US Property Investing Strategies - US REAL ESTATE TV


Uploaded by USRealEstateTV on 19.01.2012

Transcript:
So, there’s really 3 types of stocks that you’re looking at when you really go into
the US market. The first is when you’re buying auction stocks, now we’re talking
about post foot foreclosures here, vacant stock and actually turn key properties. So,
let’s look at auction stock first. So, effectively with our auction stock, we’re actually purchasing
these direct from the lenders, so we call these real estate owned properties that we
talked about earlier. Now, you can negotiate but you’ve got to remember that this is
a slightly more competitive market so don’t confuse that fact that there are a lot of
foreclosure with the issue that it’s not competitive. The good properties will still
have competition around them. It’s the ones that are selling for, you know, prices that
nobody wants to touch or that really are in undesirable neighborhoods; they’re the ones
that sit on the markets for a long time. What you want to do is find contact that has influence
with the banks and the lenders who can help you negotiate a good deal. When we look at
auction stock, you got to remember you’re buying an as is condition and I mentioned
this earlier, so that means that whatever the property, whatever the state the property
is in the day that you settle, that’s how you take it. That means that there are more
work and time pressures involved and obviously it can be a little bit stressful and emotional
because you’re dealing in a sort of a precious situation. When we talk about vacant stock,
what we’re talking about is stock that you’re actually buying from someone who has actually
secured that property at auction. So, it’s either one of these real estate agents we
talked about who are selling them on behalf of the banks or they pay and actually purchase
the stock and you’re buying them as investors. The sorts of relationships that these guys
that are selling these properties have with lenders is really important because it will
determine sort of how flexible and negotiable they’re prepared to be and whether or not
they send them the premium stock. Even if you’re buying stock which is vacant you
still need to do your homework. Just, you know, in terms of the spectrum, you’ve got
your option stock, your vacant stock and your turn key but really you still need to do your
own due diligence on a particular property. Now, tenanted is also what I’m calling turn
key. Now, turn key simple means that the house has been bought, it’s been fully renovated
and it has actually been tenanted. Now the biggest advantage for us as Australian investors
with this kind of property is that we’re collecting in from day 1. It’s the simplest
and lowest risk method of buying property in the US from my perspective simply because
you don’t have to get involve in organizing contractors, someone’s already done all
the work as far as the due diligence, in terms of making sure that there’s no prior debt
and so forth, and you’re really just coming in and buying the finish product. Once again
I would say that even with tenanted stock, you still need to do your due diligence, so
really all that it means is that someone’s made it a bit easier for you. I would also
be saying what is the method of actually finding the tenant that that person’s gone through.
You don’t want them to have put in any joe blogs that’s going to, you know, trash the
house or maybe he’s not going to pay the rent on time. So, you want to asses how rarest
the method for screening the tenant that was used. Guarantees over workmanship, especially
if there’s been any kind of significant rehab, I’ll be looking to say well, what
sort of guarantees are you going to give me over the workmanship? The bottom line is that
your choice of property is going to be driven by what your personal preferences are, how
much time you’ve got available to research the market, what sort of volume you anticipate
buying, your strategy, your personality and how hands on you want to be as well as your
risk profile. So, all those things will influence which kind of stock you might be attracted
to. So, let’s actually talk about how we are going to asses these properties now. So,
we’ve already got a sense of the fact that we should be assessing these properties in
conjunction with the feasibility. So the sorts of people who can really help you and be part
of your team are people like local agents, property wholesalers and for those of you
who do have family or friends in the US, you can make use of those guys as well. It’s
my view that multiple opinions are always the best. Now, what I’d say to you guys
is try and get help with the local researchers as much as possible and you know, I keep coming
back to this, but you really must corroborate everything you hear. You can’t take a person’s
word for it in terms of what’s happening for that property. Look for agreement on the
suburbs or streets that you’re looking at, you know, do other people agree that that’s
a good part or place to be investing. Now, just remember that pretty doesn’t equal
good investment and I will keep hammering that as well. The aesthetics of a property
are important but that shouldn’t be your final decision maker. Don’t get emotional
about the purchase. If for whatever reason that deal slips away, then just move on. Trust
warning. So, if someone gives you some kind of red flag or warning about a property, I’ll
be taking it very seriously and looking further into it. I think the thing to bear in mind
is streets and suburbs can have the good ends and not so good ends, they can have good properties
and not so good properties, so you really want to make sure that when you are looking
at a particular city that you take all of that into account. Now one of the things that
I found really useful is the use of wall maps, so, if you can get a hold on the wall map
and you can certainly buy these off the internet, put it up for the city or region that you’re
looking at and just start marking at the areas that interests you and maybe even grading
them like do not touches and you know, excellent suburbs. Vacancy rates, so we’ve already
talked about this a little. We want to know do people actually want to live there, so
we’re looking for areas with a little to know vacancies. You know, this whole concept
that we talked about, in some of those cities where they have been really badly affected
in terms of property prices, but where the rental market has hardly tipped at all, they’re
the sorts of variants that we want to be looking at. We also quite like areas where the government
housing scheme is very strong, as we said already this is absolutely brilliant for investors
because it means that you’re going to get guaranteed income and you’ve got a larger
poll of people to rent to. �