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Help! Buying in the US?

Discussion in 'North America Real Estate' started by PMBLUE57, Jan 15, 2008.

  1. PMBLUE57

    PMBLUE57 New Member

    I’m looking to take advantage of the weak dollar and falling house prices in the US.

    I live in the UK and I don’t own any property anywhere, just rent. And as I don’t have a pension I really need to sort some kind of investment out for my future.

    I’m hoping that I can find a company that will help me find, buy and let a place (one company does all) in maybe Florida (open to suggestions).

    I’ve never done this before so any advice or contacts would be much appreciated! PLEASE!
  2. Hates Slimy

    Hates Slimy New Member

    Choose Who You Invest With Very Wisely...

    I invested in Florida approx 2 years go along with approx 300 other UK and Irish investors...
    Not a pretty picture....
    Some of the so called people in the know here in the UK need to go back to school...
    We are now embarking on a multi million dollar Law suit...
    We will be setting up a thread in the next days and you would be well advised to check it out especially in respect to who claims to know what they are doing...
    Feel free to e-mail me over next days/weeks for link...
    There are a lot of Sharks out in Florida and more in UK who are operating in a non regulated industry...
    We have learned some very valuable lessons here...
    The UK company at the head of our investment was
    "SFP Global"
    Major players in that company were
    "Elysa Smith" and "Jim Francis"
    Just Google the above and do your own homework.
    The Jury is still out on the above persons...
    There are a number of other UK Introducers involved...
    You will need to add them to your
    "Avoid at all costs List"
    The investment has turned out to be a complete mess....
    It had all the hall markings of a Scam from the start but greed can seriously cloud your vision...
    Watch this space....
    Best of luck on your endeavors in US...

    My tip of the day....
    Better to learn from other peoples mistakes than your own....
    Obvious really...
  3. oregon woodsmoke

    oregon woodsmoke New Member

    My suggestion is that you find what town you wish to invest in and contact a local real estate office. Forget about hiring a super service to do it all for you and you take more control over the purchase.

    A real estate agent can help you find a place to get a mortgage, but you want a property management company to manage your purchase, not a real estate agent.

    You should interview real estate agents and property management companies, just as you would any other employee.

    Personally, I am not too fond of Florida and all the humidity, bugs, alligators, and hurricanes and I am always a bit puzzled as to why the British are so attracted to it.

    However, if you want Florida, the prices in Florida have taken a big drop, so it is a good time to be looking to buy something in Florida and to get a good bargain. If you find something you want to buy, offer them a lot less than they are asking and negotiate from there.

    I see that prices in Las Vegas, Nevada, have taken a huge drop, so that is a place worth looking at in hopes of getting a bargain in a place where there is always going to be housing demand.

    In the current market, I suggest that you stay away from pre-construction. Buy a place that is completely finished, so you can see exactly what you are getting.

    San Diego, California, is a lot nicer place to live than anywhere in Florida. The weather is 1000 times better. Prices in San Diego have taken a large drop, so it is time to start keeping a watch on that market.

    I am a big fan of investing in my own home state, Oregon. It's always been a healthy real estate market and a desirable place to live. Prices have not dropped, yet, but I am starting to see the occassional nice place at a decent price.

    Seattle, Washington, is a very good place to invest (and there are direct flights from London to Seattle). Prices have not dropped. They have just continued to go up.
  4. PMBLUE57

    PMBLUE57 New Member

    Sounds like your going through exactly what i'm afraid of!

    The impression i'm getting at the moment is there are no easy routes and that it's best that i get off my ar*e and do it myself!

    Thanks for the advice, i hope you resolve your problems!
  5. PMBLUE57

    PMBLUE57 New Member

    The reason for picking Florida is excatly what you have just said, British holiday makers flock there for some reason. Letting a property out in Florida seems to be more reliable than most places. However, Vegas is becoming more and more apealing!

    I read on one of your previous threads posted on this site about buying in Vegas. Apparently you don't buy apartments, they are condos! What are the tourists renting when they go to Vegas, houses, appartments, condos, etc...
  6. oregon woodsmoke

    oregon woodsmoke New Member

    I am sorry, but Las Vegas is a very long distance from where I live. I only invest where I can keep an eye on my properties by myself.

    If you want to real truth about what vacationers are renting, contact a couple of agencies that manage vacation rentals and ask them what the demand is.

    I know what they want locally: ski lodges, and large houses for a large number of people for big get-togethers. That information is probably useless for Las Vegas where you have adifferent type of vacationer who is there for a different reason.

    Las Vegas is chock full of hotels that offer special discounted rates and make their money by the gambling their guests do in the casino.

    The only thing that I would be looking for to use as a vacation rental, would be fairly close to the casinos and golf courses, and access to a swimming pool. There are a lot of new houses in Las Veags that are actually 20-30 miles away from the action.

    Las Veags has sprawl. There is an unlimted amount of land available and as prices went up, the builders just moved further out. Vacationers are going to want to be close to the action.

