All Forum Posts by: Marisa R.

With the US prices being so high, has anyone thought of investing in markets that are tanking like Sydney? I understand it will be a long game and you will need to rely on some firms to help with this. The more I think about it, I am starting to think there might be a play there as USD is so strong compare to AUD. Their prices are very low and it is such a great city to be in. Anyone have any thoughts or recommendation?

I am an Australian investor but been investing in both markets

I think median house price of Sydney is $1M last time I looked

Rules apply for foreigners buying in Australia, its not same as in US where anyone can buy if they have the cash

You wont come close to buying cashflow properties unless you go regional centre?? which I would not recommend

Don't want to rain on your parade but now is the wrong time to buy in Australia as most markets in Australia are falling

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Originally posted by @Michael O.:

@Marisa R. you are really crushing it, did you buy them off market and are you doing a BRRRR? Keep doing what you are doing. To infinity and beyond.

Foreclosures, not the BRRR strategy will be possibly flipping

Thanks

1 Vote

Originally posted by @Aaron Hunt:

Originally posted by @Jay Hinrichs:

Originally posted by @Marisa R.:

Originally posted by @Jim Chuong:

@Marisa R.congrats! Amazing story! I resonated with this because as a Canadian, this is exactly what I did in Phoenix! Buying detached houses for $50k and 2/2 condos for $30k! More power to you!

Great. Good on you

we got the timing right

Now we just find the next market that is rising

What do they say.....

Fortune favors the bold

Believe Canada market has softened???? Is this correct

the issue you have with so many US investors is they are feed this appreciation is gambling cash flow day one is the right way to do it.. when in fact its one way.. but not necessarily the best way . just look at all the arguments 5 years ago with SF BAy area investors and every one else.. well the SF investors killed it with appreciation .. were as cash flow is cash flow if the values never rise you need to have some scale.. other wise its just a slow way to build equity over time IE your tenants pay your house off.. the big wealth builders are forced appreciation or organice appreciation. you get of course by major remodel refurb.. and or getting ahead of the market.. researching were trends are going IE the move back into the urban core hip cool neighborhoods.. you take some risk sure.. and in the beginning there is not much or any cash flow but then when houses start selling to owner occ the game is on.. if SFR homes really never sell to owner occ they will just trundle along and the value will only be what another investor will pay for a given rental rate.. pop it into the BP calculator and that spits out the value.. which stays stagnet unless rents rise a ton.. which in many markets that simply does not happen rents stay pretty stable.. so for the blue collar type rental areas or towns.. that's the stability.. not much up but not much down so you need Doors.. and then to get doors U need ton of debt generally.. and that alone takes on risk of some sort.

Those who only talk about cashflow are the ones who buy lower Class/cost properties <$60k, that’ll take one generation (30 yrs) to throw off type of meaningful appreciation.

My last close on a turn-key Class A in a hot market was 12/12/18. Today, a model match just went up for 27.8% more. That’s in 7 months.

Would have to hold one of those middle of nowhere cashflow shacks for ~8 years and pray for no vacancies (and there always are) or big repairs to get those gains.

In 7 months I refi’d down over 1%, (cash-flowing $350/month), and my total vacancy time from purchase to tenant move-in = 4 whopping days. The property is 2,400 miles away from where I live.

Frankly, I think you need both, its a catch 22. You need capital/appreciation to grow income streams

I have learnt a valuable lesson......not to get fanatical about one strategy as I could be cutting my nose despite my face. Just my opinion

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Originally posted by @Lassy G.:

Great and awesome. Your story is very inspiring. I am an investor from Amsterdam (Europe). It has been very hard in real estate in the last couple of years. In Amsterdam, you can not buy a garage for 50 000 USD and the price of a 500 m² apartment is between 200 000 and 250 000 USD. Prices are still climbing. The market is very hot.

A few months ago, I began investigating the US housing market, including Detroit. It's amazing how affordable it is. But my lack of knowledge of the local market sometimes holds me back as I read that things change from one street to another.

How did you approach the Detroit market and what are your tips?

Like everything, just researching

You may find this thread of interest

https://www.biggerpockets.com/forums/55/topics/619388-detroit-the-come-back-kid

1 Vote

Originally posted by @Anthony Rosa:

Originally posted by @Marisa R.:

Originally posted by @Anthony Rosa:

Originally posted by @Jay Hinrichs:

timing is everything.. and you timed it perfectly . you made your equity on Appreciation.. BP most folks think its gambling etc etc. .when in fact appreciation is what makes most investors wealthy.. either by organic or forced..

I would not expect the same results in Detroit though.. PS there are lenders for your situation.. I have done well over 200 buy hold loans for Aussies.. rates are higher but in your case in Atl you would have been able to double what you bought with the same cash and well now you would have 4 mil in property instead of 2 mil.. by simply pay a little over market rates for debt.

