All Forum Posts by: Jarek L.

Hello Fellow Investors

I'm from Poland but currently based in the UK and would be willing to join you Uwe and others in serching for good multi-family deals in Ohio, that are cashflow positive.
I'm new to this forum as you can see, I've done a bit of researching on the subject of property investing in the US but mostly on Detroit market so far.
Anywhere in EU is very expensive and you can not count on any half decent cashflow from your investment.
US looks good at least on paper, especially so called rust belt states.
I'm not looking for capital appreciation as my main objective but for a solid cashflow. Have experience in efectively managing rental properties.
If you Uwe or others are interested , let me know, we could discuss it further.

Thanks

Jarek

If anyone has any links to recent economic researches that could be useful for property investors I would appreciate if you could post them.
When it comes to property management agencies I'read horror stories on how they can suck you dry of you are a long distance investor.
Any clues on how to judge whether an agency is worth being taken on board?
They all are eager and willing to take as many properties on their books, only after signing one a property investor can realise whether they are doing their job or not, and then changing an agency for a new one can be very time consuming for a foreign investor.

Very wise comments from all of you.
The more official research data I can get my hands on the better.
I fully agree that those cities - towns listed by Vicram C are worth considering as that's where people are moving which is mostly the sun belt and high technology places like some cities in Oregon state or California. I'm also a big fan of Texan cities especially San Antonio, McAllen, Austin and even Houston and Dallas, people like moving there , they have reasonably low crime rates, are sunny , close to the bay area, no snow, which means low heating bills for residents , but maybe high air conditioning bills on the other hand, but that's where population and job growth will be. Unfortunately all those places have high property prices, maybe they are not that high when you want to buy yourself a home for yourself to occupy but if you want to buy a rental property it doesn't make much sense.
Apart of this I don't think there is going to be much growth in property values in the US over the next 5 maybe even 10 years. there is many people that got caught in this last property bubble, their properties got repossessed their credit files damaged and it and it will take some time before they get to some acceptable level for banks to lend them money.
The same think with the US and global economy. In the last 20 years world experienced exceptional growth in GDP, but mostly it was all fuelled by cheap credit, growth of debt and for many years to come these debts will have to be repaid, banks and government balance sheets repaired, and to achieve these banks won't be able and willing to lend cheaply even if interest rates stay low as they are now, and government will have to save money show how good they are at keeping their balance sheets in check in order to not loose their credit ratings.
Many of these credit rating agencies are very carefully watching what governments around the world are planning to do in the next 5 years time to balance their books. Inability of governments to show that they have viable plans to balance their books will result in credit rating to be lowered. governments then won't be able to borrow money from investors local or foreign at the same low interests.
That's why i like to focus myself on places that are depressed, where property prices are cheap, rental properties can pay for themselves and maybe even give some positive cashflow , in short I like rust belt cities.
I know they aren't fashionable, which means lower competition, and more motivated sellers.
Detroit might be an extreme case of interesting depressed city as it doesn't have a diversified economy, but I think it's worth to take a look at, consider, and see what can be be done about it.
There are other cities that are of interest to me, but it's very hard to judge when I'm so far away. I will definitely come over sooner rather than later to see one of them for myself.
Before I come over I need to decide which place I want to choose and familiarise myself as much as I possibly can with the area and what future if any does the city have.
I'm not a big fun of Las Vegas as this city relies mostly on tourists coming over to loose their money , there will be less of them in the future as people simply won't have money to loose, not essential plane trips will have to be curbed to tackle global warming, and the city doesn't have much more to offer apart of gambling. It also has serious water shortage, which will only get worst in the future.
Florida? Too expensive insurance costs, many more hurricanes in the future due to global warming, not very diversified economy relying to much on tourists. tourists have many more options , new markets are opening for them all the time, Cuba might become a very interesting alternative for tourists and retires when it will get open to foreign home buyers.
I might be wrong off course but that's my idea of safe and profitable property investing.

Thank you PN for your reply.

