Real Estate Investing In the US

[JBagorio]

Hi Everybody,

I have been hearing speculations that gave me the interest in doing some research the idea of buying real estate in the US. To be honest I don`t know where to start, but typing key word on every search engines gave me some insight.

Given the strong Canadian dollar and the slowing down real estate market in the United State...Is it a good time to invest!? It is for sure a time to buy when list prices are going down. The only question is where in the US is the best place to buy.

What do you guy think of the idea?

Jason

 

[BobHudson]

You certainly do need to pick a spot to invest, a target area much smaller than state level.
My wife and I have spent time looking throughout Arizona and eventually did buy a property last month just out of Tucson. Generally speaking, Phoenix is a buyer`s market and there are deals to be had within Tucson.

Many parts of Florida are also looking at prices down by 25-30%.

Be sure to do your research on specific localities and use a local real estate agent to provide a view of the real estate market. You can also get information from municipal web sites.

 

[MikeMcCrae]

I was in Venice Florida early in December and prices have fallen a long way there and the people I talked to were thinking that there was still quite a way to go to bottom. Do extra research the rules are different there. Lots of opportunity so worth while I think.

 

[UTCVenturesLtd]

Hi Everybody,

I have been hearing speculations that gave me the interest in doing some research the idea of buying real estate in the US. To be honest I don`t know where to start, but typing key word on every search engines gave me some insight.

Given the strong Canadian dollar and the slowing down real estate market in the United State...Is it a good time to invest!? It is for sure a time to buy when list prices are going down. The only question is where in the US is the best place to buy.

What do you guy think of the idea?

Jason

AWESOME!!! Here is a link to the Rich Dad... blog... about the USA... for their opinions http://workingwithrichdad.blogspot.com/200...art1-of-5.html

Yes, great exchange rates and also cheaper property! B) Canadians are not the only ones looking at this opportunity! I like destination areas, Orlando, Las Vegas, San Diego, Phoenix myself.

What do you think of the idea to create a U.S. corporation with 26 investors who love to travel to the U.S. and would be shareholders and the corporation`s best clients as well? Each would have the ability to book a two week stay or you would have 26 shareholders which would be like sales people as well to get the property rented out year round... Then the group could go after a 2nd property, then a 3rd and grow!
Dean
[email protected]

 

[Thomas Beyer]

in many US markets prices have fallen .. AND WILL FALL A LOT MORE !!

The key issue is COST of new construction .. and demand ..

So, if it costs $105,000 to build a 2000 sq ft house in Texas, and it sells for about $125,000 then the market is "normal" and will not fall .. likely rise with in-migration demand and inflation !

Florida or Nevada or Phoenix have very similar land and build costs .. but prices in some sub-markets are still WAY WAY higher than that .. say $200,000 to $300,000 ! .. so yes, they dropped 33% from $400,000 to $300,000 due to falling off demand .. but could easily sink another 33% to $200,000 !!

How many 2nd homes do people really need ? In a falling overall housing and stock market (yippie .. TSX down 600 points today .. and likely Dow will be a bloodbath tomorrow after Martin Luther King day opens !!!) .. do people really hurry from New York or Boston or Chicago or California to buy more 2nd homes in Florida or Nevada or Arizona ? Likely the opposite: sell the 2nd home to cover the margin call !

Look at COST of construction .. and you will find that many markets are still overpriced !! (not all, of course, so some bargains start to emerge !!)

 

[JBagorio]

Thanks Guys for all of your informative experiences and ideas. I have already contacted a local realtor in Arizona that is willing to help me out on my research. I will also checkout Florida and do all the necessary do diligent work to choose the right location.

 

[Thomas Beyer]

QUOTE (JNB @ Jan 22 2008, 11:53 AM)
Thanks Guys for all of your informative experiences and ideas. I have already contacted a local realtor in Arizona that is willing to help me out on my research. I will also checkout Florida and do all the necessary do diligent work to choose the right location.






a realtor will be biased .. he will say "buy buy buy .. the prices are rising again .. hurry .." .. why not meet some local builders and ask them ? spedn a week down there and visit some show homes, foreclosure experts and/or mortgage broker .. that may shed a different light on things !



and once you own a new house or condo .. then what ? how will manage it, rent it ? negative cash-flow while you hold .. is this what you want ?

 

[BobHudson]

QUOTE (thomasbeyer2000 @ Jan 21 2008, 08:03 PM)
in many US markets prices have fallen .. AND WILL FALL A LOT MORE !!



The key issue is COST of new construction .. and demand ..



So, if it costs $105,000 to build a 2000 sq ft house in Texas, and it sells for about $125,000 then the market is "normal" and will not fall .. likely rise with in-migration demand and inflation !



Florida or Nevada or Phoenix have very similar land and build costs .. but prices in some sub-markets are still WAY WAY higher than that .. say $200,000 to $300,000 ! .. so yes, they dropped 33% from $400,000 to $300,000 due to falling off demand .. but could easily sink another 33% to $200,000 !!



