So you want to buy a US property?

Let’s look at the due diligence you should do as a novice or experienced investor, this will lead into what steps you need to take to ensure you are getting the best bang for your buck also.
You can also assess current investments with these tips also just to ensure peace of mind within your current portfolio.
Acquisition
1. Is the home on the open market when offered to you?
You can tell this quite easily by punching in the address here www.zillow.com
2. Is it a private sale or bank foreclosure?
Again this information will be on the above link
If it is a private sale it can be listed for any price the seller wants to list it for, here is an example.
Seller secures a property from the bank for 13k and relists it at 65k, that is legal and unless you know how to read the data on www.zillow.com you could lose a heap of your money fast, I hear these stories all the time.
3. If it is a bank foreclosure you are actually buying it at the lowest price possible if you are dealing direct with the bank.
4. If it not listed on Zillow for sale there will still be data on the property and you can see the past transactions which is public records.
5. Just to be sure don’t accept the estimated values and area stats as gospel because they are 2-3 months behind and run all the foreclosure sales into account when estimating values and are well off the mark in most cases, just use it a guide.
So hopefully that has kept you clear of some transactions!
Purchase
Buying a turnkey property has some positives and some drawbacks, let me explain.
In most cases 99.99% we as brokers are offered significant commissions 8% – 10% (5k to 15k) or more to offload US overpriced properties to investors. How do I know this? I get approached all the time myself, find me a fool sell them the dream and rake in an additional commission on top of my upfront fee. YES ALL THE TIME!
They call themselves wholesalers or act as a secondary broker based in the USA there are at least 30 that have approached me directly which I have declined them all, many of whom are working with almost every company in Australia marketing US deals left and right.
So now that is out of the way be very careful buying a ready-made investment package from any company at any time and keep your emotions out of the deal, don’t rush anything until you have complete your homework.
After Purchase
Quick vacancy of your new investment lower rental than quoted and poor renovation works if any at all are common practice.
Flick and forget, is the general way US brokers work I should know I hear the stories all the time.
Read the fine print if things go south is the company you purchased the property through here in Australia really care once he has your cash if a tenant leaves? NO in the fine print all obligations got to you dealing with it directly with the management company who do give a damn and that’s if there was even a tenant in it in the first place. I have heard and seen first-hand driving past some of these homes for investors in the US to see them still boarded up. The seller is paying the rent so he can secure another deal before exposing the truth as we are so far away this happens.
Recently an investor contacted me she had purchased 3 homes with 2 other companies before meeting me in Michigan to buy her first property with Cash Flow Gold, just catch up to her recently she is try to offload the 3 homes Florida/ Phoenix as they are all vacant and the Phoenix home is in such a bad location she doesn’t know what she will do.
Make the person you are working with in Australia take a role in ensuring what they are selling is actually what they are selling and back it up themselves and not shift it to the US after they have your money!

Finance
In most cases, not all but quite a few where finance is an option the home is so overpriced you have paid for it outright just in you 40% or 60% deposit. FACT!

Additional links to assist you in your homework when buying property in the USA
www.zillow

http://www.finestexpert.com/Home/Index

www.trulia.com
http://www.nationalrelocation.com/ Just type in the suburb or city here to drill down on area statistics
I have no Doubt this article will ruffle a few feathers however that may bring more attention to it than they need so it may stay on the down low we shall see.

Jason Simpson
www.cashflowgold.com.au
Working for the investor everyday!
Quality – Location – Results – Success

The Great Australian Rip Off

Why is this industry not regulated, it is a blight on our law makers that this can go on for as long as it has.

Selling US property to Australians at well over market prices and getting kick backs is common practice and you the investor wear the costs.

I created my company to overcome these issues yet still see these sharks thriving in this market place, without concern for outcomes or putting the investor first just the need for a quick buck and long disclaimers when you can find them.

Let’s get down to brass tacks here and let me explain.
The full disclosed address of a property allows you the investor to source critical additional data such as:-
Last sold price and date
History of sales
Taxes / rates
Who owned the property
Other relevant data, get this information and do your homework!

Without the full address you are being screwed 100%, this information which should be available up front before ever taking the next step and contacting the company, by not disclosing the address upfront they are hiding siginificant profits.

Don’t take the numbers offered on the home as gospel check past data as anyone can list a home for whatever they like for sale on the web and it will transfer to zillow, trulia etc. It is their purchase price that you want to look for not the selling price today.

