Canadian investors: Are you thinking of buying foreclosed and distressed US properties? You've read about the rules, regulations, but what is it really like "on the ground", to own single and multiple family homes in Michigan or New York state?
Some of my 21 units came from In-Rem auctions. These are good deals, if done right.
The G.R.M. (Gross Rental Multiplier, as defined by real estate guru Raymond Aaron) were less than 2X, in theory, on some of In-Rem auction acquisitions.
Compare that to the GRM of 5.5X to 8.2X in my Ontario "university area" rental properties, at the time.
For example, I purchased a small New York house outside the city for $12,500 at a county tax arrears auction. The rent was $400/month and the tenant was stable. Two years later, I sold it, without a realtor, for $17,600 via a telephone auction between two buyers. I spent $1,100 in roof repairs.
However, Jack, a Canadian investor, forfeited his $8,000 deposit on a property he won in the same country tax auction. The vacant land was adjacent to the city airport and looked like it was worth hundreds of thousands of dollars. Why did he just forefeit on his win? You'll have to attend or listen to the story, at my lunch lectures, or via phone consultation.
My saddest, worst story? A mansion with a carriage house, in town, one block from the supermarket, that I won at an In-Rem auction. On paper, it looked like a winner. However, I should have walked away, giving up my deposit, like Jack. This mansion was full of antiques and antique car parts, too.
My previous experience? Acquiring, rehabbing, and adding living space to rental properties in Western Ontario, for my friends and family. These units provided a cash-on-cash return of over twenty-five percent, annualized.
Overall, I would have been profitable in distressed U.S. rental properties, if it were not for one very, very costly mistake.
However, I wasn't the only Canadian who lost. According to a magazine study, fully 80 percent of Canadian companies (including banks) who went South Of The Border to invest did not make any money.
How about individual Canucks who invested in New York and Michigan? Even though I learned at lot by joining the New York State Real Estate Investors Association, my challenges in the US were surprising. Like guru Raymond Aaron himself told me, the U.S. real estate market is a different kind of game. When renting, a landlord in the US must have very sharp wits at all times, and use the "periscope" method of vetting rental applicants. Know how the "periscope" is done?
So, what were the major mistakes and pitfalls in US real estate deals?
Well, I'd love to share my anecdotes with you. Boy, do I have stories to tell. For example, I had two instances where my down payments got stuck in the deal, and it took a lawsuit to retrieve one. Then, there's the dead tree story, that tree-huggers will want to hear; the inspector with the XRF ticket, the forged endorsement on a tenant's cheque. An American rehabber/investor who did his own roofing repairs came down with a rare, but ultimately fatal, problem. With my information, you can avoid falling into these potholes.
For $175, I offer a lunch-lecture or phone consulation. If I only knew then what I know now, I'd have shaved about $125K from my loss in investing in US distressed properties. That's what I'll be sharing with you.
Try me for a one-on-one lunch lecture, lunch included, or by phone consultation, if you're unable to attend in person. I'm also available to provide my opinion on properties that you may be considering.
Compare that to the GRM of 5.5X to 8.2X in my Ontario "university area" rental properties, at the time.
For example, I purchased a small New York house outside the city for $12,500 at a county tax arrears auction. The rent was $400/month and the tenant was stable. Two years later, I sold it, without a realtor, for $17,600 via a telephone auction between two buyers. I spent $1,100 in roof repairs.
However, Jack, a Canadian investor, forfeited his $8,000 deposit on a property he won in the same country tax auction. The vacant land was adjacent to the city airport and looked like it was worth hundreds of thousands of dollars. Why did he just forefeit on his win? You'll have to attend or listen to the story, at my lunch lectures, or via phone consultation.
My saddest, worst story? A mansion with a carriage house, in town, one block from the supermarket, that I won at an In-Rem auction. On paper, it looked like a winner. However, I should have walked away, giving up my deposit, like Jack. This mansion was full of antiques and antique car parts, too.
My previous experience? Acquiring, rehabbing, and adding living space to rental properties in Western Ontario, for my friends and family. These units provided a cash-on-cash return of over twenty-five percent, annualized.
Overall, I would have been profitable in distressed U.S. rental properties, if it were not for one very, very costly mistake.
However, I wasn't the only Canadian who lost. According to a magazine study, fully 80 percent of Canadian companies (including banks) who went South Of The Border to invest did not make any money.
How about individual Canucks who invested in New York and Michigan? Even though I learned at lot by joining the New York State Real Estate Investors Association, my challenges in the US were surprising. Like guru Raymond Aaron himself told me, the U.S. real estate market is a different kind of game. When renting, a landlord in the US must have very sharp wits at all times, and use the "periscope" method of vetting rental applicants. Know how the "periscope" is done?
So, what were the major mistakes and pitfalls in US real estate deals?
Well, I'd love to share my anecdotes with you. Boy, do I have stories to tell. For example, I had two instances where my down payments got stuck in the deal, and it took a lawsuit to retrieve one. Then, there's the dead tree story, that tree-huggers will want to hear; the inspector with the XRF ticket, the forged endorsement on a tenant's cheque. An American rehabber/investor who did his own roofing repairs came down with a rare, but ultimately fatal, problem. With my information, you can avoid falling into these potholes.
For $175, I offer a lunch-lecture or phone consulation. If I only knew then what I know now, I'd have shaved about $125K from my loss in investing in US distressed properties. That's what I'll be sharing with you.
Try me for a one-on-one lunch lecture, lunch included, or by phone consultation, if you're unable to attend in person. I'm also available to provide my opinion on properties that you may be considering.
R o b M a t t h i e s
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Email: matthiesr at yahoo dot com
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Learn about distressed US real estate from my experience
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