US foreclosures - Boholt Seminars - NO

[Emma171]

By the way, would love to take credit for Costa but his tag is after all "Costainvegas".

That being said, great to know that there are a few people to share stories with in this neck of the woods and I will only be charging a nominal amount for tours of my beautiful Beverly (the burnt baby that has yet to achieve electricity but does have a very interesting moat being dug)

 

[ChrisColumbus]

LA Agent

My LA agent has a simple mantra. He would rather have 10 clients and sell them each 20 buildings than 500 clients only buying 1.
That is someone you want to deal with. Again and again and again. As I have.

Lawsjs would really like to meet your LA agent, I am flying in to LA in early April its my third trip within 9 months doing research & am ready to buy. Currently manage $100's of millions worth of property on the Gold Coast and own my fair share & frankly had enough of the returns here. Its common to hear new clients say "get me 4% & I will be happy" Dont get me started on stamps & land tax missed out by 1 day on a play and it cost me 15k in land tax. Are you in LA often?

As a agent and property investor US seems to offer low risk with huge upside potential if you dodge the sharks and two tier marketiers. Gold Coast was also once plagued by two tier marketing people seem to forget that.

emma keep up the good work!

 

[karina]

Posting from LAS VEGAS!!!!

My first trip to Vegas and all I can say is that the city is amazing at night.

Went out with Emma this morning and looked at some properties. I can see why she has picked the areas she has recommended on this forum. I am yet to see one boarded house, and there is not a lot available for sale in the price range , areas I am looking at. Actually its quite frustrating that there are very few houses for me to see in my target market.

Saw Con's properties, Con I must say Sutcliffe is absolutly spectacular. I am so jelous , I absolutly loved it, street is very nice and the new tiles in the kitchen look great. The tradesman have also done a really good job of the external rendering and removal of the ledge, installation of the window. Baffy I could only see from the outside as tenants are there already. Also a lovely street and the house is very nice from the outside.

Emma has been great giving us the tour of the pockets she recommends and I must say I would not hesitate to buy in the areas I have seen so far.

Also saw a cheapie that one of the other aussies have an offer on, again if it was available I would snap that up also at the low low price its on for. Not one of Emma's desired areas but the price makes up for that without question. The numbers are low 40k's, rental 800 - 850 a week and a really nice looking property from the outside. Couldn't get in but had a look through the window and needs next to no work done on it)

Met 4 others aussies yesterday all house hunting and Yolanda who I was impressed with also.

Look foward to posting my updates on the forum..

and a HUGE HUGE HUGE thankyou to Emma for all her help. I am feeling really comfortable with investing here thanks to her wonderful support throughout all of this

 

[Aaron Sice]

how's that for a glowing recommendation?

i'm very impressed with not only the content of this thread, but this thread is SO complete there are already - not 1, 2 but 3 - forumites over in the USA buying up with Emma's help.

well done.

 

[boods99]

Posting from LAS VEGAS!!!!



The numbers are low 40k's, rental 800 - 850 a week

Surely this is a typo??!!

Boods

 

[reeco]

Surely this is a typo??!!

Boods

Certainly. Because were so used to saying rental in weekly amounts, when i saw it advertised I also mistakenly said weekly to friends aswell. With resi, Americans quote almost exclusively in a monthly manner.

 

[karina]

oops sorry I did mean 800 - 850 a month.

 

[bevk]

Hi Karina,

well done for getting to Vegas and jumping in!

When you say there is nothing available for you in your price range, is that because the prices have risen, or because Emma has bought them all?

 

[PropertInvestor]

There is plenty to come and sufficient for all SSers if you agree with RealtyTrac data.

http://www.dailybreeze.com/business/ci_17158322

"properties still have to go through the foreclosure process, which means 2011 could be a record-high year for foreclosures, according to RealtyTrac Senior Vice President Rick Sharga."

"Foreclosures might not drop to more normal levels until 2014 - or later. Blomquist said he thinks that, in baseball terms, the U.S. housing market is in about the 7 th inning, or past the middle but with quite a bit left to run. He's not alone. National housing economists agree that the next few years will be tough for the housing industry, with potentially another 4 million to 12 million foreclosures that haven't yet gone through the pipeline."

 

[Emma171]

I think the biggest thing is that if you want to buy just any foreclosure, there are a ton out there. I don't prescribe to that mantra. 20 properties came out today and I was interested in seeing 1 of them only. That comes with knowing a market I suppose. I personally tend to want to get "good/great" versus "any". That is probably the danger. Mobile homes here foreclose and are listed at 70k.... No one should go near them with a barge pole!