    The agencies that manage vacation rentals and short lets charge a very high fee. It is a great deal of work. Each unit must be checked for damage and cleaned between guesrs. If that is done once a week, there is a lot of labor involved, and you have to pay for that.

    My suggestion is to take a week's vaction and fly to Las Vegas. Have a real estate agent lined up to show you properties while you are there. Then you know what the area is like and what the real estate looks like. You can talk to property manangers and rental agencies.

    On the Florida thing, are you using an agency that is located in Britain that manages the properties for British tourists?

    The trouble with just paying one ageny to do everything, find the property, manage it, and no trouble to you, is that they are perfectly set up to take advantage of you. You have no idea what it should cost or how it should be managed. Maybe they will be good and take care of you, or maybe they will milk your pocketbook for all it is worth--- and you won't know the difference.

    Real estate is a lot of money. It's too much money to be casual about it.
  7. DC

    DC Member

    First relax. Stay calm.

    Second Florida, we have properties eg. one on the front page of our website for 109.000 US dollars down from 254.000 US dollars from 2 years ago.

    It is wow. 3 bed, 2 bath, cape coral, nice area.

    Ok, now the financials.

    Weak dollar or not.
    1. Government taxes per year. Approx 3000
    2. Hurricane insurance 2500 per year.
    3. Mortgage repayments, if you borrow 100.000k US at 5.5% say 600 per month. Depending if you borrow interest only or capital repayment.
    4. Next non resident buyer 70% to 80%, so you going to have to put down a 20 to 30% deposit.

    Ok the long and short of it, the numbers dont add up.

    Right you rent in your country. Why. Are you looking for yourself to retire. Or what are you doing. If you are british you can not retire in the US. Unless you are rich or are married to an american, which I guess you are neither.

    Weak dollar. Fair enough, but dont waste your money, the numbers dont add up. If you are buying for your pension fund and hoping in 2 years it goes up, you can do that, but what happens if it does not?

    Can you afford the mortgage payments, what happens if you get no renters.

    Running before you walk, you would do better to buy in the uk.
  8. DC

    DC Member

    Ps. There is a glut of rental properties in Florida anywhere.

    Lesson 1.
    95% of experienced real estate buyers dont go for the tourist market. They go for the local market, where people work, pay bills and need places to live.
    According to London School of Economics.
  9. PMBLUE57

    PMBLUE57 New Member

    OK! That's fare bit of information in one hit! Now i'm really confused!
    I don’t intend to retire to the US. I plan on buying property so that in 30 years time I will have something that has increased in value so that I will have an income from rent or sell for a lump sum.
    The reason I’m looking into the US and not the UK is that historically the houses prices and the dollar are low at the moment where as the UK is at it’s highest!
    I’m familiar with the investment theory and correct me if I’m wrong but any investment has an element of risk. Also you never buy when the price is high!
    It’s interesting that you say long term leasing is what the agencies are looking for. I guess they charge more for tourists but you don’t get the guarantee of full time occupancy!
    All I’m interested in earning just enough to pay the mortgage! The return comes when I sell in 30 years time!
  10. DC

    DC Member

    Risk Reward

    Your right about some things.

    1. Buy low sell high.
    2. Pound is high versus dollar (not historically high by the way, in the old days, the pound used to buy 7 dollars!, but in recent times it is pretty high)
    3. Looking where you get value.

    That is good investment strategy.
    Now the hard bit.
    Balancing rental income to mortgage.
    Knowing tax policies of respective countries for capital gains, inheritance (unfortunately if you dont make it before you sell for your loved ones).

    If you went US road, we have products from very cheap, but I dont think the rent covers all the costs. Actually it does not. So though cheap, the numbers dont stack up. Government taxes are pretty high for property owners. Insurances are high.

    How much money do you have to invest?

  11. PMBLUE57

    PMBLUE57 New Member

    I have £10k to invest!

    The one thing i'm not willing to do is invest this into a deal that wont pay for it self.

    If i have to pay a monthly top up then it defeats the object of the excersice!

    Don't you agree?
  12. DC

    DC Member

    Ok, 10k is still alot of money. Sterling.
    With 10k, you need something that gives you a rental yield.
    (or 20k US dollars), but for non residents, you will need about 30% to put down.

    I think your financials are out for the US.

    The best market for you, or other people at this moment in time in my opinion is Egypt.

    Why. It came top of rental yields when you take out taxes and inflation. The top 4 were as follows.
    1. Egypt
    2. Indonesia
    3. Philippines
    4. Panama

    The US was not in sight.
    With 10k you will have to take a mortgage, or you can do something with a friend.
    Also, you should let it to expat people, via the internet, friends and family and work colleagues, to get 100 pounds x 24 times a year *100 pounds a week. Will give you a 10% yield on 20k apartment.

    It wont make you rich, but it is a start. Alternatively you can invest in something where you live and stop paying rent. I can ask to see if anything can be brought in the US with 10k down but I dont think the rent will pay the mortgage.

