and strictly speaking are due in Mar each year, not Jun like here). But like most things it's only the first one that complicated. I'm sure there is an economy of scale here... 2 USA IPs would be not much more work than one. It's getting the foundations right that counts.
My normal day to day business is about 25% with the USA, so have a lot of contacts but only in certain states. So getting purchases consolidated and sent out, mail scanned & emailed, etc is not a big issue. When making payments most of the Americans (almost without exception) post me a cheque. I thought it was just to have use of their money for extra few weeks. But as this thread highlights certain cultures in the USA are pre internet and like 1975. How many Aussies even have a cheque book these days?
An article in last weekends Australian Financial Review by John Wasiliev "US bargains may come at price". I'd love to provide a full link but to view this online you have be an AFR member/subscriber or sign up for a free 14 day trial.
http://www.afr.com.au/p/markets/market_wrap/us_bargains_may_come_at_price_TM95XXR5fmEs5oU1tuyRGP
My main interest here is investing using a SMSF and JW raises some points:
1. From a USA tax point of vie, Australian investment vehicles such as SMSF are not recognized. So if the investment was owned by a USA LLC then that company will generally have to pay tax on profits like rental income
(We have houses in NZ and had devils problems initially registering these in the name of our superfund. Pretty sure they are still just in the name of trustees. ATO does recognize tax paid in NZ. We make a full NZ IRD return each year as well)
Price Waterhouse partner Mike Forsdick goes on to day US is not the same as Aussie where we pay a flat 30% rate with entitlements to dividend franking credits. It's a graduated scale which means it could be > 30%
"This could be a nuisance because whereas the company will have to file a US
tax return, the super fund which owns the shares (in the LLC?) would not get a credit for this tax he says
> I thought we had the same arrangement with the USA as NZ. IE you don't get double taxed
He goes onto say "even if the superfund held the investment directly (like we do with our NZ properties) there could still be a problem because whoever owns the property will generally have to file a US tax return
> I would have thought this was a given
He then says "as Australian concessional super tax system is not recognized in America it will be the fund member who will lodge the the return. They will have to pay USA taxes and given they are paying the tax, the super fund probably won't get a credit for this, even though it is effectively receiving the rental income from an australian point of view and will face having to pay tax on it"
Another tax complication can arise because the owner of the property is non resident of the USA. This can raise the prospect of a withholding tax on the rental income.
IN CONCLUSION
I'm not sure if Forsdick or Wasilev are right up to speed with this. There's more in the article but only so much I can type.
Closing paragraph in the article are "so while American property mya look to be a good investment bases on the prices.... it is important to be aware of the after tax income. Even if the Aussie SMSF is in pension phase (ours partially is) and not paying any tax, it could still face American taxes. The bottom line is a number of possible traps to think about.
Any comments or first hand experience here. I do have a lot of notes from Boholts Melbourne meetings in Nov.
I think they're be ways around this and my thoughts are:
a) You're going to have pay USA tax and lodge a tax return there
Some posters here may have experience and be able to fill us in. Or it might take a call to the ATO to discuss how they treat American investments and if the superfund name cannot be referenced in the USA would registration or a paper trail in the name of the trustees do the job?
AUSTRALIAN TAX TREATIES
Here's a link to a list of them..
http://www.treasury.gov.au/contentitem.asp?NavId=052&ContentID=625
Australia and the United States treaty - key points
http://www.ato.gov.au/businesses/content.asp?doc=/content/55549.htm
My experience with NZ is that yes the returns are a bit of a PIA (and strictly speaking are due in Mar each year, not Jun like here). But like most things it's only the first one that complicated. I'm sure there is an economy of scale here... 2 USA IPs would be not much more work than one. It's getting the foundations right that counts.
My normal day to day business is about 25% with the USA, so have a lot of contacts but only in certain states. So getting purchases consolidated and sent out, mail scanned & emailed, etc is not a big issue. When making payments most of the Americans (almost without exception) post me a cheque. I thought it was just to have use of their money for extra few weeks. But as this thread highlights certain cultures in the USA are pre internet and like 1975. How many Aussies even have a cheque book these days?
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