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Presentation. Purchasing US Property. Disclaimer. To date, we have purchased two properties (sfr’s) in the USA.

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Presentation Transcript
presentation

Presentation

Purchasing US Property

disclaimer
Disclaimer
  • To date, we have purchased two properties (sfr’s) in the USA.
  • We undertook extensive research prior to purchasing and are happy to share our sources with you however you do need to do your own due diligence especially verification from a variety of reliable and reputable sources.
  • We do not accept any responsibility or liability for the information contained in this presentation.
  • The research conducted was for our own investment purposes.
presentation outline
Presentation Outline
  • Why the US
  • Due Diligence
  • Preliminary Research
  • Why Texas
  • GPD Texas Property Tour
  • Tips & Traps.
why the us
Why the US?
  • In 2008, local banks would not lend to us as our DSR (Debt Servicing Ratio) was not satisfactory enough,
  • ie. asset rich, income poor
  • ??? Needed more cash flow
  • Attended the 2008 Brisbane Property Investment Expo to find out about “positive cash flow property”
  • Purchased several Margaret Lomas books on the subject.
  • Also noticed one of the stands promoting “buying positive cash flow property in the US”
  • Prices looked too good to be true!!
12300 brookglade cir houston
12300 Brookglade Cir., Houston
  • $74,000 USD 3 Bed, 2.1 bath
houston property searches
Houston Property Searches
  • Newspaper - Houston Chronicle
  • www.chron.com
  • Real Estate Agent Listings
  • www.har.com (Houston)
  • www.realtor.com
  • Property comparisons (values, location – cul de sac, easy access to main roads)
  • www.realquest.com
preliminary research
Preliminary Research
  • Books – US related: Mortgage-Free For Life: Secrets Banks & Lenders Don’t Want You to Know! Richard Weathington & Beth M. Ley (BL Publications, USA) 2007
  • Getting the terminology right before doing internet search
  • Internet – which US states
  • Check out: www.fhfa.gov (federal housing)
  • Look for state HPI (housing price index) summary
investing differences
Australia

LOC/Interest Only

25-30 years

Everything

All locations

Solicitors

Company + family trust

Rates

USA

P & I

15 years

Above $200K

Local area

Title Co’s

LLC (foreign nationals)

Municipal taxes

Investing Differences
  • Finance
  • Length
  • Brokers
  • Banks
  • Legals
  • Asset Structure
  • Taxes
slide10

US Housing Price Index

  • Source: www.fhfa.gov
slide12

Clear

  • Red
  • Source: www.cyberhomes.com
why texas
Why Texas?
  • Employment
    • Oil
    • Medical research
    • Military
    • NASA
  • 2 of top 10 cities in US (Dallas & Houston)
  • 2nd largest state in US (population & land size)
  • Northern migration
  • Stable house prices
our focus
Our Focus
  • Property Type:
    • sfr’s (single family residences)
  • Strategy:
    • Start off small, get foot in door
    • 1 positive cash flow property
  • Establish strategic relationships
    • Banks
    • Property managers
    • Title Companies
    • Agents, developers, builders
asset protection
Asset Protection
  • US LLC
    • Foreign Nationals can set up LLC’s.
    • IRS taxes at local rates
    • Some US banks won’t lend to LLC’s for property
    • Able to set up LLC online
  • US bank accounts
    • Does require some local assistance
    • LLC is the applicant name
    • EIN is the ITIN.
property broker
Property Broker
  • Finding a potential property easy part
  • Getting:
    • finance (reasonable interest rate & terms)
    • conveyancer (title company)
    • property manager (reputable)
  • thought could be much more difficult
  • Searched for an Australian based broker specialising in US property who could offer this:
  • Global Property Deals
    • Westan Johnson & Frank Stace.
global property deals
Global Property Deals
  • Preliminary discussions satisfactory
  • US market knowledge
  • Open to questions
  • Conduct regular investor tours to the US
  • Long term relationship development.
  • www.globalpropertydeals.com
dallas
Dallas
  • Tour start point
  • Meet fellow tour members/investors
  • Overview of tour
sherman
Sherman
  • Presentations
    • Economic Development
    • Title Transfers
    • Property Management
    • Local Investments.
austin
Austin
  • Night Stop-over
  • General Overview
san antonio
San Antonio
  • Presentations:
    • Foreclosures
    • Tax & Accounting Practices
    • Investment Structures
    • Investment Opportunities
  • City Tour.
houston
Houston
  • Presentations:
    • Foreclosures
    • Investment Opportunities
  • GPD Projects Tour
  • US Bank Account Set-up.
gpd property for sale
GPD Property For Sale
  • 120 Country View Circuit, Pottsboro
  • List Price: $114,000 USD
due diligence
Due Diligence
  • Online property appraisals
  • www.realquest.com
  • www.eppraisal.com (*)
  • www.realestate.com
  • www.realestate.aol.com (*)
  • www.coldwellbanker.com
  • County tax office
  • www.viewshermanhomes.com
slide28