    Another alternative is to find another investment you are more comfortable with and invest there. ie. buying something from the US and selling in Europe.
  13. DC

    DC Member

    eg. Cars!, for the same product in Europe, it is at the moment 50% cheaper in the US. Even with shipping and taxes you still save 30% for the same product. Only worth doing on vehicles over 20k-30k, and you need a buyer tied up the other end.
  14. PMBLUE57

    PMBLUE57 New Member

    Intersting you mention cars! I'm involved in motorcyle racing and the one thing i was planning on doing was to import an RV! Motorcyles i would be interested in! But that's another story.

    I'm a bit reluctant in buying property from places like Egypt. My folks have just sold their house here in the UK and have bought a villa in Spain and a Yacht in Greece!
    The price of the property in Spain seems to have stalled and i get the feeling that investing on this side of the world has been saturated leaving very little opportunity.
    The Yacht is to be chartered in the summer, so until then I won't know if it is a good investment.
  15. DC

    DC Member

    Yes, find your niche and exploit it.

    Egypt fair enough, it is not for everyone.

    Spain is a good market for distressed sales, and for retirement but not for investment in my opinion.

    There are opportunities in property like all investments, buy low, sell high, property you can make cash from through rentals and get cash through mortgages, so it is an interesting investment vehicle. And for most people the saying safe as houses, is true, well in the term in the uk, which has been on a bull market for years.

    Remember how long it took you to save the 10k, think as long and hard as it took you to make it to spend it.
  16. neustria

    neustria New Member

    Hello Blue,

    There is much sound advice which has already been given here I think.

    To my mind, the market that one understands best is always going to be the one where one lives. Maybe repossessions could be an option - you could sit in on a couple of auctions, see how they work, and by visiting property in the area you can get a good idea of the going prices. Then, when you see what is possible, you can aim for that.

    The US can be enticing but unless you plan to go live there, and get the feel of the place, I can't see that for you either. If you plan to buy rental property (on the eve of a possible recession???) you will also have management fees to deal with, on top of everything else.

    Perhaps one solution would be to opt for undevelopped property in an area which is moving at a fast pace. I recently invested in Costa Rica because a person in whom I have total faith (a family member) strongly advised that I do so. The country is very stable and they are very strict about planning because they are keen to preserve their natural heritage. If you would like to follow this up, I can give you the email address and telephone number of the person who has been advising me, and who will be glad to share the information that she knows about her area with you. Transactions take place in US dollars so that means that currency instability (other than that affecting the dollar itself) is not a problem. With the recent equity market turmoil people just might be afraid of the stock market for awhile and this could bode well for more insulated investments such as these. Let me know via the Private Messaging (PM) system on this Forum if you would like contact information.

    Good hunting,

  17. Investy

    Investy Senior Member

    Remember trying to get a foreign mortgage is usually very difficult and often they work on 40% of you take home pay being able to cover all your credit outgoings to include the new mortgage.

    With £10k I also think Egypt. The trick as ever is to buy from a large reputable developer. Morocco is my preferred area (3 hour flight, year round mega developments)but I think you would need a larger deposit than £10,000
  18. PMBLUE57

    PMBLUE57 New Member

    Yeah! I've noticed that. The only reason that I can think of is they buy them as a holiday home and accept that it will cost them £*** and anything they get back is a bonus.

    Personally, I wouldn’t invest for that reason.

    I certainly would invest unless the incomings covered the out goings.

    I like the idea of buying in the UK! But I’m a first time buyer for a reason! It’s because I’ve never been able to afford a place here.

    I like the idea of repos! Never really looked into it! Any ideas for contacts?
  19. I live and work and Florida, Orlando to be exact. I can say certain areas are better buys than other. Goldberg Global had a valid point about tourists. Short terms rental near Kissimee and Davenport are not what many believe them to be. They are not occupied much of the year. The rental agents that do short term rentals(short term meaning under 7 months, only certain counties are permitted to rent properties by the week or month) charge a large fee. Communities designed as an all in one charge a basic fee plus a % of month income. This equates to you receiving 50% of the income. Then the short term rentals are required to pay taxes as if they were a hotel or resort. Properties in other areas are better. The east side of Orlando has an abundant amount of business coming to the area and this brings people. The medical school at the University of Central Florida is opening in about 1 year, Biotech is coming as well, Florida Hospital is expanding in the area, Lockheed is located here... I could go on and on about how that area is superior to Four Corners/Disney area.

    If you would like help or simply have question, I would be more than happy to help message me
  20. Mikeyv

    Mikeyv New Member

    Hi, I would like to agree with strategicgroup realty the rental agents take a lumpy sum of money from your rental return and davenport/kissimmee has a huge amount of rental properties so as ever competition drives down prices,

    I think you should look at Universal Boulevard dubbed "The new downtown Orlando" also opposite the worlds 2nd largest convention centre (with plans to be the worlds largest) is Vista Cay which has excellent potential to target convention goers in an area of town where rental property is scarce!!

    I recommend you check it out, better to look at all your options before you sign on the dotted line.
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