There are many things that worry me about Detroit, and one of the reasons is that it is so heavily marketed to overseas investors.
I also have seen some investors trying to offload large number of residential properties bought a few months ago for 20 - 30% of what they paid.
There must be some reason for it, you just can't explain it by saying that this particular person wasn't good at managing rental properties. If it was all so rosy he could just simply let them all to section 8 tenants.
I've called several agencies in detroi, they off course are so eager to do business with me but I could never feel they were confident I could rent those properties easily and no one was very eager to deal with section 8 tenants , they were advising me to try to find first regular tenants, which is a little worried as I know that there are very high rental vacancy rates in Detroit and surrounding areas and also that Detroit has the highest unemployment rate in the Country at 25%. Who can afford to pay those high rents especially that many people are leaving , but houses aren't, so vacancy rates are increasing.
There is a lot to consider and I'm trying to get a feel of the place before I go there to see it for myself.
What do you think about Western NY property markets ( Syracuse, Rochester, Buffalo) as these are also heavily marketed to overseas investors?.
I'm interested in rentals.

Thank you Matt for your reply
The reason I've picked Detroit is that it is the foreclosures US capital, has very cheap properties in nice neighbourhoods , and there is a very good chance that the cash flow would be good.
I also know that according to the last data for the second quarter of this year it has rental vacancy rates at 16% which by anyone's standard is very high, but I've also been told that the government contributes high share of rents to section 8 tenants, which could be a stable source of rents even if the City and the region experiences very high unemployment rates.
I fully agree with both of you that there is no substitute for being there by myself and learning about the area, and checking properties , but I'm only just starting and to learn about things are being done in your Country.
The other thing that worries me about the buyers agent I talked to and who is supposed to get me more info about the house for sale is that he was refered to me by the listing agency and that his surname is the same as the listing agent's. This might mean there could be some conflict of interest here.
What would be the best way of finding a could , and dependable buyers agent that would be able to let me know about properties that haven't yet hit the market, pre-foreclosures, properties that are not yet listed on MLS, I mean agents that have some relationship with banks and can source properties at a very early stage of repossession?
I'm planning to buy several of them.

Thank you

Thank you Jon for your prompt reply
I know exactly what you mean. Buying from far away is never a good idea.
I've been researching Detroit area for about two months now a couple of hours a day, reading different posts on city-data, checking what properties are available on realtor.com , trulia, some of banks REO's , craigslist, and this forum.
I know it is not anywhere near as good as being on the ground and trying to get to know the place first hand.
I know roughly where to look now, I have some idea what a good deal could be in a particular area.
I also know that very cheap houses are not worth looking at.
The area where I located this particular house is in a good area, property is cheap, from what description says in a good condition " requiring minimal work".
The street and this particular house look very impressive in google earth map, the property has been listed very recently and already has 2 offers on it.
So I reckon it must be a good place if there is two offers placed , most likely by local buyers/investors.
I know I need to go to see Detroit , I know it is a very depressed area, 25% unemployment, I know what is it's racial profile, and I know it's been voted by forbes as the city with the highest crime rate in the country, i know houses uninhabited are very quickly vandalized, expensive stuff stolen ( copper in particular) and it cost a lot of money to bring it back to a good condition.
I know it's been losing it's population since 1967 riots took place, and recently the population loss has accelerated, but houses in some desirable areas are so very cheap and can produce a good cash flow if bought for this purpose.
There are some things that I can not learn by asking in this forum , but there are some that i can like:
1. how to find a good buyers agent that will be working for me?
2. Is this agent in your opinion going to be working for me, or does he have some of his own agenda?
3. Do I pay the buyers agent or does he get paid by a bank that sells this REO property?
4. Is this natural that in this case the buyers agent is being paid a commission by the selling bank, can there be any conflict of interest?
5. How do I find out whether there is a real demand for rental properties? So far every management company I've spoken to told me there isn't going to be a problem, but that's maybe they know I'm from far away and they only want to have my properties on their books.

Thank you once again for your help

Thanks to the internet I've able to learn a bit about this City.

Hello

I'm new to this forum. I've reading many post in the last 2 weeks and now have one question.
I'm living in one of the EU Countries and would like to buy some properties in the US especially in Detroit area and have it ready to rent.
I've been researching some properties for sale, most of them are REO . I've chosen one property that looks good and is cheap.
I've enquired at the agency listing it and I've been told I need a buyres agent , I didn't have any, I was given a phone number to one, I called him and when I asked him who pays him for his services , he said the bank that is selling it.
1.Will this make sure that I get a good deal or will he make sure that the bank selling it and paying him a commission will get a good deal?
2. Do I need an agent if I want to buy a property, or can I just place an offer by myself?
3. What's the best way of choosing an agent if I want to make sure that he looks after me not the seller?
4. Who should pay the agents commission a bank selling REO property or a buyer?

I would appreciate if you could answer those questions and help me educate myself so I don't make silly mistakes.

Thank you