Foreign Investor - How I turned $500K into $2M
Just thought I would provide an account of my journey since I started investing in US property market in 2011 and more recently Detroit. Perhaps this can provide some inspiration/feedback for any wannabe foreign investors, it can be done. If you can invest from overseas, you most certainly can do it from outer of state too.
I had plenty of people, family and friends give me at least 5 good reasons why I should not invest in the US market. But fortunately I ignored this and just continued doing my homework, flying over regularly to US and sorting out the best way to move forward to make it work for me.
At this time the US property market was a basket case, and I could see with the right systems in place I could buy cheap properties that would be cash flowing from day 1. I also thought how low could prices go, some States hit 70% drops, pretty scary stuff.
I started investing in Atlanta in 2011, when the market started rising, and pumped about $500,000 cash buying SFH at around $35,000-50,000 price range (each), these were 2500 sq ft homes, in South Atlanta, in the main distressed properties/foreclosures.
At this time financing was not an option for foreigners so all my properties were cash buys, however this has changed significantly. Today there are more financial options for foreigners.
As we know many markets have rebounded from when the market peaked/crashed in 2007? and Atlanta is no exception, these properties today are worth at least $200,000+ each.
So it really was not that hard, the rising market turned my $500,000 into over $2,000,000 USD
These homes today rent for approximately $1400-1500 per month. Rents have slowly risen in the last couple of years in Atlanta. But when I was buying rents were pretty much stagnant.
My Atlanta properties today generate an income of approximately $10,000 per month (net)
Fast forward today...........am playing in the Detroit market, seems to be many opportunities, whether I can repeat what I did in Atlanta.... only time will tell, fingers crossed:)
I have been purchasing a mix of C and B grade SFH using cash for now, on average generating around 15% net returns. I have a couple of properties that I will be flipping next year as some markets are appreciating nicely and I would like to bring capital back to the table, rinse and repeat. The idea is to have some cheaper properties that are cash flowing and some purely for flipping.
I have a lot to learn about this market, and it certainly is different from the Atlanta market.
Its been 12 months to date and I have now bedded 10 properties where I have sourced good property management, not the easiest thing to do, I believe for a foreigner/out of state investor if you get this right you are 80% there.
There are certain areas that I am targeting that are safe areas and have a mix of home owners/renters.
My idea at the moment is to continue increasing my cashflow which is now at around -
$15,000 per month
I am not foolish enough to believe its going to be all smooth sailing, hardly.... Detroit is a beast and I have had some unpleasant experiences, but persistence is something I can do.
I plan to revisit this thread in 12 months time and give you an update on my journey
Happy investing everyone
@Jay Hinrichs
Hi Jay
I’m Canadian, own 2 properties in Washington State free and clear...looking for someone who will work with me as a foreign buyer build a larger US portfolio
Would like to hear more about any opportunities you might suggest
Cheryl
(Vancouver)
@Marisa R.
Which lenders will work with foreign buyers with 30% down?...I already own 2 properties outright in Washington state...would like to build by US portfolio
Cheryl
(Vancouver)
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Originally posted by @Cheryl Lefaive:
@Jay Hinrichs
Hi Jay
I’m Canadian, own 2 properties in Washington State free and clear...looking for someone who will work with me as a foreign buyer build a larger US portfolio
Would like to hear more about any opportunities you might suggest
Cheryl
(Vancouver)
you can send me a pm not allowed to self promote on the open forums.. I love BC though I used own a home in Kelowna thats one of the best kept secrets in the entire northern hemisphere..
@Cheryl Lefaive sorry for the confusion - I was meaning in NZ, most investment properties have to be 40% down. I have my Greencard now so my brother and I are looking to partner together and partner up on deals in the US.
I only know about TN where I invest but I found a local bank for non resident aliens doing 30% down. Took a long time to find them but they seem to be able to make their own call on who they lend to. Might be worth chasing down the smaller players in your city.
Congratulations! Inspiring story!
I also bought in Atlanta after the crash - 2009, 2010 - for 10K and those properties are 150-200K now. I also bought adjoining parcels, so that I'd have assemblages when the time came.
I sold a few last year and bought other properties, that are close to upcoming development, waiting for that major appreciation.
Good luck in Detroit!
@Marisa R. Can I ask who is the attorney you have been using in the US? We are looking for a good, experience attorney in the US who have experience with foreign investors. Thanks!
Originally posted by @Marisa R.:
Originally posted by @Alexander Knowles:Awesome story! Where are you originally from? What visa status did you have and were you based in the U.S or did you do this from afar?