100% agree with you that appreciation is how one increases their wealth. It's that big lump sum in a relatively short perion that takes you from one bracket to the next. Just look at Harlem NYC as an example. People that bought at the right time went from middle class to being worth millions in liquid.

..... and question is how do you know when a market is appreciating? Why do so many investors not buy in riding markets??

They don't buy because it's expensive to buy in an appreciating market. Timing is everything but it's also a gamble. Example: Right now it's expensive to buy in a gentrified area because the sweet appreciation boat already sailed. If you did buy pre gentrification you timed it right but it was also risky. You could make it or break it.

I hear this a lot, "timing the market is risky", not if you actually jump in when the market is rising and see volume shrinking, boom/bust cycles are all about demand vs volume..... That's just my observation

1 Vote

Originally posted by @Jay Hinrichs:

Originally posted by @Marisa R.:

Originally posted by @Mike G.:

@Marisa R. how did you have the cash reserves to make all these purchases if I may ask?

I mention in a previous post

I was investing in property markets in Australia buying and selling and basically rode a couple of boom cycle in 3 different States in Australia

I started investing in US in 2011, but I also later got involved in small development projects

Here is 3 villa development I completed sold in 2015. I have completed 5 in Australia. Two in Atlanta

For those interested, as you can see we have we have totally different product in Oz, and generally much smaller sq ft is the norm

https://m.realestate.com.au/sold/property-house-wa-spearwood-119276119

Marrisa not to get off topic but i am curious.. what kind of NET margins do U make in Perth on new builds like this.. IN our markets we aim for 15% net profit.. so a 500k new build about 75k in NET profit minus office expenses .. many times its 8 to 10 and occasionally we hit 20% or better but thats not common.. I sold one in Charleston this year and hit 30% on a 2.2 mil retail sales price which is my record on a SFR new build.. but in our subdivision type projects like this one you posted as i said 10 to 15% 50 to 75k per house. last year we build 34 of these like you built.. and thats about where are numbers came out..

IN todays market in Perth could you duplicate what you did in 2015 ?

Also I have heard with the mining boom in WA is in decline did this cause any devaluation of sales prices in Perth. And for US folks reading Sydney and and EA and WA is a 5 to 6 hour flight apart just like CA is that far from GA..

On that project in Perth made 25% net return. By the way these villas are now only worth about $450k each, timing is everything.... sold the lot....

I also was developing in Melbourne market where I was making 40%. I would fly over regularly and had a project manager managing my projects

Another strategy I use is putting together DA, design and drawing and on selling to BC/builders.

This is a low risk strategy, good land with right zoning.

Here are some numbers from 2016 project, I purchased a house in Melbourne for $420k and got designs for 3 townhomes cost $20k, just employed architect and onsold in 12 months for $850k to a builder/contractor

The trick with this one is the builder/contractor must have 20% net profit and the designs must be very good and what the market dictates otherwise it wont sell

Australian property market in general is now in decline. We have gone from decades of roaring economy, but now its softening. I don't think we will see a crash but perhaps 10-20% falls dependent on State/location. Also currently have a credit squeeze hard to source finance

1 Vote

Originally posted by @Jay Hinrichs:

Originally posted by @Max T.:

How did u get the 500k?

I think I recall like many aussies they had massive appreciation .. so many in that country back then did a few things.

they either sold and moved equity or they borrowed against their equity and invested in the US.. some did great like the OP others got hammered because they bought C D F class.. in many other markets.

on top of that the AUD was at a historic high against the dollar.

Yes, correct in 2011 the AUD was on parity to USD, if not even higher, this was due to the Aussie mining boom, it was the mother of all booms. We saw some properties double within 12 months, nuts really.

Anyway, the thing is there is an interesting twist here, if I decide to bring my capital home, the currency play means I make 45% on my USD? Of course still have to pay capital gains tax etc. though I don't plan to sell at the moment, enjoying the cash flow.

1 Vote

Originally posted by @Jay Hinrichs:

Originally posted by @Max T.:

How did u get the 500k?

I think I recall like many aussies they had massive appreciation .. so many in that country back then did a few things.

on top of that the AUD was at a historic high against the dollar.

That's correct during 2011 the AUD was on parity or higher with USD. Today a different story.

So there is another interesting twist to this story, there is a currency play here, if I bring my capital home I will actually be making 45% profits just in the currency play. However, I would then still need to pay capital gains tax. Not planning to sell at the moment, enjoying the cash flow.

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All Forum Posts by: Marisa R.

Marisa R. has started 68 posts and replied 570 times.

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Post: Foreign Investor - How I turned $500K into $2M

Post: Foreign Investor - How I turned $500K into $2M

Post: Foreign Investor - How I turned $500K into $2M

Post: Foreign Investor - How I turned $500K into $2M

Post: Foreign Investor - How I turned $500K into $2M