All Forum Posts by: Eric Gabriel

Hi @Geoff Bailey!

I've messaged @Daniel Ryu a few times. I'm determining whether to invest in the US of Korea. My wife and I are testing the Junsay method. As you might assume, we are leasing a condo/apartment with a deposit of $50,000, and subleasing it to a tenant that is paying $500/mo. There are no other expenses except the HOA/management fee that once subleased is paid by the tenant ($80/mo which covers water, garbage, and grounds maintenance).

After the year/lease, we either get our money back or the owner has to give us the title to their property.  The owner pays for all the repairs and taxes, and assumes all the benefits/risks of appreciation/depreciation.   It's similar to a lease option, but the difference is there are no monthly holding costs for me (the investor) such as taxes, insurance, or repairs.  

I know if I buy a house for $50,000 in the US, I might get $700/mo.  But after expenses I might net $250, and if not rented the holding costs can take you out.  It happened to me once in Anderson, Indiana on 2 houses. My goal is to invest in simple, safe, and strong investments.  Maybe I will help others too once I finalize my first test.  I've been here 8 years and have leased several condos/apartments so I know a thing or two.  We've put a deposit down of $350,0000 on our current residence.  You save faster when you don't have a mortgage or rent. 

A sweet deal for US investors is we can make up to apx. $98,000/year in FOREIGN INCOME (exempt from US taxes), which needs to be claimed on your US tax returns.   As foreigners, we pay a 17% flat task tax on all earned income, if we choose, or we can choose a progressive tax which is I think 6%-32%.  Don't mark my words, I'm not an accountant and I'm not sure what the rental income rate is. I read somewhere 15% of gross rents. 

Additionally, a US citizen can come here and take advantage of the great affordable health care.  Without insurance a dental scaling cost $60,  I dental implant cost $1000-$1500.  Most medical is 1/3 the cost of US hospitals.  Medical tourism is picking up an will eventually be booming.     

Anyway, the subleasing test seems to be going well so far.  We've already gotten our money back several times when putting a large deposit down on our primary residences. 

Eric

Depends on how much you buy them for and the operating expenses.  Keep studying and asking.

I've been looking at note investing and multifamily turnkey deals. I run into the same financing options. The best bet is to contact a broker. There are options. There job is to find you the right bank. They get a point or two that you will see on the HUD (loan doc)

I have 7 units in Portland, Oregon.  I bought them about 15 years ago.  First, I managed everything, then I got a job at a shipyard in 2008 and contracted the work out to another property management company.  I'm glad everything has worked out and Portland is kicking butt.  I'm glad I voted over and over again for no sales tax no matter what the politicians said.  It helps the business owners.

Good Luck from Geoje, South Korea

Thanks for the info guys.  I'm a Portland native that has been looking at properties since I graduated from high school in 1997 and actively investing since 2003.  I tried out of state investing in 2008 and got burnt because I didn't have boots on the ground.  Took a job teaching engineers at a ship builder in South Korea and now I teach English independently to children and adults in the same area.  

I have 7 units in Portland.  I have a 3-plex and 4-plex and am trying to conservatively lever them since I've missed a few great opportunities due to insufficient liquidity.  

Thanks again! 

I bought a 3-plex in 2003, took out a HELOC then bought a 4-plex in 2007. From my experience, estimate that your expenses will be about 66% of your income (this includes every expense, management fee, and the roof that you're not thinking about). Therefore, if you make $3000/mo in rent, expect that you will get at most about $1000/mo in a best case scenario of it being fully rented.

When I managed them, they were rented out faster and I used more of the security deposit to pay for repairs.  I did most of the repairs myself.  Contractors can be expensive.  As of 2008, I hired a management company does it and it takes them longer.  (I live in South Korea and teach English.)  They do have good systems in place, but it takes them more time and they have a tendency to not use the tenant's security deposit.   

 Andy, 

I have a due diligence question.  Why 70,000+?  What is the rationale?

 Thanks,

Eric

I just wanted to say thank you all so much for your feedback.  I've been in ongoing talks with the owner.  It has been slow, but my schedule is quite full so it has been a good thing.

The population has consistently been 20,000 since the 70s.  There's a University nearby that has peeked my creative interest.

This is the first deal that seemed to make sense to spend the time to analyze.
Deal OR No Deal?  That is the question.

What should I be looking at? 

I'm actually interested in cashflow, but would consider a value add, wholesale, or flip.

SUGGESTIONS and WISDOM are highly sought. 

PRICE
Asking Price: $287,000 (owner financing available)
Number of Spaces: 50 (27 rented, 22 vacant according to spreadsheet $225 average monthly space rent)
Current Gross: $82,620 (not verified yet - how to best do this? bank statements?)
Current Net: $56,520 (expenses not verified - how to best do this? ?)
Year Built: 1960's (units seem to be on the older side but not owned by the park)
Parcel Size: About 11 Acres
Cap Rate: 19.69

INFRASTRUCTURE
Vacant Spaces: 22
Number of Park Owned Homes: None
Road Type: Concrete/Asphalt/Gravel
Flood Plane: No

UTILITIES (It seems that most park buyers like utilities to be connected to city water and sewer. Is this possible and at what expense?)

Water: 2 Private Wells (EPA Compliant)
Sewer: Private Sewer System (EPA 5 year Permit renewed in Jan, 2015) 
Electric: Billed Directly to Tenants
Gas: Billed Directly to Tenants
Cable TV: Billed Directly to Tenant

Trash: Billed Directly to Owner

LOCATION

I don't know much about the area since I'm out of state.  I see that the population is stable.  It's not falling, not increasing.

I'm looking to do the same. I'm looking to move back to the USA from South Korea and have $300,000 to leverage with financing.  Still getting my ducks in order and am risk averse from a out-of-state flip gone bad in 2007.  It was an expensive education, but it won't happen again.  Keep me posted.