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Canadians Snap Up U.S. Properties

housingrental

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Thanks Rickson
It comes off as something doesn`t add up with your posts
If there`s ton`s of opportunity out there re "My returns can be found by any individual who is motiviated enough to look for it."
Then there should be no fear as to sharing in more detail. The low chances of even a few people reading this and picking up 10 properties in your desired area shouldn`t harm your interests if there`s many to be found?
 

Rickson9

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QUOTE (housingrental @ Jul 16 2010, 12:46 PM) Thanks Rickson
It comes off as something doesn`t add up with your posts
If there`s ton`s of opportunity out there re "My returns can be found by any individual who is motiviated enough to look for it."

I apologize that I was unable to write in a way to make it add up for you. I am not the best writer.

QUOTE (housingrental @ Jul 16 2010, 12:46 PM) Then there should be no fear as to sharing in more detail. The low chances of even a few people reading this and picking up 10 properties in your desired area shouldn`t harm your interests if there`s many to be found?

I`m assuming that you are speaking for yourself.

Speaking for myself, I am not willing to provide more detail about properties in Phoenix, AZ that I am interested in. Please feel free to email or call me if you need more clarification.

Best regards.
 

housingrental

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Hi Rickson
Thank you for your responses
It is of course fine if your not willing to talk in more details.... However with this your posts aren`t particularly helpful... Why promote a path if obscuring it?
It`d be like if I started posting on how much money there is to be made investing in Waterloo but wasn`t willing to go beyond that... it is not very helpful.... And unless you are trying to sell investments to readers of this forum what`s the point?
 

wealthyboomer

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QUOTE (housingrental @ Jul 17 2010, 11:49 AM) Hi Rickson
Thank you for your responses
It is of course fine if your not willing to talk in more details.... However with this your posts aren`t particularly helpful... Why promote a path if obscuring it?
It`d be like if I started posting on how much money there is to be made investing in Waterloo but wasn`t willing to go beyond that... it is not very helpful.... And unless you are trying to sell investments to readers of this forum what`s the point?
He often responded the same thing on http://www.milliondollarjourney.com/ until he got banned.
 

RebeccaBryan

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QUOTE (bizaro86 @ Jul 14 2010, 04:18 PM) Fair enough. The point remains that more people fail than succeed, and research and hard work are required for success. Its by no means impossible, as demonstrated by the many REIN members who have had significant success, but its not a no-brainer, slam dunk either. (To mix my metaphors)



He`s provided enough information in various threads that anyone wanting to replicate what he`s doing could, although it would require some of that aforementioned hard work. Some things are better kept close to the vest, especially if you`re still buying. The last time you found a great deal on a property, did you tell a bunch of other investors about it before you were able to get an offer accepted? I sure didn`t.
Michael

Yes, I share exactly where I invest if someone asks, and many times I share it even if they don`t ask. I share the mistakes I`ve made and also my successes in order to help another investor. Anyone who takes a "opportunity is scarce attitude" amuses me. The more you give, the more you get back. Why do you think people belong to REIN? One of the reasons is we can hang out with people that are more than willing to share their expertise and help each other succeed.

Don Campbell shares exactly where he invests too, because he can`t buy them all!!! And I might suggest neither can you. :)
 

Thomas Beyer

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QUOTE (wealthyboomer @ Jul 15 2010, 03:16 PM) ..Nevada, Arizona, Florida, California and Utah were next among states with the highest foreclosure rates. Rounding out the top 10 were Georgia, Michigan, Idaho, Illinois and Colorado.Like in the stock market .. the best investment opportunities always exists when times appear the bleakest !

Many great investment opportunities exist in the US .. but one has to consider
a) taxes
b) costs to visit initially and ongoing
c) exchange rate
d) difficulty in financing / more down payment required for Canadians
e) higher interest rates on mortgages

Having invested in both Scottsdale, AZ and near Dallas, TX I arrive at the conclusion that the net after tax ROI on the cash invested in the US can be similar
to investing in W-Canada after one factors in the larger downpayment, the higher taxes on exit and the costs due to distance !

In other words: for the average Canadian investor the (gross) ROI on the US asset has to be far higher
than a comparable Canadian asset to allow for taxes, exchange rate risk, mortgage rates that are higher, higher downpayment (or cash even) and holding costs !
 