They will come up, those tasty yummy morsels that make me just leap around and then there ones that will be solid, not stellar but still worth it. Currently In Vegas in my niche the stellar are once or twice a week and the good about 7 times a week. I am ecstatic if we get those. If you go higher in price, obviously those numbers increase.

Like most I am only interested if I know that for that area it will rent well, it will be popular and it is ultimately looking at a very good cap app. Again, massive exceptions to the rules and anything can leap into stellar for the right price.

 

[lawsjs]

In nearly 25 years of buying real estate I have bought one bargain.

I have bought many really good buys. Some of those (one striking example) was by paying what everyone thought was a stupid price. I have been openly laughed at, but a couple of years later 'we should have all done what you did.' You will NEVER own anything if you will never pay more than anyone else. By definition the owner of any property must have paid more than anyone else was willing to.

I know a lot of people who never buy anything because they are waiting for the 'perfect' buy.

I guess its easy for me because I know Emma won't ill advise anyone, but she has spent years researching this particular area and nearly two decades researching and living the US. If she recommends something it would already be an unheard of buy for an inexperienced foreigner to get their hands on, probably the top 1% of thousands of deals available at any one time.

To my mind paying $70k or $90k for a property that cost $300k to build a couple of years ago is really irrelevant. Buy 3 and get an average of $80k. Solves the problem. In the long run, it makes bugger all difference really. If the numbers work - go for it.

If a property costs you $1 a year to own there is a finite number you can own. If a property MAKES you $1 a year the number is unlimited.

If you are comfortable with the idea of the US as an investment arm and you see the value in Emma's advice on properties she suggests then don't wait for the next one with the right coloured bathroom for $1000 less. All these things are getting 14-16% NET yields today. They are paying you to own them from day 1. In ten years time I can 100% promise you that paying even $10,000 more or less on every property wont have made any discernible difference to the overall performance.

My biggest issues in the US are:
1) Can you get good tenants to pay the 'advertised' rental price?
2) Will the property remain attractive to the tenants in (1) above in years to come?

If you can answer those questions confidently then the actual price really makes no difference. All properties that will always rent well are great buys as they are painless long term investments.

Due diligence is obviously important, but there comes a time when you have to stop mucking around and actually buy.

 

[handyandy]

In nearly 25 years of buying real estate I have bought one bargain.

I have bought many really good buys. Some of those (one striking example) was by paying what everyone thought was a stupid price. I have been openly laughed at, but a couple of years later 'we should have all done what you did.' You will NEVER own anything if you will never pay more than anyone else. By definition the owner of any property must have paid more than anyone else was willing to.

I know a lot of people who never buy anything because they are waiting for the 'perfect' buy.

I guess its easy for me because I know Emma won't ill advise anyone, but she has spent years researching this particular area and nearly two decades researching and living the US. If she recommends something it would already be an unheard of buy for an inexperienced foreigner to get their hands on, probably the top 1% of thousands of deals available at any one time.

To my mind paying $70k or $90k for a property that cost $300k to build a couple of years ago is really irrelevant. Buy 3 and get an average of $80k. Solves the problem. In the long run, it makes bugger all difference really. If the numbers work - go for it.

If a property costs you $1 a year to own there is a finite number you can own. If a property MAKES you $1 a year the number is unlimited.

If you are comfortable with the idea of the US as an investment arm and you see the value in Emma's advice on properties she suggests then don't wait for the next one with the right coloured bathroom for $1000 less. All these things are getting 14-16% NET yields today. They are paying you to own them from day 1. In ten years time I can 100% promise you that paying even $10,000 more or less on every property wont have made any discernible difference to the overall performance.

My biggest issues in the US are:
1) Can you get good tenants to pay the 'advertised' rental price?
2) Will the property remain attractive to the tenants in (1) above in years to come?

If you can answer those questions confidently then the actual price really makes no difference. All properties that will always rent well are great buys as they are painless long term investments.

Due diligence is obviously important, but there comes a time when you have to stop mucking around and actually buy.

One further issue that I have and I can't see a way around, until such time that a US based financing deal can be done, is the exchange rate exposure.

Once you can refinance, even if you need to leave 30% in the deal, then you would have a very good cash flow investment.

Cheers

 

[lawsjs]

Finance will come.

Don't forget the only reason for these great buys is because of the financing cataclysm.

My guess is the S&L crisis is something like 30-40% of sub-prime.

I dipped my toe in the water well after the S&L recovery. I am not just dipping (in relative terms) this time. I like my mate's new gullwing in LA who retired after buying 4 properties in 1995. Yes it has silly flippy paddle things for changing gears, but it is still nice.

