Canadians Snap Up U.S. Properties

[Rickson9]

[quote user=jonathanb] Rickson, Is it unlikely to hope and wait that enough investors will leave the Phoenix market to bring back your desired returns.... or are you moving onto greener pastures...



Normal markets everywhere. Always watching and reading.



Never hope for anything. Take what the market decides to give me. Right now, markets are giving me nothing so I'm doing nothing.

 

[Thomas Beyer]

[quote user=Rickson9]Right now, markets are giving me nothing
not true .. but an opinion nevertheless ...

 

[Rickson9]

[quote user=ThomasBeyer][quote user=Rickson9]Right now, markets are giving me nothing
not true .. but an opinion nevertheless ...




That's why I said "me" as opposed to "markets are giving nothing". So it is true. For "me". Just to clarify.

 

[jonathanb]

[quote user=Rickson9]Normal markets everywhere. Always watching and reading.



By this do you mean everywhere in Canada/US? Or have you investigated markets in other countries? I would assume that there is a market somewhere to provide you with your target return. Maybe not... just throwing that out there.



Thanks again for posting that info. Very interesting thread.



Jon

 

[Rickson9]

[quote user=jonathanb][quote user=Rickson9]Normal markets everywhere. Always watching and reading.



By this do you mean everywhere in Canada/US? Or have you investigated markets in other countries? I would assume that there is a market somewhere to provide you with your target return. Maybe not... just throwing that out there.



Thanks again for posting that info. Very interesting thread




For better or worse, the only markets that I have some limited familiarity with is the Toronto and Phoenix real estate market and the U.S. stock market. For the small number of assets that would interest me in those aforementioned markets, everything appears normal or rising in price (i.e. uninteresting to me). Best regards.

 

[Rickson9]

[quote user=wealthyboomer]New Wave of Distressed Homes to Hit US Real Estate Market



Nov, 23 2010



A wave of distressed residential properties may flood an already saturated residential real estate market in the coming months, according to CoreLogic.



According to a report from the financial and property information provider CoreLogic (NYSE: CLGX), there were 2.1 million units of distressed, but not-yet-listed residential properties nationwide as of August 2010. That`s an eight-month supply of distressed properties that had yet to hit the market.



Already listed properties, including distressed and non-distressed homes, totaled 4.2 million units in August. 2010, enough supply to last 15 months.



Full Story from BizJournals.com





Metro Phoenix Housing Rises Across The Board



Mar 25, 2013



For the first time since the housing-market free fall began more than
five years ago, it`s now possible for every type of player to get back
in the real-estate game.



Basic economic laws of supply and demand worked their magic over the
past year, as a huge number of distressed properties were snapped up by
institutional buyers and other investors. That played a big role in
solidifying the market, and as the year passed, a stronger economy
brought a healthier mix of players into the game. They included an
ever-growing number of first-time buyers, new-home buyers and homeowners
who finally were able to sell for a profit.



Overall, the growing group of buyers helped propel the region`s
median sales price up more than 34 percent in the past year, as
affordable properties on the market were in limited supply. That price
increase, in turn, has motivated more homeowners to put their homes up
for sale because they are no longer underwater.



Analysts say home prices are expected to continue to climb this year
because of the low supply of homes for sale and rising demand from
regular buyers trying to purchase.




http://www.azcentral.com/business/realestate/articles/20130323phoenix-housing-prices-rise.html?nclick_check=1



oops

 

[Thomas Beyer]

S&P 500 and Dow Jones also at a record high this month. The US economy is certainly on a rebound and not in crisis mode anymore. The only people who think that are politicians trying to justify excessive spending and tax reductions for more "stimulus". Our asset in Texas has been rising steadily in value, is fully leased and rents are rising, with the biggest jump actually in 2010 (up 8% over 2009) and more modest 3-4% rise ever since.

