US foreclosures #3 (aka the Emma171 thread)

Sorry been in the land of Vegas and non communicative but have just had a few really ongoing matters leap to the fore that I am sure everyone will see more of...

Firstly, I LOVE the auctions but ultimately, here in Vegas at least I can see why everyone marks up.. They aren't always screaming deals...I am deemed a regular and can ultimately say that there CAN be good deals but if you work on the following:
1) you will pay off liens.... Guesstimate $1k
2) you may yet have to evict property owner... $300
3) you have to conduct clean up.... $1000
4) you can't inspect/enter normally so no idea what systems are/aren't working or sabotaged..... So assume extra work and pad for broken a/c etc... $7500

You are probably needing to buy a good $10 - 15k below where you would normally through the REO market.

So do you???? Point in question from yesterday...
4544 Doig Lane 89110
It was listed originally on the MLS for $65k....sold yesterday at the auction for...drum roll .... $77k

Bargains can definitely be had, but not vast numbers from my now 8 x 4hours worth of auctions are.


NEXT BIGGIE... If buying stateside and you see a property listed older than 1982.... Check it really isn't older especially 1979 .... Lead paint issues mean that people are being very naughty and listing properties as 1979 or 1981 that are in fact 1978. GRRR... I generally stay a lot lot younger but still.

THEN... If I see one more flip posing as an REO!!??
SO... How to tell or guess..., these are generally those properties that are just purchased within the last week at the auction.... I have been watching one go through the paces....
BE suspicious if ANY of the following are true :

- no interior photos
- no photos
- photos are from a different season
- verbiage includes " conditions may be less than perfect " (read we don't have title yet and haven't entered the property

LOL...

Auction Price Tracking Example

Oh, for those who were/are tracking my favourite auction example. One where it WAS a bargain....

Let's track a wholesale example through to current

3 br / 2 ba
1925 Emerald Green was HUD and OO listed through REO at $64,500 and 2033 Emerald green was listed about $59k from memory

all on the market the same time...
1925 was larger but needed a decent amount of work...
2033 was move in ready... Yummy.

NOW OUR AUCTION BABY
1905 Emerald Green Avenue 89106.
3 br/2 ba/2 car garage...
Auction purchase price.... $40,100

I had intercepted and offered to take at 45k the next day ( yes,I am that generous) but by then it had been moved to the wholesaler who said they had $47k in and I could have it with liens and trashed for 49k.... I was not that generous.

So....recap... purchased at auction on the Thursday, listed on the Monday for $52k in an as is condition.... By the time they had title, they listed this property at $72k

Oh only one problem.... Zillow estimate for 1905 Emerald Green? 69,500

1905 hasn't sold to my knowledge....oh and the price is down to $69,900.

Will update on final sales...

Somersoft Belated Wedding Announcement

Heatherh got married on the 21st in Cairns.

How do I know...? Because she and hubby offered, the day after their wedding to go and change a battery for me in one of my Cairns properties!

They are both just lovely.... CONGRATS Heather... You and Jeff deserve all the best...

Hope you didn't want it quiet!

Brainfreeze

Dear Thread(s),

You have completely sucked away my social life for the past week. Now that I have finally finished I can go and have a nice cold beer. Oh wait it's raining and miserable outside....OK well a hot whiskey then.

Much thanks to all who have previously posted. Some very interesting discussions and resources uncovered, not just for LV but for general searching techniques.

I have so many questions but I've just gone over my internet usage so it'll be a nightmare to trawl through it all again to check if they have already been answered so far. Although when I get normal internet speed tomorrow I might find one of the answers to my questions on biggerpockets.com? But here is a couple.

OK so;

1) Completely new to this forum, well forums in general really. Can I print threads?
2) Tax - If I were to fly to USA and buy a house, then I could add those costs of travel etc etc when I sell the house for CG. BUT, if I used a turnkey broker service is that a tax write off in any circumstance?
3) Tax - After you have your first property then consecutive trips to the US are tax deductions, prob a silly question but...would it be a deduction from the ATO side of things or from the IRS side of things?