How many 2nd homes do people really need ? In a falling overall housing and stock market (yippie .. TSX down 600 points today .. and likely Dow will be a bloodbath tomorrow after Martin Luther King day opens !!!) .. do people really hurry from New York or Boston or Chicago or California to buy more 2nd homes in Florida or Nevada or Arizona ? Likely the opposite: sell the 2nd home to cover the margin call !



Look at COST of construction .. and you will find that many markets are still overpriced !! (not all, of course, so some bargains start to emerge !!)






Notwithstanding the comment by Thomas about unbiased real estate agents, the biggest and best in Arizona is Long realty. Read my blog post at http://lease2ownbob.blogspot.com/search?q=sayers

for more information about them.



They have been the best realty firm I have ever come across.

They know Arizona!

 

[JBagorio]

QUOTE (thomasbeyer2000 @ Jan 22 2008, 01:16 PM)
a realtor will be biased .. he will say "buy buy buy .. the prices are rising again .. hurry .." .. why not meet some local builders and ask them ? spedn a week down there and visit some show homes, foreclosure experts and/or mortgage broker .. that may shed a different light on things !



and once you own a new house or condo .. then what ? how will manage it, rent it ? negative cash-flow while you hold .. is this what you want ?






Hi Thomas,



Point well taken...Yes it would be bias if I will solely rely on one source (in this case a realtor). I am and will be utilizing all the means including what you said about visiting the place and see for my self. I am also considering areas in the US that I have leaved in the past since I know them places fist hand.



Exactly the idea, find a place and a property that pass the do diligent system and rent it out with the help of a local property manager.







Thanks again for your inputs guys!

 

[MarkTorgerson]

QUOTE (JNB @ Jan 29 2008, 12:54 PM)
Hi Thomas,



Point well taken...Yes it would be bias if I will solely rely on one source (in this case a realtor). I am and will be utilizing all the means including what you said about visiting the place and see for my self. I am also considering areas in the US that I have leaved in the past since I know them places fist hand.



Exactly the idea, find a place and a property that pass the do diligent system and rent it out with the help of a local property manager.







Thanks again for your inputs guys!




I am also looking at Arizona but will most likely wait another 12 months as I believe the market will drop some more. I have never purchased anything in the US. Do you have to go through a US bank and get a US mortage? Is the qualification process similar to Canada? Any suggestions for resources on the financing end?

Mark

 

[MikeSunley]

QUOTE (thomasbeyer2000 @ Jan 21 2008, 06:03 PM)
Look at COST of construction .. and you will find that many markets are still overpriced !! (not all, of course, so some bargains start to emerge !!)




So how do we determine cost of construction? I'm not trying to be a smart ass; I'm currently looking at a new house in Las Vegas that is well appointed and priced at $110/ft2 [land in]. It seems like a good price but it would be great to know the actual building cost.

 

[UTCVenturesLtd]

QUOTE (Torg @ Jan 30 2008, 09:48 AM)
I am also looking at Arizona but will most likely wait another 12 months as I believe the market will drop some more. I have never purchased anything in the US. Do you have to go through a US bank and get a US mortage? Is the qualification process similar to Canada? Any suggestions for resources on the financing end?

Mark




This website might just be for you... http://www.arizonaforcanadians.com/ I went to one of their seminars. Terry Ritchie was there, a cross border accountant who wrote a few books for Canadian Snowbirds who want to own property in the U.S. I was surprised that most of those putting on the seminar were Canadians! Why not use a U.S. corporation so that everything you do in the U.S, stays in the U.S? I am starting to get several investors who like the idea of using one and renting short term from the corporation which holds the property mostly for vacations and one who wants to stay longer. Nice to be your own best clients and with enough shareholders, you also get salesreps for the corporation as a bonus!

Dean

[email protected]

 

[RebeccaBryan]

I read this thread and thought to myself that we have it all right here in Alberta. It`s like heaven on earth here.

I`ve been looking online lately at some condos/townhouses and there are some really great deals right here in Edmonton. I`m all for keeping it simple or like Don says "boring".

Of course there`s nothing wrong with doing your own research on different areas but hasn`t REIN pretty much told us to invest in Top Ten Towns? There`s a lot of properties on the market to buy here, plenty for all of us and we already know it is supported by strong fundamentals.

Maybe I`m just lazy. It would take hours and hours of research for me to be comforable investing in an area that REIN had not already did the work. What I paid my membership for was for someone else to do this part of the work for me.

And, I`m quickly learning that paying someone to do my property management might not be such a bad idea either!

 

[Thomas Beyer]

QUOTE (MikeSunley @ Jan 30 2008, 10:13 AM)
So how do we determine cost of construction? I'm not trying to be a smart ass; I'm currently looking at a new house in Las Vegas that is well appointed and priced at $110/ft2 [land in]. It seems like a good price but it would be great to know the actual building cost.






that looks like a decent price per sq ft .. but check out the area .. there are some real slums in many US cities .. 3rd world realy in pockets .. so area has to make sense !



ask some local builders .. look at some comps ..

 

[JBagorio]

QUOTE (RebeccaBryan @ Jan 30 2008, 09:52 PM)
I read this thread and thought to myself that we have it all right here in Alberta. It's like heaven on earth here.