 

[Rickson9]

[quote user=wealthyboomer]The IMF, warned on Friday that high levels of national debt and a still shaky financial sector threaten to derail the global economic recovery. The foreclosure backlog in US property markets is large and growing, in part due to the recent expiration of the home buyer's tax credit. When realized, this could further depress real estate prices. This could lead to "disproportionate losses" for small and medium-sized banks, which could in turn "precipitate a loss of market confidence in the recovery," the IMF warned.





Half A Million Canadians Now Own Property In Florida




More than 500,000
Canadians now own property in what was one of the hardest-hit U.S.
states in the 2008 housing meltdown. And snowbirds remain the biggest
foreign purchasers of Florida real estate despite a surge in interest
from Asian and South American buyers over the last year or so. Canadians are already seeing payback from their purchases, says the BMO Financial Group report released Thursday.



Canadians still buying plenty of Florida real estate

 

[Rickson9]

[quote user=wealthyboomer]Don't worry about it being fear mongering as it is very much in the news. Much of this could become another economic disaster.

Bank of America could be forced to buy back millions of loans.

http://tinyurl.com/2bhcv6k




Phoenix Tops In Nation For Home Price Gains



April 30, 2013



The comeback of the metro Phoenix housing market far outpaced the
nation in February, posting the biggest year-over-year price gain out of
the top metropolitan areas, according to the latest report by the
Standard & Poor`s/Case-Shiller Home Price Indices.



Valley home prices surged by 23 percent in February from a year
earlier, by far the biggest gain of all 20 cities measured on the index.




Phoenix Tops In Nation For Home Price Gains | Phoenix Business Journal

 

[DonCampbell]

No matter where, what or who.... the keys are not the "Market Numbers" that the media splash around and are easily accessible to all - the key is the underlying economic fundamentals of not only the country, but the state (broke or not), the city (about to tax foreigners or not) and neighbourhood (growing with the right target people or not).



This Canada / US debate has always made me chuckle as people allow their emotions to really come to the forefront. I like to look at all of the items on the NEW Property Goldmine Scorecard, that way I can see market conditions 18 - 24 months in advance.



Then, when the target city is outside of Canada (for Canadians), we then look at:



1. Health of the Federal Gov't (UK/US/Spain) and what they will have to do to rectify their financial situation (i.e. tax foreign owners more than voters, add surtaxes on land etc)



2. Health of the local state/council/municipality as this will help determine who will be moving into the area.



3. Tax and liability laws that pertain to Canadians buying in these areas and what strategies are required to minimize the risk (i.e. NOT buying in a corporation across the US/UK borders)



4. Whether the NET NET NET return on my Canadian dollar investment (the bit that comes to me to spend after taxes/fees/levies/income taxes) is better home or abroad and will this momentum continue or is it a short term blip.



5. What is my currency risk.



6. What are my financing options. Does a higher down payment off-set the perceived return? In other words, where will MY portion of the money work hardest and gain its highest return.



That's how I look at it because we can always find media headline stories to support our positions (pro or con). I want facts.

 

[Rickson9]

U.S. Home Prices See Big Gains

May 28, 2013



Home prices surged during the first quarter at their fastest pace in
nearly seven years, the latest sign of a sustained warm-up in an
economic recovery that has otherwise been marked by starts and stops.



Prices rose from one year earlier in all 20 cities measured by the
Case-Shiller index, with the largest gains in the West or in markets
pummeled by the housing bust. In March, prices were up 22.5% in Phoenix
from one year earlier and 22.2% in San Francisco.



As demand outpaces supply, more real-estate agents are working to drum
up leads by telling homeowners about intense buyer demand in their local
neighborhoods.



U.S. Home Prices See Big Gains



[quote user=wealthyboomer]According to the Wall Street Journal`s latest quarterly survey of housing-market conditions, home prices continue to drop. They`ve dropped in all of the 28 major metropolitan areas, compared to a year earlier. And remember how awful things were in the housing market a year ago! In fact, the size of the year-to-year price declines is larger than the previous quarter`s in all but three of the markets surveyed.



Home prices have dropped most in cities already hard hit by the housing bust ` Miami, Orlando, Atlanta, Chicago. But declines increased in other markets that had before escaped most of the downdraft, such as Seattle and Portland.