Anyways off to do some exercise and step away from the screen for a day!!

Again thank you to a lot of the posters positive and negative, the debate is entirely more interesting and rewarding that way. I'll PM some people.

Oh yes and congrats Heather!

been there ,done that , still got my shirt

Just a quick note to all previous posters, thanks for ruining my eyesight.
Like benny i just got to the end, but well worth it though .

i singed with MyUSAproperty about 5 weeks ago , paid the joining fee , got all the welcome letters and congratulations for coming on board stuff .
Then they started to send property flyers in PDF File, you get three or four pictures of a house and a brief out line of the property features and the city its located in . Based on that , you are expected to make a decision to buy ( but be quick it’s not going to last long and if you hesitate your gonna miss out )

A BIG THANKS to Emma and Jeremy , recco , costa and others

Cashed up and ready to go, but if I’m going to buy a house I want to see it
Never been above the equator before but looking forward to it.

All the best Andy

PS loans USA
http://www.youtube.com/watch?v=-yxj3rTn6H4

another BS article

my brother is looking very seriously at getting IPs in Vegas and consequently has been emailing me various different things he finds. One of:

http://www.jenman.com.au/news_alert.php?id=109

...and here's my reply:

omg amazing. What a legend. I have written better articles in my earliest years of highschool than this person. Man, I am going to love tearing this to shreds...



First thing - look at the way it's written - any investment lingo? Many words with more syllables than 2? sounds like a highly educated person



2: it's great how he has quoted all these sources...oh, hold on... no he hasn't, just himself and his own opinion...well I'll just put that in the jar with the rest of them.



3: "If you really want to check out the American real estate market, do it properly. Buy a ticket to the United States and check out the market for yourself. Under no circumstances should you buy property on the advice of an Australian company alone. Do the real research." - I agree with this 1,000%.



4: "If you do the research, guess what you'll find. The American real estate market is not as good as it appears from a distance. Up close, it's an entirely different market to the Australian market. There are some places in America where homes cannot be sold at any price. That's right, they can't even give them away! " - this is also true, and for many reasons which we will cover later.



5: "A lot of smart people - those with plenty of experience in property dealing - have checked out the American property market. They have come back with a simple message - don't touch it." - who are these people? Your mates? Old mate? Someone you read about on the internet?? riiiiiiiiiiiiiiiight...



6: "In one case, a lawyer was flown to the United States by one of his clients..." - who? a guy you decided to make up for the sake of this story? yeah sounds believable, since you're such a sophisticated educated entrepreneur yourself.



7: "Ask yourself an obvious question. If these American properties are such a good deal, how come the locals aren't buying them?" - easy - 6 million foreclosed homes in the US in 2010, with a further 9 million+ to come. Do you think these people now have good credit ratings now? Do you think it would be possible to just stroll down to the neighboring bank that just took your home and apply for another home loan? Google "FICO Score" and find out just how intricate their "credit rating" system is over there. About 100 times harder than here (especially now after the collapse). Emma and her brother (both big-time investors) have a FICO score of over 750 and they still can't get a loan!



8: "Right now, interests rates on home loans in America are half a percent. That means an American family can borrow $50,000 and pay $250 a year in interest! Why, then, would that same family pay $200 a week in rent when they can buy the property for a far lower payment? Something just doesn't seem right, does it?" - no, it does not make sense if all the research you have done is talk to your neighbor who is a retired shoe salesman from Bangladesh. Interest rates ARE half a percent - that's what the reserve bank sells it to the investment banks for. It's not what you get it for. You still have to pay 3-5% if you are an american citizen / immigrant with a green card. If you are a "multinational" / "foreign national" / "foreign alien" you have a very, very slim chance of getting a loan for under 12%PA, if at all.