Rickson9

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QUOTE (ThomasBeyer @ Jul 18 2010, 01:10 PM) Like in the stock market .. the best investment opportunities always exists when times appear the bleakest !
Many great investment opportunities exist in the US .. but one has to consider
a) taxes
b) costs to visit initially and ongoing
c) exchange rate
d) difficulty in financing / more down payment required for Canadians
e) higher interest rates on mortgages

Having invested in both Scottsdale, AZ and near Dallas, TX I arrive at the conclusion that the net after tax ROI on the cash invested in the US is similar
to investing in W-Canada after one factors in the larger downpayment, the higher taxes on exit and the costs due to distance !

In other words: for the average Canadian investor the (gross) ROI on the US asset has to be far higher than a comparable Canadian asset to allow for taxes, exchange rate risk, mortgage rates that are higher, higher downpayment (or cash even) and holding costs !

Very good points! An investor must definately find an assset in the U.S. that has enough ROI to cover the differences between the two countries!

I enjoyed reading each of your opinions and appreciate the recent bumping of this thread. I didn`t realize that investing in the U.S. had as much interest as it does.

As some have already done, any who are interested are welcome to contact me to discuss my experiences with regards to the original post. Good luck all!
 

Holenchuk

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QUOTE (Rickson9 @ Jul 14 2010, 02:41 PM) My wife and I buy 2 bed 2 bath condos in Phoenix, AZ. Off the top of my head, monthly costs are $175/mo for condo (HOA) fees, $40/mo home warranty, $40/mo home insurance, $55/mo property management, $950/yr property taxes. Approximately $390/mo expenses. Include whatever else you would normally expense (eg. maintenance, legal, accounting etc.). Rents for $700/mo. Purchase price of $35,000. At the height of the real estate boom in Phoneix, AZ these condos were selling for $150K (from Maricopa county tax records).

1 bed 1 bath condos sell for $20K.

We have bought with vacant possession and we have also bought with tenant already in place (ie turn-key).

These numbers represent zip codes in Phoenix, AZ that have none, or the lowest levels, of property and violent crime. Crime is my primary screen, my secondary screen is financial. Obviously if you go to areas with higher rates of property/violent crime the prices are lower. For example I could buy a 2 bed 2 bath for cheaper in 85032, but my property manager would probably get killed by a meth dealer.

We don`t use financing because it takes too long and there are enough cash buyers that competition is a serious consideration.

This is information about the ITIN:
http://www.irs.gov/individuals/article/0,,id=96287,00.html

I will not provide the zip codes where I am investing because the competition is already bad enough. I literally write up 20 offers to close on 1. This is not an exaggeration. There is enough information available online to research any zip in the U.S. (demographics, transportation, property/violent crime, proximity to shopping, schools, police, malls, universities, military bases, hospitals, golf courses, etc.) if an individual were so inclinded to invest.

I hope this helps a bit.

I am sure glad that I read this post. We have family down there.

 

bizaro86

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QUOTE (RebeccaBryan @ Jul 18 2010, 08:10 AM) Yes, I share exactly where I invest if someone asks, and many times I share it even if they don`t ask. I share the mistakes I`ve made and also my successes in order to help another investor. Anyone who takes a "opportunity is scarce attitude" amuses me. The more you give, the more you get back. Why do you think people belong to REIN? One of the reasons is we can hang out with people that are more than willing to share their expertise and help each other succeed.

Don Campbell shares exactly where he invests too, because he can`t buy them all!!! And I might suggest neither can you. :)

I certainly can`t buy them all, which is why I have no problem telling anyone where I invest, and I certainly have. (2 bedroom Calgary condos in inner city and/or c-train adjacent neighbourhoods, for anyone interested) On the other hand, if Rickson has narrowed his search down to a specific zip code, at 20-30k each he just might be able to buy them all!

Michael
 

GaryMcGowan

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There are a couple of things that come to mind when reading this post.

Investing in the US is intriguing to most, and people would like to do it but don`t.
I always like taking advice from people that have done what I want to do.
It is unwise to take advice from people that can not articulate and back up what they are saying.
You have to buy RE when nobody else is buying.
A success story is easily accepted when the author is willing to share how it was done.

my 2 cents
 

BrianPersaud

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QUOTE (Rickson9 @ Jul 14 2010, 07:00 PM) When I went to Phoenix I took a list of all the objections I`ve heard down with me and read it to my friends who live down there (Canadian and American). Everything from "Phoenix is in a desert and will run out of water!" to "What`s the primary industry in Phoenix?" (What`s the primary industry in Toronto?) to "How can I fix my place when I`m not around?", etc. It was a great conversation starter and they got a kick out of it.

