All Forum Posts by: Hadar Orkibi

I agree with @Ali Boone, more often then not there is a reason why houses sell so low, often the areas are wore zones, or have high vacancies or the house have some issues. not saying its not doable as one off bargain but a 2% suburb will be pretty rough.

I have a family friend in LA that owns over 1000 units (multi units) he started purchasing them back in the 1970s when yields were over 15%. time have changed, we are in the information age, there is BP and everyone who is financial savvy know that REI is the best way to build and preserve wealth. Its also to do with where the market is at, at the top of the market it is much more challenging to achieve higher returns, in the recession recession there are opportunities to buy houses at a discount so provided rents stay the same the returns will be higher.

for example, i see that in Memphis back in 2007 house sold for 100k, then 2013 same house sold for 55k and now 2016 its selling for 80k.  if history will repeat its self, and property cycles often do every 10-15 years soon the party will be over for most. and new party will start to those who are well positioned.

So @John Wallace considering you have few properties under your belt I suggest be patient and wait 1-3 years for the correction. 

Saying that,  +1.5% would sufficient for good location.

The Best time by far to buy is in the very early recovery after the downturn. I.e 2012-2013. that would be 7-8 on the property cycle clock. 

On 5-6 O'clock which is the bottom of the slump you can also pick up some good bargains at near rock bottom prices from distress sellers.

We are do for another global financial crises and according to international "Experts" it should be in the next 1-3 years. probably starting in Europe or the US, unless a wore start or something like that.

Is that satisfactory answer for you @Timothy H.

@Kristen Daniel JV is a good way to achieve your RE goals but you have to get it right, otherwise it could be a disaster. always seek proper legal advise before signing anything.

The key for investors who are interested in doing JVs is to find a partner who has what you lack.

I Done a few of them and here are some Key points to remember: 

Pros: J.V partners can pursue property development or long term investing which otherwise they couldn’t, using the strengths of their partner to fill-in their weakness.

Cons: Proper Due Diligence is required by both parties on their partner’s capabilities, track record and Integrity.

Exit strategy can alter - depending on possible uncontrolled factors like: Change of circumstances for one of the partners, Market climate, Availability of funding. Set rules before you start!

Carry Due Diligence on the Deal & Partner:

Does the Money Partner have the funds available in Cash or has a pre approval from the lender? 

Can he act FAST when required?

Has the partner who will manage the project done it before?

Who did they do it with? Was the project done on time and budget? 

Does he have good systems in place?

80% of money partner decision to JV or NOT is depending on the Integrity and experience of the "Hands on" investor.

I hope tat helps, H.

Apparently 2% is even not available in Memphis TN, the cash-flow city of US. to be clear that is 20% Gross Yield. ( income / purchase price x 100.)

it maybe possible to achieve that level but in C class areas, wore zone or if you get a great bargain at real wholesale buy.

BUT watch out for vacancies! I would rather lower yield and better property in better location.

1.5% in +B areas should be reasonable deal for SFH.

Typically MF and Commercial properties can do better then residential.

@Billy Maloney

Thanks for sharing its great to hear your story and encouraging for us out of state and out of the US investors.

I been investing out of Area in New Zealand for over 10 years and feel that with the right team in Memphis we can make it happen too. As you mentioned team is everything, especially when one is looking long term investing out of area.

Keep up the good work and stay focus!

Cheers.

I second @Dean Letfus on this, unless you can buy uninsured houses for land value, fix them and make over 50% equity and 10% yield Chch is not a great option.  and doing the above is not easy and i wouldn't recommend it unless you are a builder and have a lot of experience. 

I had 2 properties in Addington, sold one after the first EQ and started in AKL, never looked back.

Rents in chch are declining and prices too in some places. there is now over supply of houses.

I'm aiming to sell my last house there next year and shift the equity to the US.

There are many economists in the US talking abut another crises coming within the next 1-3 years so this will effect NZ and the US housing market, time to buy by buy!

@Kartik T. Sounds like the assets are under preforming considering NO cash-flow and NO appreciation.  Why own it ?

I understand that you are not professional / full-time investors but its no reason to keep holding this asset for another 20 years. (option 3).

I would seek a market with Cash-flow and a deal with some equity. seek to do a1031 Exchange.

Get your money working harder for you.

There is no free lunch for getting above average results. you will need to THINK and seek some advise about which way to go. Turn Key,Or Not TK, SFH or Multi Family, Commercial? or Syndication? there are many options to choose from.

For starters I suggest you join your local Real Estate Investors Association, attend local BP meetings to have a feel for what investors in YOUR area are doing and where they are investing. (out of state?)

Selling an under preforming asset is good idea, especially when the market is near the peak.

If you wait 1-2-3 years you may not get 600k for them! 

All the best.

Welcome to BP @Nick F., The latest LVR restriction and the possibility of DTI (Debt To Income ) restrictions are though for most investors, even harder if you just starting up.

Keep reading the forum and ask questions, Invest where the numbers make sense and where you can have solid team to support you. 

All the best!

True @Dean Letfus, Sorry, I meant this MIG 

http://memphisinvestorsgroup.com/

- I know nothing about the other group is was posted by mistake.

Can a suggest that you join the Memphis Investors Group:

www.memphisinvestmentgroup.com that and the REIA would be my first choice.

Forming relationships and networking with like minded people is fundamentally important.

And keep reading BP and asking questions.