Things could easily get worse on the housing front because millions of owners are in various stages of foreclosure or seriously delinquent on their mortgages. Millions more owe more than their homes are worth, and, given the downward direction of the housing market, are going to be sorely tempted to just walk away. This means even more foreclosure sales, pushing housing prices down even further.



So don`t be fooled. The American economy isn`t back. While Wall Street`s bull market is making America`s rich even richer, most Americans continue to be mired in a worsening housing crisis that the Administration is incapable of stemming, and of which Wall Street has now seemingly washed its hands.



Source: Robert Reich--Chancellor's Professor of Public Policy at the University of California at Berkeley.





Hope all is well "wealthy"boomer!

 

[Rickson9]

[quote user=Darr]Oct. 31, 2012

In the long term however, global investors will shun the USD as the FED is monetizing in excess of a $Trillion per year. The US is fast approaching the point of no-return where they will be borrowing 40% of their expenditures very soon. Every country in history that has breached this threshold has, without exception, slipped into hyperinflation with a rapid devaluation of their currency.





Perhaps we may find out sooner than later.




Beyond the immediate Fed driven moves, many investors say the dollar will push higher as the economy continues to strengthen. "The factors are coming together for a mutli-year rally in the dollar,"
said Paresh Upadhyaya, senior currency strategist at Pioneer
Investments. For one, the U.S. economy is expected to grow faster than most developed economies in the world, said Upadhyaya. In addition, the U.S. government appears to be getting its fiscal house
in order sooner than anticipated, thanks largely to forced budget cuts
that took effect earlier this year.




USD Multi-Year Bull Run

 

[Rickson9]

[quote user=DonCampbell]Imagine their shock when they start to do the homework (after the fact).



I hope it all turns out well for them, but the facts often don't lie.





I'm definitely 'shocked'! I'm glad people on this thread wished me well on my investments in Phoenix. I appreciate it! It turned out better than I could have imagined!



Although I am still curious about what "facts" you are referring to? Any sources of information would be appreciated. Thanks.



PHOENIX REAL ESTATE: HOUSING PRICES SOAR 27 PERCENT

http://www.abc15.com/dpp/news/region_phoenix_metro/central_phoenix/phoenix-real-estate-housing-prices-in-phoenix-area-soar-27-percent

 

[Rickson9]

Where Wages Have Grown The Most Since The Recovery

http://www.theatlanticcities.com/jobs-and-economy/2013/09/best-cities-raise-americas-post-recession-economy/6668/



[quote user=addbo]


A very interesting topic. Thanks for sharing Rickson9! At the end of the day each person is willing to share as much or as little as they like... just like the topic on Don Campbell's Net worth solicited responses as to how it was not anyone's business but that he was still free to share that he had 193 doors =) Is it fair to harp on a guy who at least took the time to share his insight?



I found it very interesting to read this topic and see the amount of negativity on Rickson9's system. Isn't the number one trait to avoid and control in Don Campbell's is Negativity? "People can always find a reason for not doing something". While some skepticism is valid ("What's behind the curtain")... I don't really see the problem with what Rickson9 has shared (or not shared). At the end of the day if you want to invest in the US... or anywhere else ... you have to do your own due diligence... does it matter really what zip code he's investing in... he's told you Phoenix,AZ which is already pretty specific... and you can do your own MLS lookups to see where prices are in the range he's talking about for his 2 bedroom locations... and then do a crime lookup and see which of those has the lowest crime rate =) (You'll probably find his zip code in the list of zips that would crop up)



While the scarcity mentality is interesting... since REIN always teaches about how there are always opportunities out there... the whole capitalistic system is based on supply and demand... and people do make fortunes based on the scarcity of a resource (oil anyone?).



I for one applaud Rickson9 for sharing his current strategy and not letting the negative nancy's prevent him from working towards his personal Belize.





Such a nice and rare sentiment!