Thanks
I am From Australia, started researching US around 2011
Foreigners don't have restrictions when it comes to buying property in US, as long as you have the cash you can buy.
In Australia our country has restrictions on what foreigners can buy and cut off point on how much
Esta visa, which means you can stay in US on upto 3 months at one time
Amazing story, Marisa! I'm a US citizen living in New Zealand looking to do exactly what you've done! Would to hear your thoughts on:
1) What is the most important team member to find before you buy a property in the US from abroad? How did you get comfortable working with that person and building trust, and how long did that take?
2) How did you manage a rehab from abroad? Assuming most of your properties you never saw in person?
Originally posted by @Diogo Alves:
Originally posted by @Marisa R.:Originally posted by @Alexander Knowles:
Awesome story! Where are you originally from? What visa status did you have and were you based in the U.S or did you do this from afar?
Thanks
I am From Australia, started researching US around 2011
Foreigners don't have restrictions when it comes to buying property in US, as long as you have the cash you can buy.
In Australia our country has restrictions on what foreigners can buy and cut off point on how much
Esta visa, which means you can stay in US on upto 3 months at one time
Amazing story, Marisa! I'm a US citizen living in New Zealand looking to do exactly what you've done! Would to hear your thoughts on:
1) What is the most important team member to find before you buy a property in the US from abroad? How did you get comfortable working with that person and building trust, and how long did that take?
2) How did you manage a rehab from abroad? Assuming most of your properties you never saw in person?
Thanks
Amazing, ending up in NZ, nice part of the world
Yes, team is everything, networking with right people has helped.
Don't need to reinvent the wheel, just piggy back from successful investors
Timing market is also crucial, much easier to nake money when markets are rising which is what is happening currently in Detroit
Also Property management will make or break you from my experience
Management is everything in the USA!
Just thought I would provide an update on my thread and the progress
As I have mentioned I have been playing in the Detroit market.
Yes getting a lot of negativity from BP on this, but I am probably a sucker for punishment. Key is persistence and buying the right properties, at the right price.
I like to look at properties which have a higher owner occupier ratio than renters, this is one indicator but also pay attention to what is happening in terms of supply and demand.
To date I have purchased 10 SFH, all up including rehabs etc. at a cost of $417,000, this is now generating $95,400 gross income pa (22% gross return). Generating around 12% net income.
$7950 income per month gross/ $4000 net per month (Detroit)
$10,000 net income (Atlanta)
I am all about increasing income, appreciation is a bonus.
So what is happening in this market at the moment, this will give you an insight, some figures.
Originally posted by @Marisa R.:Just thought I would provide an update on my thread and the progress
As I have mentioned I have been playing in the Detroit market.
Yes getting a lot of negativity from BP on this, but I am probably a sucker for punishment. Key is persistence and buying the right properties, at the right price.
I like to look at properties which have a higher owner occupier ratio than renters, this is one indicator but also pay attention to what is happening in terms of supply and demand.
To date I have purchased 10 SFH, all up including rehabs etc. at a cost of $417,000, this is now generating $95,400 gross income pa (22% gross return). Generating around 12% net income.
$7950 income per month gross/ $4000 net per month (Detroit)
$10,000 net income (Atlanta)
I am all about increasing income, appreciation is a bonus.
So what is happening in this market at the moment, this will give you an insight, some figures.
Looks as though things are going pretty well! Always good to see an Aussie kicking ***.
I have always been interested in investing in the US market, especilly Detriot as far back as when the dollar was at parity, however being an undergrad student and tied up to a mortgage at the time meant I didn't have the spare cash at the time. Fast forward a number of years, I'm now living in the US and about to get a small lump sum from my employer so I am now beginning to look into buying here and Detroit is again the area that has my interest, especially given the volatility of the companies stock price.
How have you found investing here compared to Aus? What are some of the main differences that you have encountered? I get the impression that the chances of getting a shonky deal in the US is significantly higher than back hom.
Any advice for an Aussie trying to crack into the US market?
Keep up the good work!!
Originally posted by @Matthew DeBrincat:Originally posted by @Marisa R.:Just thought I would provide an update on my thread and the progress
As I have mentioned I have been playing in the Detroit market.
Yes getting a lot of negativity from BP on this, but I am probably a sucker for punishment. Key is persistence and buying the right properties, at the right price.
I like to look at properties which have a higher owner occupier ratio than renters, this is one indicator but also pay attention to what is happening in terms of supply and demand.
To date I have purchased 10 SFH, all up including rehabs etc. at a cost of $417,000, this is now generating $95,400 gross income pa (22% gross return). Generating around 12% net income.
