Thanks for your thoughts gents.
Brandon Turner I am from Canada but live in the USA. I am not in the US very often so I am looking to invest from abroad. I am not bound to any strategy or region but I am limited by my need to asses an opportunity remotely for the most part.
At the moment my analysis has brought me to consider buy and hold in Dallas ($100k range) using a Foreign Investor Loan for leverage (65% LVR and 6.25% interest) and to buy and flip ($100k range) and buy and rent ($50k range) in Kansas. The Dallas hold strategy will bring about 15% annual return thanks to the loan (9% without) and hold in Kansas will bring about 13% annual return (no good options for loans there) and the flip in Kansas will be about 15% per flip (3 per year?) for 45% ish annual. The flip looks the best but there may not be much capacity with my contact.
Does this sound realistic and are there better strategies for a remote investor?
What area are you in and what is a fantastic cash flow?
Tiger M. I like the 15 year loan strategy but I am questioning if its is best. I am considering this for my Dallas buy and hold strategy. The bank that will lend to me as per above will do it either as a mortgage w/ 15 year term or a interest only loan both at 6.25%. If I buy 10 houses with 35% down at an average price of $100k I will require $350k down. If I go for the 15 year mortgage my annual return would be 19% with the interest only loan or 11% with the 15 year mortgage. The difference in the annual income would be $25k ($68k vs $43k). However at the end of the term with the principal paid out the Mortgage route return would be 24% vs 19% for the loan due to the pay down of the principal. This is excluding appreciation which effects both strategies equally. So the question is would I invest the extra $25k annually from the loan route to make up for the difference. With compounding returns it is quite easy but...
Brian Burke
I am curious about California. What are the prices of homes you are buying and what type of net cash flow are you seeing?
I have a contact that is buying apartment complexes in Dallas which are distressed. They evict everyone and add security gates and cameras and day care facilities etc... then they rehab and fill it back up with higher rental tenants and when they get to 85% capacity they finance it with a bank. They return the investors money once they get the financing but investors keep a significant interest in the property after recovering their investment. Is this the type of thing you are doing?