 

[Rickson9]

Short, Foreclosure Sales Have Dried Up In Phoenix. Total "Distressed" Share Collapses

First, on short sales from CR:
Look at the first two columns in the table for Short Sales Share.
Short sales are down sharply from a year ago, and will probably really
decline in early 2014. It appears that the Mortgage Debt Relief Act of 2007
will not be extended again next year. Usually cancelled debt is
considered income, but a provision of the 2007 Debt Relief Act allowed
borrowers "to exclude certain cancelled debt on [a] principal residence
from income. Debt reduced through mortgage restructuring, as well as
mortgage debt forgiven in connection with a foreclosure, qualifies for
the relief." (excerpt from IRS). This relief expires on Dec 31, 2013. Complete all short sales by the end of this year!

Read more at http://www.calculatedriskblog.com/2013/10/lawler-preliminary-table-of-distressed.html#txVK4FZTVWqOtGom.99
First, on short sales from CR:
Look at the first two columns in the table for Short Sales Share.
Short sales are down sharply from a year ago, and will probably really
decline in early 2014. It appears that the Mortgage Debt Relief Act of 2007
will not be extended again next year. Usually cancelled debt is
considered income, but a provision of the 2007 Debt Relief Act allowed
borrowers "to exclude certain cancelled debt on [a] principal residence
from income. Debt reduced through mortgage restructuring, as well as
mortgage debt forgiven in connection with a foreclosure, qualifies for
the relief." (excerpt from IRS). This relief expires on Dec 31, 2013. Complete all short sales by the end of this year!

Read more at http://www.calculatedriskblog.com/2013/10/lawler-preliminary-table-of-distressed.html#txVK4FZTVWqOtGom.99
All comparisons are September 2012 vs. September 2013 except where noted.



"Short Sales Share" has fallen from 27.0% to 8.8%

"Foreclosure Sales Share" has fallen from 12.9% to 8.0%

Total "Distressed" Share has fallen 39.9% to 16.8%



http://www.calculatedriskblog.com/2013/10/lawler-preliminary-table-of-distressed.html



The rapid rise in property prices have likely contributed to this.



Housing Prices In Phoenix Soar 27 Percent

A report from the university's W. P. Carey School of Business shows the
median single-family home price in the area rose to $190,000, up roughly
27 percent from last June when the price hovered around $150,000. The
report also noted the median price for condominiums and townhomes went
up dramatically to $125,000, a nearly 40 percent increase.



http://www.abc15.com/dpp/news/region_phoenix_metro/central_phoenix/phoenix-real-estate-housing-prices-in-phoenix-area-soar-27-percent



Although I am currently not purchasing properties in the U.S. right now, I am keeping in regular contact with people who are rehab/flipping property in Texas. Only time will tell if I decide to become involved with that and what role I want to play.

 

[Rickson9]

Phoenix RE Market Looking To Outpace The Nation In 2014


Phoenix generated a flood of housing-related headlines in 2013. It`s
easy to understand why. This was one of the areas hit hardest by the
national housing crisis and subsequent recession. Home prices in and
around Phoenix began plummeting in the summer of 2006 and didn`t hit a
firm bottom until five years later, in the fall of 2011. Foreclosures
surged as homeowners watched their equity levels sink into the red. The
local real estate market ground to a halt.




Flash forward to the present. It`s November 2013, and Phoenix is now
one of the most rapidly rebounding housing markets in the country.




Based on data provided by S&P/Case-Shiller, Clear Capital and
others, we predict that home prices in the Phoenix metro area will rise
by nearly 20% in 2013. That would put it among the top-performing metro
areas in the country (most of which are in California), in terms of
year-over-year price gains.

http://www.homebuyinginstitute.com/news/phoenix-market-forecast-497/

 

[Rickson9]

Home Sales Are Faster Than They Were A Year Ago

U.S. homes are selling 30 days faster now than they were a year ago, according to a new report from Zillow.


This September, home listings spent an average of 86 days on Zillow.