Buying now is buying within 5-10% (my guess) of the bottom of the overall market.

Banks will gain confidence and finance will come. You want to be buying now, no ifs or buts about it. If finance was available easily, the prices would be at least double.

An AU LOC to purchase for cash is 100% finance. Where else can you get 100% finance on an investment that is paying you solid returns from day one and complain you aren't getting more gearing???

I am not a professional forex guy, but does anyone really, seriously believe the $AU is going to US$1.30? I would argue vehemently the other way. If you can see a country with an economy a fraction the size of even just California having a higher exchange rate than the US as whole then I agree with HandyAndy about the currency play. Otherwise it is ALL in the AU investor's favour.

 

[NedKelly]

I am not a professional forex guy, but does anyone really, seriously believe the $AU is going to US$1.30? I would argue vehemently the other way. If you can see a country with an economy a fraction the size of even just California having a higher exchange rate than the US as whole then I agree with HandyAndy about the currency play. Otherwise it is ALL in the AU investor's favour.

The US makes nothing and imports everything it consumes. Australia is a big quarry and exports iron ore, coal, uranium and bauxite like you wouldn't believe. As long as China keeps buying raw materials from us and the US keeps buying their goods from China then AUDUSD @ 1.3000 is a certainty.

 

[lawsjs]

Australia has less population than LA County and is being financially hobbled by a government with only the vaguest grasp of financial management. The $AU is nothing more than a trade to the big boys. Interest rates will support it in the short term but to believe mining booms last forever is a leap of faith I would shy away from.

I have only bought one US property with the $AU above .70c. The fundamentals are there regardless. The US may be in decline but there is an expanding population of 200,000,000+ people who have to live somewhere.

The British Empire was destroyed in Europe but I would still like property in Knightsbridge or even Camden!

I think there are very big holes in the argument the US doesnt make anything. It is still an economy on a scale Australians have difficulty comprehending. Vast though China is, it still faces enormous challenges and wont be a painless ride to wealth.

200,000,000 people need to live somewhere.

 

[bevk]

Lawsjs, it gets even better - the latest US census shows that there are 310,000,000 million who need to live somewhere

 

[NedKelly]

Australia has less population than LA County and is being financially hobbled by a government with only the vaguest grasp of financial management. The $AU is nothing more than a trade to the big boys. Interest rates will support it in the short term but to believe mining booms last forever is a leap of faith I would shy away from.

I have only bought one US property with the $AU above .70c. The fundamentals are there regardless. The US may be in decline but there is an expanding population of 200,000,000+ people who have to live somewhere.

The British Empire was destroyed in Europe but I would still like property in Knightsbridge or even Camden!

I think there are very big holes in the argument the US doesnt make anything. It is still an economy on a scale Australians have difficulty comprehending. Vast though China is, it still faces enormous challenges and wont be a painless ride to wealth.

200,000,000 people need to live somewhere.

Just because the US has a large economy doesn't mean anything from an exchange rate view. Switzerland has a population of less than 8 Million but it's currency has appreciated some 30% over the US$ during the last 5 years. Although the current Australian government couldn't run a school tuck shop and seem intent to stiffle all forms of entrepreneurial spirit the current economy is doing pretty well exporting raw materials and if this continues (and I did say if in my previous post) then the balance of payments alone will necessarily keep the AU$ high.

As soon as the US decides it can make something then the company executives move the production to Mexico or China where they can use cheap labour.

310,000,000 do need to live somewhere and there are so many empty homes in the US because they built far too many than they need. Unless people have a job and can afford to pay the mortgage, or rent, they will remain empty.

 

[whitegoodman]

US dollar will come back into strength as soon as theirs a whiff of hawkishness in their rate policy and or flight to safety crisis. Imo those people fixated on the devaluation of US dollar through money printing are a little naive (tin hat crowd), look at the EU, Aus, UK money supply (M3) and tell me the US is in isolation in their policy...

 

[lawsjs]

We could argue forex for weeks. I will say this. I far preferred withdrawing $US rent cheques in Australia when the $AU was 0.48c (during our 'last' mining boom) than I do today. Alan Greenspan has frequently commented that predicting currency movement is nothing more than tossing a coin.

I am ecstatic I have an extra 100,000,000 tenants to choose from this morning!!

 

[Emma171]

Oh silly things part 4000..... They have textured walls and ceilings here... Quite a few people surprised at this. As I am painting right now, it is a reminder that they spray texturenover gyp rock and then paint.... Hides all ills in theory.