A property purchased for 20K can be relisted for 69k easily and happens all the time, check the sales history!

Buying wholesale is bullshit! I have been approached by so-called wholesalers and it is just another word to use instead of the truth (money makers). These guys want to offload overpriced property that is the fact 100%.

In my role at Cash Flow Gold I get approached to do this all the time, find me some suckers to buy these great looking “wholesale” homes and there is 8k+ in it for you….yes all the time. I got taken myself as an investor 3 years ago like this and that’s why we have CFG today.

Is it no wonder that one company will openly say there is no service fee to be paid….hello how do you think they keep afloat they have to get paid from somewhere don’t they? so why not be honest and charge a reasonable service fee, strip back the 8k in commissions and do the right thing?

Why can’t these guys be exposed? Well thanks to a great forum like http://www.propertyinvesting.com/forums it is becoming apparent who to watch out for, however there are so many mum and dad investors out there who don’t read these posts and get caught out.

Sprukers
Now don’t get me even started on these big groups going around calling themselves these great names claiming to have the answers and provide the rip off on a grand scale, you know who I am talking about.
I have approached 2 of these so-called more reputable companies (I thought) providing a wide range of investment options to speak in regards to buying directly from the banks and was refused because they must control all of the cash, not the investor and if there wasn’t a significant kickback in it go away. Well who pays for those kick backs?

Yes you do in the cost of the property! I walked away!

Note!

Get the full address, A 10k home isn’t a bargain until you have done your homework just the same as a 220K home isn’t until the homework is completed. You maintain control!

http://www.zillow.com

http://www.trulia.com

http://www.nationalrelocation.com

http://www.finestexpert.com

These links should be provided by the seller on every property if they have nothing to hide and even more so if it is a so-called wholesale deal, showing you just how much savings they can pass onto you as a buyer.

Renovations / Rehab

Let’s look at this for a quick minute as this is another area significant profit can be hidden too. You need to know what condition the seller receiver the property in, why? Well a minimum renovation / rehab can cost as little as 2k and a major renovation should not exceed 18K and for this we are talking about a new roof and extensive repairs and all this should be shown to you with evidence such as photo’s but preferably video where possible before and after so you can see the work completed. Ensure you have certificates of compliance too.

All I would like to see is that investors start getting a fair deal and these sharks who promote “wholesale” and “no service fees” get seen for what they really are, sharks!

Put this to the test with every company you can find you will be surprised!

Thank you for your time and reading my rant.

Jason Simpson
Cash Flow Gold

You can still make a living investing real estate responsibly

Press Release

Jason Simpson decided after completing his long term dream of building his own home that he also wanted to build an ideal lifestyle. Moving to a coastal town of Candelo in NSW he had the freedom to spend time with his family and enjoy a hobby farm.
When it came to creating an income to provide for his family, Jason knew that the 40+ hour week wasn’t for him. This mindset of a sea-change is not that uncommon but creating a passive income responsibly is something that many of us find hard to envisage especially in Australia with rising property prices.
Jason undertook self education in investment property. He started this process in Australia and then New Zealand. During Jason’s investigation of these markets he discovered that most companies (particularly in Australia), were a large risk for property investors. These property investment advisors insisted on a large up-front fees with often loaded commissions from other vendors. This questionable sales behaviour, combined with the global financial crisis made Australia and NZ not very attractive property investors. After over 6 months of researching and reading books and joining the Rich Dad Poor Dad coaching program, Jason learnt about that the US real estate market was prime for investment.
Thus Jason spent 9 months studying the property market and travelled extensively to the US and by doing the leg work and established a tour that would give others the experience to invest in the US property market responsibly.
Jason discovered that Michigan was the place to invest for the following reasons:
* Biggest fall in property prices anywhere / massive upside potential
* (New industry flocking to the state to take advantage of the massive tax breaks Michigan has to offer)
* * Highest quality homes buy a country mile Brick 3-4 bedroom
* * High rental demand for the right home in the right location
* * Low capital outlay / High returns / PASSIVE INCOME

Jason shows an example of how you can get great deals in the US are as follows:
Homes displayed online www.cashflowgold.com.au 12 months ago market value ranged from $90K – $200K are now on the market for $9K to $20K. For more examples visit Jason’s YouTube page http://www.youtube.com/user/CashFlowGold
Jason is taking people on a tour of US properties like the one describe above in August. For information on Jason’s latest tour in visit http://detroitproperty.wordpress.com/