Tight inventory was the main reason for this, according to Zillow chief economist Stan Humphries

http://www.businessinsider.com/home-sales-are-faster-than-theyve-been-in-a-year-2013-11

 

[Rickson9]

U.S. Cities That Have The Highest Percentage Of Renters

http://www.businessinsider.com/heres-a-chart-of-which-cities-have-the-highest-rate-of-renters-2013-12

 

[Rickson9]

Phoenix Real Estate Market Forbes' "BEST BUY CITIES" For 2014

Local Market Monitor pulled data for the largest 100 metropolitan
statistical areas (a geographical designation used by the U.S. Census)
with populations of at least 575,000. From there, the choices were
ranked primarily on four factors: population, home prices, and the local
jobs economy. Each of our Best Buy Cities have high population and job
growth, relatively low home prices, and are still considered
under-valued.

Pop.: 4,364,094

Actual Home Price: $196,035

Equilibrium Home Price: $216,373

Difference: -9%

3-year Growth Forecast: 41%


http://ktar.com/22/1688054/PhoenixMesaScottsdale-real-estate-market-makes-Forbes-Best-Buy-Cities-for-2014



I disagree with the "under-valued" assessment, but what do I know. Back in 2010/2011 there was so much beautiful fear that it was palpable. I love it.



[quote user=Smitty]And then, what about due diligence, especially considering the recent "freeze"?

Will you really own that foreclosed home in the US?

As per the following:

http://www.stockhouse.com/Community-News/2...nal-catastrophe

Don't know if he is simply fear mongering, but some food for thought at least






That food wasn't very nourishing for my thoughts. Or my pocketbook.



[quote user=gwasser]I wish you all the success with your U.S. real estate investing. It is not for me. The complexities of U.S. immigration law and tax laws and local real estate laws require too much of my time to bother with.



The risk of ever increasing mortgage defaults and foreclosures pulling down real estate values even further is too high.



Many Canadian corporations thought that they were smart taking over U.S. business concerns. Most fell on their face. Robert Campeau comes to mind and so does Jean Coutu and many oil and gas companies. Too many to count. The U.S. is fiercely competitive and if things don't go in their favour, they are very good at making new laws to turn things to their advantage afterall. Look at the public outcry when some middle eastern countries were trying to buy some port facilities. Or look at when the Chinese were trying to buy Unocal.


Comparing my buying of Phoenix, AZ property to Robert Campeau, Jean Coutu, and Unocal. And people thought that I was crazy? Seriously?



[quote user=gwasser]Have you ever sold one of your U.S. properties and repatriated the proceeds? Just try and see how profitable it all is.



Why take all that sh...t (too many dots) when you are having one of the best real estate markets laying at your feet? Canada, in particular Alberta and Ontario (Canada's top 10 investment towns).




Why would I sell? Please let me know. Best real estate markets laying at my feet? My returns have destroyed the "best real estate markets" in Canada since that post. Over 20% gross margins and a doubling of price in 2 years. Let me know how Alberta and Ontario have done.



[quote user=ThomasBeyer]indeed .. more here on a possible US apocalypse: http://myreinspace.com/search/rein_members_only/Coffee_Shop/106-17948-91363-Socialists_wrestle_with_tea_party__the_US_Saga_.html#91363 .. as even if the US pulls through there $ will be worth a lot less and their taxes will be higher .. yielding FAR LOWER cash on cash returns after taxes than a similar Canadian investment !!


When I was buying the CAD and USD was at parity. Let me know when my cash on cash returns will be FAR LOWER. I'm still waiting. They still seem pretty good right now.



[quote user=ThomasBeyer]The only things that works right now IMHO is

a) buy houses in pretty areas with cash .. and sell them immediately, or

b) buy multi-family assets with low mortgages with supreme cash-flow for a long term (10+ year) hold !


c) buy houses/condos in pretty areas with cash... and profit for a long time.



[quote user=DonCampbell]I like to look at all of the items on the NEW Property Goldmine Scorecard, that way I can see market conditions 18 - 24 months in advance.