As one Canadian snowbird told me in Phoenix, "Do you know why individuals make excuses not to buy RE in the U.S.? Because excuses are a dime a dozen so it`s cheaper."

I agree with excuses. Great quote.
 

wealthyboomer

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July 27 (Bloomberg) -- About 18.9 million homes in the U.S. stood empty during the second quarter as surging foreclosures helped push ownership to the lowest level in a decade.
The number of vacant properties, including foreclosures, residences for sale and vacation homes, rose from 18.6 million in the year-earlier quarter, the U.S. Census Bureau said in a report today.
 

Rickson9

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QUOTE (wealthyboomer @ Jul 28 2010, 03:50 AM) July 27 (Bloomberg) -- About 18.9 million homes in the U.S. stood empty during the second quarter as surging foreclosures helped push ownership to the lowest level in a decade.
The number of vacant properties, including foreclosures, residences for sale and vacation homes, rose from 18.6 million in the year-earlier quarter, the U.S. Census Bureau said in a report today.

Thanks for the post! It is extremely unfortunate that investors benefit most from these kinds of conditions. I wish it could be otherwise, but it is what it is.

Apartment Occupancy Up Amid Foreclosures (USA Today)
"Landlords are seeing a surge in apartment rentals as mounting foreclosures reduce homeownership and an improving job market for young adults encourages them to find their own places. The number of occupied apartments increased by 215,000 in the 64 largest U.S. markets in the first half of the year, according to MPF Research. That`s almost double the increase in occupied units in all of 2009 and the most since the firm began tracking rates in 1992. The vacancy rate declined to 6.6% in June from 8.2% in December."
http://www.usatoday.com/money/economy/hous...ents28_ST_N.htm

Apartment Rentals Surge In U.S. on Foreclosures, Jobs (Bloomberg Businessweek)
"“The rental market will be robust for the next few years,” Cisneros said. Effective rents, or what tenants pay after concessions or breaks from landlords, increased 1.4 percent in the biggest markets in the first half, according to MPF Research. Rents may rise 4 percent to 6 percent in both 2011 and 2012, compared with a gain of about 2 percent this year, Willett said. AvalonBay, which took a nine-month hiatus from construction in 2009, said in April it had seven communities under development and would increase rents for tenants renewing in the second quarter. It raised its forecast last month for second- quarter and 2010 earnings based on “improved operating trends.”"
http://www.businessweek.com/news/2010-07-2...sures-jobs.html

I am in first position on 2 short sales in Pheonix, AZ and I am very happy about that. I wasn`t the fastest one out of the block on almost a dozen other offers in the last 2 weeks. With prices and rentals as good as they are it is difficult to be the first on the scene.

Unfortunately short sales could take months to close as the banks do what they do. My personal experiences are in-line with the aforementioned articles - in this environment my property manager will likely have a few tenants lined up shortly after close. The only consolation investors have is that they are providing housing for former homeowners in a difficult situation.
 

Rickson9

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QUOTE (housingrental @ Aug 14 2010, 01:29 PM) Hi Rickson
Thank you for posting this useful content!!!


 

gwasser

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QUOTE (Rickson9 @ Aug 14 2010, 11:44 AM)


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.

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).
 

Berubeland

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US is very interesting because in certain places you can buy property for far less than the cost of construction. Over time their market will recover.

US has friendlier landlord & tenant law

On the downside, you are looking at doing a fair bit of due diligence in the USA. IMHO you have to go there for a decent chunk of time. There are also many scams going on. Not a day goes by where I don`t get some kind of get rich quick US investment advisory guaranteed to part you from your hard earned cash.

Rickson9 even though you are new to real estate investing you are a very savvy investor and unlikely to be taken in by such BS.

Personally I am not a fan of investing far away from your location, this adds a level of expense and requires trusting other people far more than I am comfortable with. That`s just me
 

Rickson9

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QUOTE (Berubeland @ Aug 15 2010, 08:51 AM) Rickson9 even though you are new to real estate investing you are a very savvy investor and unlikely to be taken in such BS.

I never say never. I make mistakes like anybody else (if not more so). I`ve only held RE for 10 years so I still have a ways to go.

Paying $35K per condo to collect $8500 per year in gross rent seems like a cheap way to learn.
 
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