$7950 income per month gross/ $4000 net per month (Detroit)
$10,000 net income (Atlanta)
I am all about increasing income, appreciation is a bonus.
So what is happening in this market at the moment, this will give you an insight, some figures.
Looks as though things are going pretty well! Always good to see an Aussie kicking ***.
I have always been interested in investing in the US market, especilly Detriot as far back as when the dollar was at parity, however being an undergrad student and tied up to a mortgage at the time meant I didn't have the spare cash at the time. Fast forward a number of years, I'm now living in the US and about to get a small lump sum from my employer so I am now beginning to look into buying here and Detroit is again the area that has my interest, especially given the volatility of the companies stock price.
How have you found investing here compared to Aus? What are some of the main differences that you have encountered? I get the impression that the chances of getting a shonky deal in the US is significantly higher than back hom.
Any advice for an Aussie trying to crack into the US market?
Keep up the good work!!
Thanks
Investing in US will have more challenges, however success will come down to networking and lots of research
In Oz was not only investing in my own State I was investing in any market that was rising
Timing is everything in my humble opinion
All the best
Hi Marisa,
Great post, thanks for sharing all this info.
How well are your investments in Detroit riding out the covid-19 storm? Have tenants stopped paying rent? Any other changes in the market?
A year ago you wrote:
"To date I have purchased 10 SFH, all up including rehabs etc. at a cost of $417,000, this is now generating $95,400 gross income pa (22% gross return). Generating around 12% net income.
$7950 income per month gross/ $4000 net per month (Detroit)"
Can you give us an update?
Originally posted by @Marisa R.:Originally posted by @Matthew DeBrincat:Originally posted by @Marisa R.:Just thought I would provide an update on my thread and the progress
As I have mentioned I have been playing in the Detroit market.
Yes getting a lot of negativity from BP on this, but I am probably a sucker for punishment. Key is persistence and buying the right properties, at the right price.
I like to look at properties which have a higher owner occupier ratio than renters, this is one indicator but also pay attention to what is happening in terms of supply and demand.
To date I have purchased 10 SFH, all up including rehabs etc. at a cost of $417,000, this is now generating $95,400 gross income pa (22% gross return). Generating around 12% net income.
$7950 income per month gross/ $4000 net per month (Detroit)
$10,000 net income (Atlanta)
I am all about increasing income, appreciation is a bonus.
So what is happening in this market at the moment, this will give you an insight, some figures.
Looks as though things are going pretty well! Always good to see an Aussie kicking ***.
I have always been interested in investing in the US market, especilly Detriot as far back as when the dollar was at parity, however being an undergrad student and tied up to a mortgage at the time meant I didn't have the spare cash at the time. Fast forward a number of years, I'm now living in the US and about to get a small lump sum from my employer so I am now beginning to look into buying here and Detroit is again the area that has my interest, especially given the volatility of the companies stock price.
How have you found investing here compared to Aus? What are some of the main differences that you have encountered? I get the impression that the chances of getting a shonky deal in the US is significantly higher than back hom.
Any advice for an Aussie trying to crack into the US market?
Keep up the good work!!Thanks
Investing in US will have more challenges, however success will come down to networking and lots of research
In Oz was not only investing in my own State I was investing in any market that was rising
Timing is everything in my humble opinion
All the best
I scout the market nationally for commercial acquisitions and my observation is that at the moment the market is perfectly priced. Sure you can buy cash flow and even ride some modest appreciation in rust belt cities but these are not opportunities; returns only exists because these places are dying cities with poverty rates through the roof and largely negative demographics. 12% cash on cash for C properties in detroit are very unimpressive risk adjusted returns. If the economy tanks post covid in 2021 these cities could really suffer and trap the equity of many investors
This reminds me of one of those stock market advertisements. Wo(man) who buys amazon at 1.27/share has new pick.
Update..... I sold out of Detroit
Why??? Too many headaches and if you are out of State or country you are a target to get ripped off
Fortunately market has been rising so have been able to cash out with no loss
What I found with Detroit is no integrity. Dont do it..... lesson learnt
I was beginning to think you were another those covert detroit wholesalers. Glad you saw it for what it was.
Originally posted by @Courtney Duong:@Marisa R.
May I ask how did you transfer money into US? Did you transfer it directly to your personal account in US for the buying or you had to go around? Asking because my brother is in Vietnam and he wants to invest in US.
I set up 3 US accounts accounts in 2011. I had to do this in person as they needed to ID me etc