Then, when the target city is outside of Canada (for Canadians), we then look at:








1. Health of the Federal Gov't
(UK/US/Spain) and what they will have to do to rectify their financial
situation (i.e. tax foreign owners more than voters, add surtaxes on
land etc)




2. Health of the local state/council/municipality as this will help determine who will be moving into the area.




3. Tax and liability laws that pertain to Canadians buying in these
areas and what strategies are required to minimize the risk (i.e. NOT
buying in a corporation across the US/UK borders)








4. Whether the NET NET NET return
on my Canadian dollar investment (the bit that comes to me to spend
after taxes/fees/levies/income taxes) is better home or abroad and will
this momentum continue or is it a short term blip.



5. What is my currency risk.



6. What are my financing options. Does a higher down payment off-set
the perceived return? In other words, where will MY portion of the
money work hardest and gain its highest return.



That's how I look at it because we can always find media headline stories to support our positions (pro or con). I want facts.







I started buying real estate in the U.S. in Jan 2010 and my returns seem satisfactory, but I never used the NEW Property Goldmine Scorecard. Out of curiosity, what did the NEW Property Goldmine Scorecard say about U.S. real estate market conditions 18-24 months prior? I'm always looking for new resources to help me make more money. Thanks.



I'll just give my perspective on the aforementioned 6 points based on my experiences. Other investor's experiences may differ:

1. Fine and Nothing.

2. Fine.

3. Hire accountant.

4. NET NET NET is fantastic.

5. None.

6. Not applicable to me since I don't use financing. My priority is to minimize downside.

 

[Rickson9]

[quote user=Darr]PS. With a low Energy/Natural Resources/Food per capita (relative to Canada), the USD will never again see parity with the Cando in the long term (IMHO and once we get past the liquidity scare).







Hey Darr, it appears that you were right. You wrote your post in 2012 and the USD is no longer at parity with the CAD. Your timing was right on the mark as the currency pair pretty much broke parity shortly after your post. Kudos. Any more insights going forward? Will we move back to parity?



[quote user=Darr]Oct. 31, 2012. In the long term however, global investors will shun the USD as the
FED is monetizing in excess of a $Trillion per year. The US is fast
approaching the point of no-return where they will be borrowing 40% of
their expenditures very soon. Every country in history that has breached
this threshold has, without exception, slipped into hyperinflation with
a rapid devaluation of their currency.


Hey Darr, when will this rapid devaluation of the USD start to happen? You mentioned "long term" a year and a half ago. Do you mean another year or two? Or something longer?







Canadian Dollar Hits 3-Year Low Against The Greenback

The Canadian dollar touched a 3 1/2 year low Tuesday as the greenback
shot higher on data showing the U.S. trade deficit fell in November to
its lowest level in four years. The
loonie was off the worst levels of the session but still down 0.78 of a
cent to 93.1 cents U.S. late in the morning after earlier going low as
92.91 cents US. Other data showed that Canada's overall trade
deficit worsened slightly during November, rising to $940 million from
$908 million in October, while its trade surplus with the United States
shrank to $2.8 billion in November from $3.1 billion in October.


http://ca.finance.yahoo.com/news/canadian-dollar-lower-greenback-strengthens-strong-u-trade-140041715.html



[quote user=ThomasBeyer]I rather expect the US $ to further
deteriorate vs. the Can $, as neither presidential candidate has a
proven recipe for debt reduction ! One has proven he couldn't do it the
last 4 years (and big government has never worked) and the other wants
to reduce taxes.


Hi Thomas, when do you think your expectation will come to fruition? I don't trust economists. I would like to hear your perspective on this. Thanks.



Loonie Hits 3-Year Low, Economists See More Declines Ahead

The Canadian dollar tumbled to a three-year low on Tuesday and several economists say it has further to fall. Six
economists, speaking at an annual economic outlook forum in Toronto,
gave their views on everything from the housing market to interest
rates. On the Canadian dollar, several said they see it weakening
further in the coming quarters. The loonie fell to about 93 cents
Tuesday, its lowest level since May, 2010.

http://www.theglobeandmail.com/report-on-business/economy/loonie-hits-three-year-low-economists-see-more-declines-ahead/article16229612/