9: "I can introduce you to Australians who have bought houses in the United States for $50,000 and cannot re-sell those houses for $25,000." - why didn't you add their testimonies into this article? Considerin the only people buying houses in the US at the moment are investors (the wealthy 1%), and also considering that Australia is one of 3 countries in the world that were not affected by the GFC, pretty much the only people that are going to be buying US properties right now are Australians. And the 1 or 2 people who now want to back out of their investment idea are trying to put their house up against the MILLIONS of houses currently on the market...what gives them the idea that they're going to have a chance at selling it this side of the next decade, amongst all the chaos?



8: "If you don't believe me, go to the United States for yourself. You'll see that some areas are ghettoes that resemble war zones. As one American agent reportedly said, "You need an armoured Humvee and a bullet-proof vest to collect the rent in this area." - this is true. There are plenty of places in the US that are ghettos and warzones - you've seen it all over TV and the movies. I could take you down D Street Las Vegas and you would see something similar. So what's that all about? It's called America. It's called the difference between the Haves and the Have Nots. We are very lucky to have not seen anything even remotely like this in Australia. But to Americans, that's just how it is over there. Read up on the forums around the internet and you will hear 1 person saying that suburb X is the worse place ever after he was mugged and shot and ***-raped in broad daylight, and then have another person saying that he has lived there for 40 years and never wants to move as he has never had anything more than a bicycle go missing from the front yard.



9: "Well, in some areas there is no rent because the properties are abandoned. They are left vacant. And that's how they remain until some Aussie spruikers come along and realise that they can sell these properties to Aussie investors." - ahhh yeah, that's because they have been evicted for not paying their mortgage. It's called a foreclosure. It's what it's all about.



10: "Well, be warned. America is now full of groups of people who are known as 'flippers'. These are wheeler-dealers who buy properties at cheap prices and immediately on-sell them to unsuspecting out-of-towners at high prices which seem like low prices." - yes, we are well aware of flippers. You can spot a "flip" a mile away: it's not a short sale, it's not a REO (Real Estate Owned / Bank Owned) foreclosure, and it's usually a bit higher price, always looks too good to be true and photos are usualy only of the outside and the seller does not want to divulge the key information that would reveal why they really want to sell it.



11: "In the years ahead, we will look back on 2010 and realise that this was the year that hundreds of Aussies got ripped off by buying American real estate." - yeah and real estate will remain extremely cheap forever and ever, (because historically that's what has happened so many times...?) and America will suddenly turn into a 3rd world country.



ps, the tooth fairy really does exist, and screen doors are easy to refurbish.

was I pretty close Emma, Recco & others??

That was one of the best reads I have had in ages...brilliant. Although I think Jeremy (brother) can't even get his FICO score above a certain level by sheer nature of his alien status.

The only hesitancy I have is regarding the tooth fairy.

I am still laughing... That reply needs framing. Actually, send it to the author!

Ultimately, I suppose the article may help someone think about due diligence a little further.

Emma171 said:

That was one of the best reads I have had in ages...brilliant. Although I think Jeremy (brother) can't even get his FICO score above a certain level by sheer nature of his alien status.

The only hesitancy I have is regarding the tooth fairy.

I am still laughing... That reply needs framing. Actually, send it to the author!

Ultimately, I suppose the article may help someone think about due diligence a little further.

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I agree the reply needs framing for posterity, though I suspect for different reasons than yours

Knowledge helps !!!

I do read what Emma writes. And I like to say she does hard work to explain things to investors, and she has good understanding about Las Vegas market..

Emma171 said:

Heatherh got married on the 21st in Cairns.

How do I know...? Because she and hubby offered, the day after their wedding to go and change a battery for me in one of my Cairns properties!

They are both just lovely.... CONGRATS Heather... You and Jeff deserve all the best...

Hope you didn't want it quiet!

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Thanks Emma! Of course we're happy to change a battery for you the day after our wedding

We just got back home to Melbourne and are busy planning our honeymoon... to Las Vegas... to buy more properties!

Here is something I came across in the City Data (Las Vegas) Forum I also follow.

"This article has maps that show how the different zip codes are doing in regards to continuing depreciation and another map showing average price for homes in the different zip codes. It appears the only places that have increased are close to the strip, Lake Las Vegas and the desert shores area."

