Saturday, August 16, 2008

Investment Property Bargains in the USA?

With the US dollar looking like it will soon compete with the Mugabe Zim dollar for the "Most number of zeros on my currency award", What are the realities, dangers and prospects of buying into US Real Estate?

It isn't as easy as it used to be for foreigners to get a US mortgage any more, and only a few companies will provide quotes for anywhere outside Florida, one particularly efficient company for this is Fidentia. They cover most of the states although they do need specifics and don't offer an online quote engine due to the extensive variables.

Buying property itself? Well this is another mine field altogether. In the USA they have various collaboration tools and schemes. REALTOR.com is the arguably the largest, it is a tool enabling agents to share all their listings all over the place, the draw back to this though is that it can be very out of date, and whilst there is a lot of legislation on the USA for being an agent or realtor, it still would appear that anyone can sell a house if they want to. REALTOR.com has some 3 million listings country wide, what they don't tell you is that these listings are supplied by over 1 million agents. What that means to you and I is a lot of people that don't update the system!

There are a few other techno systems for site owners, one being IDX and a few others under construction at the moment, the key thing is though is that as much as every agent can say they have access to millions of listings for sale, there is a good chance only 3 are actually theirs, which may well be out of date!

There is though a new breed of agent outside the USA selling property there now. Admittedly only for investors, but nonetheless, they are supplying a well researched source of US properties that do actually make investment sense.

Colossal Property Investments

When you first enter their site, it all seems just a little too good to be true. A 3 bed detached house in New York for 12k Euro? Freehold? With rental income? And a Profit? sounds like madness! After roaming through the site though it is clear to see these guys are doing their homework and leaving no stone unturned, calculating every last little thing down to the nickle

American Dream Investments

Admittedly the site could do with a tidy up, but here we see a similar set up, with properties also in New York at fantastic prices (Starting from around £20k) The site quotes gross rental yield in this case, so would suggest calculating all the net figures to ensure their is a profit in place, but all in all, both companies whilst niche in their fields seem to have found the point in the market place where even the smallest of investors can make money relatively easily in a struggling market.

There are some developers out there also that have decided to walk away from developing at the moment if they can and diverting their efforts into buying up the last 25% or so of other developments at a discount, repackaging and moving on. It makes use of their cash, ensures a discount in the first place, and keeps the money working for them whilst making a profit in the process.

There are those of course still pushing out deals direct from developer, beware! Ask yourself, will the developer be able to finish the project? Do they have the money to get through? It might be next to Sea World but I don't see Shamu the Killer Whale helping out developers or Mickey Mouse paying any mortgages.

With the exchange rate the way it is, there are some serious bargains to be found in the US, just look very carefully. The exchange rate is likely to get worse before it gets better, so either keep your cash gained in the US, or at least in USD.

An old adage that so often rings true, "The first profit is always the best, regardless of the size."

6 comments:

Anonymous said...

I looked at both companies websites Colossal Property and American Dream Investments and wonder if they are the same company. Both are based out of Spain and in th FAQ section of ADI there is a note that "We, at Colossal Property Investments, will introduce you to our Insurance Agent" so either they plageurised poorly or are one and the same.

donald said...

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Betty


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Anonymous said...

Has anyone actually bought from Colossal Property Investments? I dont want to be buying something that doesn't exist.

alaina said...

To be a successful investor, you need the facts to find the property that is right for you. Better choose the best property sunshine coast that would suit you. Be wiser.

Student Property Investment said...

These look like interesting investment opportunities which I'm going to explore further, thanks for highlighting them

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