QUOTE (ThomasBeyer @ Dec 21 2009, 03:25 PM) elaborate please ..
what parts of the US ? FL ? AZ ? TX ? What type of properties ? How to intend to exit ? Who does property management / rent collection / the odd eviction ?
ugly or nice assets ?
I prefer not to mention the location. I apologize for this. I`m competing with a lot of Canadians (as well as Australians, Japanese and Germans) already and I don`t have anywhere near the same amount of cash as others who are buying down here.
As you know, there are a lot of type of properties, but I like condo communities. Typically (in Toronto for example) condos don`t cash flow at all because of their extremely high per unit purchase price, but currently in the U.S. the price of many condos have fallen to sub-$50K and have become extremely competitive to apartment building units.
Unlike a 12 unit apartment building where exiting requires me to sell it all or nothing, I can exit with a dozen condo units by selling as many condos as I feel I want to sell - 2, 6 or all 12 units. In the end, if I want to make some of my future snowbird trips tax deductable, I can sell everything and just leave 1 unit there while I stay at a nice hotel. There are obviously other options but that`s neither here nor there.
Long story short, I like condos, but there are many types of properties for sale for whatever a person decides to focus on.
With regards to property management there are a number companies in the area that charge $x flat fee or x% of gross rent, whichever is higher. They also have schedules outlining a variety of additional services depending on what you want them to do (find tenants, screening, evictions, repairs, etc.) You can tailor the invoice to what you want covered and keep an appropriate USD reserve account to fund it.
It`s important to find a property management company that has an expertise in what you`re looking to buy - condo communities, apartment buildings, commercial, etc. Not only are they very familiar with how to look after your particular type of property, they have strong networks for finding tenants for that type of property. And if you`re looking to sell, they have a vast network of buyers of similar property.
The condo communities that I invest in are nice. If I wanted to cash flow better I could find sketchy $10K 1 bed 1 bath units, but they would be in undesirable parts of town. If an investor wants a location that has low property crime, low violent crime, near good schools, shopping, public transportation and/or easy access to highways they will need to pay more than double (ie $25K for a 1 bed 1 bath and $45K for a 2 bedroom 2 bath). The current community that I am investing in has all those characteristics and the additional benefit of being a stones throw from the police academy training center.
Although it is intuitively obvious, keep in mind that there is absolutely no way whatsoever that these condos would cash flow in `normal` times. Like the example I linked a few posts above, a condo priced at $167K would never cash flow, but at $37K it would be an entirely different story and that is what`s happening now...
PS: And as for the Canadian mentioned in the same article who purchased 640 condo units (equivalent to 1 massive building or 2 smaller ones) at $59K a unit; he`s going to make a sh*t ton of money in 10 years. IMO of course.