See the maps here.

Thought it might be interesting viewing for some others out there.

Just got a note from LoansUSA.

Whilst Keithj has made it very clear to me I can't speak my mind on these issues (although the deleted posts have received a number of personal thanks from those who asked for them) - how many mortgage brokers tout specific properties with 'pre-approved finance' ????

Rolf? Are you the slackest, worst, laziest finance broker in the world for not emailing your finance clients 'pre-approved' properties you have found and can make money on, or has 25 years of active property purchasing on both ends of the Pacific made me suspicious where I have no reason to be?

Sim: Warning noted. Whilst quoting something with full attribution to the authors (including email addresses) and the publishing body (in both my opinion and, as it happens, the manager of the Channel 7 (Sydney) News desk) covers acceptably the 'unattributed' comment - remembering of course Bloomberg SPECIFICALLY encourages links to be posted and emailed as advertsing, I am sure you can see why I made such an error. In my naivety I also understood the announcement that anything which

express(es) the view of the author and neither the owners of the site (Somerset Financial Services Pty Ltd t/a Somersoft), the developers of the forum software (Jelsoft Enterprises Ltd), the forum administrators, nor the forum moderators will be held responsible for the content, accuracy or reliability of any message, and make no warranties, express or implied, as to the content of messages or any other materials in the Forum

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would allow Jan or Ian or any of you to escape a Senate Inquiry. Especially where such announcement is encouraged by the offended party. I will however, return to my box duly warned such evil acts are not tolerated

I shouldn't let this US property stuff get to me, but (sorry Keith) I find this behaviour simply appalling. I have had enough people personally track me down and thank me for my efforts in 'outing' these guys to make a slap on the wrist well worth it. My regret is that for 'politeness' I am unable to say what I think (as above) and these guys will go on trolling for the weak and unschooled.

Token Founder: Sadly, I suspect your post above is 100% on the money. I wish it were different as with some careful planning it does NOT need to be anything other than a very pleasurable experience.

Getting close to making a property purchase and need some advice/thoughts.

We are getting a home line of credit which we plan on using for our purchasing. Is it better to get an interest only loan, or pay both the principal and interest?
I am currently here in Canada and the rates are very low. Our actual home mortgage rate is 2.3% and the equity loan is 4%. We can fix the equity loan for up to 10 years.

Of course, paying interest only will result in a higher yield.

Not sure which is the best way to go.

Thanks forum!

I was sent this. As I clearly am dumbfounded by the posting protocol on SS, here is the text AND the link from propertyinvesting.com:
Just some experience with MYUSAPROPERTY ...