I've been looking online lately at some condos/townhouses and there are some really great deals right here in Edmonton. I'm all for keeping it simple or like Don says "boring".



Of course there's nothing wrong with doing your own research on different areas but hasn't REIN pretty much told us to invest in Top Ten Towns? There's a lot of properties on the market to buy here, plenty for all of us and we already know it is supported by strong fundamentals.



Maybe I'm just lazy. It would take hours and hours of research for me to be comforable investing in an area that REIN had not already did the work. What I paid my membership for was for someone else to do this part of the work for me.



And, I'm quickly learning that paying someone to do my property management might not be such a bad idea either!






Hi Rebecca,



We all do agree to keep it boring and use the REIN research as a guideline, but this should not stop us from considering other areas. I've been constantly looking here in AB, but I haven't seen anything in a decent neighborhood (good long term potentials) that passes the 10% or even 9% rule (Income to expense ratio). May be it is about time that we will look else where and possibly have or start a publication such as "The Top 10 Cities in the US" to invest in







Best regards!

 

[Dan_Eisenhauer]

Before investing in an income property in the US, be certain you understand the tax rules as they apply to both Canada and the US. Find a specialist who can give you advice as it relates to both countries. The tax considerations are far from simple.

Also be aware that you CANNOT do one piece of work on your own investment property. That includes collecting rent, or sweeping the sidewalk, etc., without running afoul of US immigration laws. If you are found doing any work on an investment property, it is grounds for immediate detention and deportation, with a lengthy, if not permanent, ban on travel into or through the US.

Learning of some of the intricacies of US investing has soured me on the idea, in spite of opportunities down there.

 

[JBagorio]

QUOTE (Dan_Eisenhauer @ Jan 31 2008, 11:57 AM) Before investing in an income property in the US, be certain you understand the tax rules as they apply to both Canada and the US. Find a specialist who can give you advice as it relates to both countries. The tax considerations are far from simple.

Also be aware that you CANNOT do one piece of work on your own investment property. That includes collecting rent, or sweeping the sidewalk, etc., without running afoul of US immigration laws. If you are found doing any work on an investment property, it is grounds for immediate detention and deportation, with a lengthy, if not permanent, ban on travel into or through the US.

Learning of some of the intricacies of US investing has soured me on the idea, in spite of opportunities down there.


Hi Dan, Just trying to understand...When you say "you CANNOT do one piece of work" do you mean the investor doing work in person, or this applies to a local care givers or property managers as well?

 

[GarthChapman]

QUOTE (Dan_Eisenhauer @ Jan 31 2008, 11:57 AM) Before investing in an income property in the US, be certain you understand the tax rules as they apply to both Canada and the US. Find a specialist who can give you advice as it relates to both countries. The tax considerations are far from simple.

Also be aware that you CANNOT do one piece of work on your own investment property. That includes collecting rent, or sweeping the sidewalk, etc., without running afoul of US immigration laws. If you are found doing any work on an investment property, it is grounds for immediate detention and deportation, with a lengthy, if not permanent, ban on travel into or through the US.

Learning of some of the intricacies of US investing has soured me on the idea, in spite of opportunities down there.

Dan, Can you point me to the regulation about not being able to do any work on one`s investment property?

Thanks in advance

 

[mrembecki]

QUOTE (thomasbeyer2000 @ Jan 21 2008, 08:03 PM) in many US markets prices have fallen .. AND WILL FALL A LOT MORE !!

The key issue is COST of new construction .. and demand ..

So, if it costs $105,000 to build a 2000 sq ft house in Texas, and it sells for about $125,000 then the market is "normal" and will not fall .. likely rise with in-migration demand and inflation !

Florida or Nevada or Phoenix have very similar land and build costs .. but prices in some sub-markets are still WAY WAY higher than that .. say $200,000 to $300,000 ! .. so yes, they dropped 33% from $400,000 to $300,000 due to falling off demand .. but could easily sink another 33% to $200,000 !!

How many 2nd homes do people really need ? In a falling overall housing and stock market (yippie .. TSX down 600 points today .. and likely Dow will be a bloodbath tomorrow after Martin Luther King day opens !!!) .. do people really hurry from New York or Boston or Chicago or California to buy more 2nd homes in Florida or Nevada or Arizona ? Likely the opposite: sell the 2nd home to cover the margin call !

Look at COST of construction .. and you will find that many markets are still overpriced !! (not all, of course, so some bargains start to emerge !!)


I tend to agree with Mr. Beyer`s comments. Recently, there was a survey that came out with 10 cities in the USA that were not experiencing price drops. Binghampton, NY or Reading, PA were two cities on that list that are relatively close to Ontario and that in my opinion would be good long term investments.

 

[Thomas Beyer]

QUOTE (JNB @ Jan 31 2008, 11:03 AM) Hi Rebecca,

... May be it is about time that we will look else where and possibly have or start a publication such as "The Top 10 Cities in the US" to invest in



Best regards!

check out this (Top 25) report on our website :

http://www.prestprop.com/docs/Texas/2008%2...20Millichap.pdf