Sherman Property Manager

  • Website: www.nor-texhomes.com
property management sherman
Property Management - Sherman
  • 5-K Property Management
  • Full Service
    • Leasing Agent
    • Rental Manager
  • Fees
    • New Tenants: 45% of 1st month’s rent
    • Management Fee: 9.5% of monthly rental
property taxes
Property Taxes
  • Property taxes will vary from locality to locality however they comprise a series of separate taxes:
    • City tax,
    • County tax,
    • School tax,
    • College tax,
    • Energy Service tax and
    • Hospital tax.
  • Usually this equates to about 3% of property’s rateable value.
  • Some areas also have Municipal (MUD) or Association taxes as well.
entity codes
Entity Codes
  • GRA (Grayson County)
  • JRC (Grayson College)
  • CSH (Sherman City)
  • SSH (Sherman School)
weighing up the deal
Weighing Up The Deal!!
  • What’s involved in weighing up the Deal?
  • Down payment (deposit) 20% (foreign nationals)
  • LLC setup $800 USD
  • Title Insurance $500 USD
  • Attorney/Title Office Fees $850 USD
  • Court Filing Fees $64 USD
  • Taxes 3% of property value
  • Property Management 9.5% of gross rent
  • Insurance 1.3% of property value
  • Brokers Fee (GPD) $2,500 USD
  • Rental Income $700 USD per month.
1313 east lamar st sherman
1313 East Lamar St, Sherman
  • So how would it stack up? (first 12 months)
  • $56,500 Sale Price (Final)
  • + $2,500 GPD Fee
  • + $1,350 Legals
  • + $1,306 Taxes (County)
  • + $702 Insurance (Hazard)
  • + $798 Property Management
  • -----------------------------------------------
  • $63,156 Total
1313 east lamar st sherman1
1313 East Lamar St, Sherman
  • $8,400 USD Rent ($700 USD per month)
  • Gross return
  • This equates to: 13.3% ($8,400/$63,156 x 100%)
  • Net return
  • $4,872 Loan repayment ($406 per month)
  • $3,528 Net return
  • This equates to: 5.59% ($3,528/$63,156 x 100%)
higher returns foreclosures
Higher Returns - Foreclosures
  • Website: www.myusaproperty.com.au
us interest rates
US Interest Rates
  • Bank Finance (May 2009)
  • 30% (foreign nationals)
  • 6.75% fixed for 3 years adjusting to wsjp + 1% each 3 year period thereafter with an interest rate floor of 6.75%
  • Vendor Finance (April 2009)
  • 20% (foreign nationals)
  • 7% (wsjp + 3%) fixed for a 15 year term.
us bank home loans
US Bank Home Loans
  • New Homes
  • Arrange with local banks in area only
  • Direct approach (internet search)
  • P&I (usual finance structure)
  • Line of Credit (HELOC) - home occupiers only
  • Existing Homes
  • Alternate Finance
    • Vendor finance quite popular.
funds transfers
Funds Transfers
  • Transferring funds (ie. deposits)
  • Use OzForex
  • www.ozforex.com.au
  • Division of Macquarie Bank
  • Appear to offer the best exchange rates and lowest fees.
gpd usa investors tour
GPD USA Investors Tour
  • 2010 - (Sun Sept 19 - Sat Sept 25)
  • 5 Cities - Texas - 6 nights
  • Dallas, Sherman, Austin, San Antonio, Houston
further information
Further Information
  • Go to:
  • http://www.paragon-marketing.org
  • To download:
    • Presentation powerpoint slides
    • Texas Economic Outlook
    • Sherman Overview
    • US LLC information.
thank you

Thank You

Any Questions!

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