Just some experience with MYUSAPROPERTY ...
Have been trying to work with them for 12months now. Have been trying to work directly with Andrew Allen (CEO) as my situation has been difficult. As always Andrew responds professionally and makes lots of promises and commitments to help but never or rarely follows through. I have been left high and dry. Here's a summary:
1. Purchased a 4 unit complex Dayton Ohio, went for the one with 4 tenants and fully refurbed to minimise my risk ... even though it meant a lower return;
2. No or limited info on the area, so did my own research ... seemed ok when considering photos, county web page etc and seemed a minimal risk when considering the return and that it was already fully tenanted and refurbed;
3. Got some photos exterior and interior ... guess MYUSA only showed what they wanted to;
3. Property settled. No keys, No agent, No leases (yes I should have done some more research or pressed to see all this before settling, but Andrew assured me it was all there and he was managing it. He would described the scenario that the settling agent had all this info);
4. Andrew provided new agent contact details. I signed. Still no keys. I arranged with the agent to change all the locks and take control;
5. First inspection: 1 tenant not 4 (and advice this tenant was no good). The 3 vacant units were untenantable. The place needed a complete refurbishment - cost $32k (paid $50k for the units). Advised Andrew, who of course was horrified and was just going by information that he had been sent from one of MYUSA's clients he was selling this for ... he could not possibly be held responsible for misrepresentation as it must have been misrepresented to him ....
6. MYUSA refunded my fee (nice of them) and Andrew advised he would continue to assist ... as I said, he is very accomodating and tries hard, but is way out of his league for a credible business and the relevant due dilligence that I had paid for. Andrew helped me find a new refurb agent, which only charged me $14k ... yes he did a good job (so the photos showed), but my managing agent wanted another $7k to finish the job properly ....
7. Add to this a defaulting tenant (owes me $2k), an area in the red light / drug district and homes nearby untenanted and boarded up (only found this demographic after 5 months ownership ... not for want of trying to find out, just that the agents seemed to be reluctant to tell me and MYUSA simply had no idea) .... the list of issues goes on and on.
8. AUD$80k out of pocket .... have just placed it on the market for $USD$20k as my stress levels have hit the roof and my bank balance gone through the floor ... did I mention the Tenant is now suing for falling in the unit!
All I can say is it is pure chance if MY USA PROPERTY manage to set you up with a good one ... it is not to do with their good management or 'people on the ground' ... I was advised all of this and that the property was screened and out of the millions of properties for sale this was one of the good ones that My USA as experts and professionals have sought out on my behalf.
If you want to know more, I am more than happy to share my experience ... you will get nothing but the truth from me. Be cautious when dealing with Andrew from My USA though as I guenuinly believe he is trying to help and he believes he is telling the 'truth' in an entrepenerial / marketing way ... he is the kind of optimist and positive thinker that under normal circumstances you would like to be around.
kind regards
GP

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And the link:
http://www.propertyinvesting.com/fo...overseas-deals/4336074?&page=1#comment-239628

To attempt to dot all the 'I's' and cross all the 'T's' it was posted on the 21st June 2011 at 11:41am by 'Bilobunch'.

Sadly he/she seemed to have missed all the removed posts and later oblique references to the 'cowboy' operators out there, both on somersoft and propertyinvesting and has been stung. Not if I had my way would he have been, but I have tried my best and I digress....

Bev - I/O.

Interesting article here, about the breakdown of foreign sales in Vegas in May. Looks like Australian's made up 8% of the market.

Edit: 8% of the foreign buyers

saxnix said:

Interesting article here, about the breakdown of foreign sales in Vegas in May. Looks like Australian's made up 8% of the market.

Edit: 8% of the foreign buyers

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What is even more interesting is the fact that this kind of breakdown on who is buying what is publicly and easily available. Bit of a contrast to Australia.

Gets better... or worse...

News being out...

http://www.marketwatch.com/story/best-cities-to-invest-in-rental-homes-2011-07-11?pagenumber=1

Thought for the day...Rents/Vacancies

Just had someone ask me about vacancy rates in the US and thought this relevant as there is only one answer!

ONLY buy where a tenant wants to live – not where a house looks pretty! There are millions of vacant houses that are absolutely stunning out there... Don’t be fooled....Simple, simple... are these houses walking distance to schools, shops and transport? Are the neighborhoods somewhere you would WANT to live? If the answer is no, the likelihood is you can’t find a tenant – if the answer is yes and you can’t find a tenant your asking rent is too high. There is no other secret a house should be occupied and not vacant – at $1k a month in rent, every week is throwing $250 out the window. Reduce the rent, get a tenant in and just make sure they love it and you increase your rent each year!

ALWAYS calculate what your rent will be BEFORE you go into a project – and by rent will be – I mean 10% less than the going rent for a similarly stunningly done up house – if you can’t make it on those numbers, why would you buy? Rule 101 – Call people with houses to rent in that area and see if they will offer a rental discount – if the answer is yes, work on the discounted numbers....and be VERY suspicious of buying there. That was how I eliminated half of the cities I had been prospecting to invest in.

Thus thought this might be a timely reminder.......bottom line on vacancy rates ... how greedy do you want to be? No matter where you are in the states you should be looking at double digit yields - the moral of the story is - reduce your rents! Supply and demand curve. Reduce each week by $20 until your property rents.....

That's the golden rule of any property investment - whether here or in any other continent