It’s no secret the current U.S. property market holds immense upside potential for investors looking for instant equity and strong positive cash flow. With so much potential, however, comes a great number of less-than-reputable “professionals” who are only out to take a chunk of your money through the promise of creating wealth.
Blogger: Jason Simpson, Cash Flow Gold
But have no fear: By following the five steps listed below, you could save tens of thousands of dollars on just one purchase.
1. Obtain the full property address
This may sound silly, but I know there are at least 10 sellers out there right now, at this very moment, listing homes without disclosing the address. This is because you could Google the address and see what it was recently purchased for. Real Estate website in the US like Zillow, Trulia or Redfin provide sales history. This simple search may show a significant gap in price between the seller purchased the property for and what you may buy it for now. The different could be a potential 50K profit margin for the seller.
2. Find out who owns the home
More often than not, buying through a wholesaler or agent reflects the fact that the asset is held by a large U.S. Company. These companies will spread commissions around to various agents, which is ultimately reflected in the price the investor pays. In other words; if the property is owned by a company, keep looking. Otherwise, you’ll just be throwing money out the window.
3. Stay away from conflicting services
Never buy a home from a company or individual who offers additional related services, such as loans, as this is a major conflict of interest. You won’t see this occurring in the Australian property market, so by default, you should also avoid it in the US market.
If you want US finance as scarce as it is, seek this independent of any property purchase.
4. Due diligence, and full disclosure
If you decide to purchase a fully renovated home, be sure to ask for pictures and videos that show the before and after. This helps to ensure they completed the work and correctly, also making sure the repairs are adequate.
Note: Renovated homes typically carry a huge profit margin for the seller, so it’s important that you complete extensive research on the local market using sites such as www.city-data.com, using the postcode as your reference. With this said, it’s always preferable to have someone you trust to either drive by the home, or better yet, get over there yourself. I mean really, who couldn’t use a weeks’ vacation that could potentially pay for itself many times over? With the strong dollar, it won’t be a lot to pay for piece of mind.
5. Large Seminars
Throughout the years, I’ve seen my fair share of these hard-sell “seminars,” as well as some of their casualties throughout the months that follow. It’s certainly unfortunate, but it’s also something that can be avoided.
The first thing you should know is that you don’t need to overcomplicate the processes of buying U.S. investment real estate. If you attend one of these seminars, they’ll tell you a hundred horror stories and confuse you with jargon, which is the only way they can convince investors to participate in their programs, which conveniently cost thousands of dollars.
A few years ago I was going to participate in one of these seminars. I was told that in order to participate, I would need to provide the seminar organisers with a $6,000 kick back for each sale I made. My service fee was only half this amount to begin with. I was shocked that this was even asked and has made me wary ever since.
This simple fact is this: Real estate investing is a massive industry, worth hundreds of millions of dollars. And since it’s your money, you should always demand transparency, accountability and integrity. You have that right. After all, just because a home is currently listed for $75,000 doesn’t mean it wasn’t purchased for $15,000 three months prior.
Using the above steps, you’ll have some powerful tools to help generate equity and strong passive income in your U.S. investment property, while steering clear of shady operators.
About Jason Simpson
I started my back journey back in 2007 when I became very clear for me that there had to be more to life than going around in circles not getting anywhere. Regardless of what I earned form the 9 to 5 I always seem to spend it just as fast as it came in! I started reading a few books to get the knowledge I needed to break this cycle and purchased my first two homes in the USA for cash flow.
It was a disaster I quickly learned the term flipping and how rife it was through Australian resellers, I guess I was lucky I only lost 60k (donated the homes to charity) but more importantly after that experience and a lot more investigating I saw that there was a spot in the US property market to assist investors the right way and help them avoid the scams and flipped properties by buying direct from the Banks.
I stared Cash Flow Gold which has taken me into full time employment assisting investors from around the world to gain the maximum from their purchase. I now directly employ 6 staff here in Australia primarily in customer support and indirectly 40 personal across seven states in America.