All Forum Posts by: Jay Hinrichs

@Manch Hon 

  I am not an expert on OZ RE  although those I know there say that RE is on the rebound.

And the OZ investor has basically stopped buying US for a few reasons.

1. Cash flow promises of 20 to 30% never materialized.

2. Many of their properties here in the US are vacant and stay vacant.

3. There have been National News stories of the perils of Turn Key investing in the US.

4. Even the marketing guys are getting somewhat realistic with their returns these days showing 8 to 10% net.. And the OZ investor can put their money in a bank for 4 to 6% so why go to the US and risk on a rental.

5. Their market is picking up steam again.

Bubble.. certainly can be in all those countries and citys.. I think the major difference that is hard for us US investors to compute is that Canada and OZ only have 35 million or so total population. So they just don't have huge hangover inventory... CA has the China influence I owned property in BC and the Chinese have bought huge in Vancouver ( don't know about Toronto) and they pay cash much of the time.  So with RE being owned for cash bubble is less likely.. Then you have their natural resource based economies.. As long as China keeps going I think they keep going but there is signs of this weakening.

that's my take on it.

@Rick H. 

  I had a Aussie co author who put the OZ spin on it..  Terms are generally the same.

Although I like this one   "Negative Gearing "  Their term for Negative Cash flow.

so  an IP is either neutral Gear Negative Gear or Positive Gear..

OZ real estate is the same as the SF bay area.. with the finer areas Like SF and peninsula average prices 800k and up... Same in OZ in the bigger cities.. Average little bungalow there is 350 to 500k... They are RE nuts.

They also got sucked into buying cash flow rentals in the Mid west by the thousands by the same marketing companies that hit up Socal investors and investment clubs.. Virtually all of them over the last 5 to 7 years have gone to OZ for presentations and have hooked up with OZ marketing guys.. Who many in the way of Ethics make our marketing folks look like choir boys...

The transactions a lot of these folks got put into  In the worse parts of Detroit, Rochester , Buffalo, and every other big city was Criminal in my mind... Many would buy homes that never got rehabbed or ever got rented... And of course they all paid cash and then you think investing out of state is risky try it from 12 thousand kilomiters away and there night is our day.. Its really tough... Plus they have the same experience a solid CA rental will have People pay the darn rent and stay for years.  HUGE learning curve.

So I wrote a little E book on how to do proper due diligence etc.. Over there there is no Zillow Truila,, and so investors rely on RE agents and Notaries to do title search's. WEre here in the US we have so much info at the computer.  And these OZ are intelligent hard working and very cashed up investors.. But they just did not know what they did not know plus they believe everyone they have no clue as to what a hustler in Detroit or Philly is like.

there banking system is all on line NO CHECKS no Money orders no cashiers checks.. Rents are all auto paid first of the month if you don't have your rental check in your in default.

So when they bought rentals over here many got so frustrated because they had no clue that 50% or better of mid west renters don't have and will never have a checking account to begin with.. Just a foreign concept.

Now many did very well especially buying in ATL, PHX, LV  in the down turn.. But these are cash flow investors they would not even consider a Neutral or negative gear.. So they did not buy in CA OR WA... in any  numbers they flooded to those nice marketing companies promising 30% return in Detroit

I can go on and on  but you get the drift Good Day Mate

please go into the archives on BP and read about wraps and all inclusive DT's a long with contract for deeds etc etc. I could write a book on al the methods you can buy..

Waite a minute I did write a book   LOL... In all fairness I wrote one for Australians on the perils of buying in ghettos in the US..

I am sure your not going to be doing that.. so just get on the archives and read up.

its very possible.. however most of the time the situation will be

1. the home is far over priced so seller willing to finance with no down.

2. terrible area or Ghetto area.

3. odd ball property that just won't move any other way.

4. bad market and seller wants to create cash flow.

I personally have sold with no down deals on my OREO.. I was out of state and just wanted nothing more to do with managing PM or tenants so preferred to sell.. But I usually get a token down.. I have sold a few of my OREO on BP with as little as 2 to 3k down and I carried the contract.. so yes it happens. But you have to hunt for them. And as markets tighten up those dry up.

that when the Bitterroot is running at 2700 CFS the Green drake hatch won't happen

That we live in the greatest country on Earth.. that real estate business is one of the best on the planet as anyone can do it regardless of education wealth ethnicity etc etc.

Along with Cash is King... Buy low sell high.. And low end cash flow rentals are Risky proposition to the un aware.

NMLS only means that they are licensed through the federal system.. its not an endorsement of any kind...  Just FYI...

I am a licensed NMLS mortgage banker ( in active) so are hundreds of thousands of others. Its what you need to work in the Mortgage bizz. you would be more concerned if they were NMLS licensed

Agree with K marie  I would sell this one.. Unless you see upside short term say 400 to 500k in 3 years.. then a small negative for that gain is acceptable just like CA. investors.

Although you take on risk of a Minnie bubble and values drop...

30k net gain on a 350k project is not the end of the world.. Most builders that build new construction net 10 to 15% ( of course they are building multiple units a year)  And many rehabbers don't do a heck of a lot better given the competiton. So your not in that bad of shape is you can NET 30k  including ALL in costs. ( which most investors have a hard time calculating) as K marie points out many times.

Nope have no clue..

agree with the gold rush mentality though

Este  Southeast

@Matt R.   for companies its just not that profitable.. most TK guys are making there money just like any other flipper.. on the front end. . when the buyer closes the TK operator has all their profits in pocket then its up to the owner to deal with the property and the PM...

In a partnership like we have been discussing there is little to no up front fee. So TK operators by and large just could not do this as they have to pay there WEst coast marketing folks and or national marketing folks  then there over head and such.. so they need to make there profit on the sale.

I did do just this as you state and bought 350 SFR's and it went very well and we sold and liquidated to some very nice results.