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We've warned about investing in US property on endless occasions.It seems that the lure of massive returns and a hassle free investment doesn't sound too good to be true to !!!???! ( it always does to me .) Some people just want to believe and continue to queue up and handover thousands of their well earned pounds on the promise of some slime ball agent will make them a fortune.
Wake up you morons! Please!
A few years back the same schmaltzy rip off merchants moved their act from the UK and the 'developing European states' over to the middle pointless bit of America. ( the bit between NY and LA ). The greasy palmed property investment agents kept pushing places like Atlanta and Detroit and were offering 'big houses' for about £25,000. To a lot of highly gullible Brits, £25,000 seemed very cheap for a 'big house' and they handed over their life savings and felt like they'd got themselves a bargain.
Someone should of really asked them the question.
Have you ever been there?
I'm guessing most hadn't, and in many ways for those middle class socialist investors, you know the doctors/teacher types who wanted to boost their pensions they probably liked the fact that they couldn't even picture the area. Out of sight out of mind so to speak. They wouldn't have to think of themselves as ruthless opportunistic property moguls praying on the poor and unfortunate if they'd never smelt the deprivation and touched the grime of the poverty.
So what happened?
This is Money has uncovered and outlined some interesting realities of these 'realty investments', including an interesting one about one investor who bought a £28,500 house in 2010 via Assetz investment agents, who charged her a £2350 'finders fee'. Since buying the investor reckons they have forked out a further £4000 in tax and £4000 in repairs.
What its worth now you may ask?
Well according to a local estate agent a house on the same street has recently sold for £800, that's right £800. Now that sounds cheap for a house!
Read the This is Money article here
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4 comments:
watching the Detroit ghetto videos on utube is certainly an eye opener
A few years ago I took a fact find trip to NY state - Buffalo, Rochester, Syracuse and found myself being offered deprived or drug infested properties by local brokers. 30% gross yields sounds fantastic - until I found I'd be lucky to net 10% after the endless move of non-paying tenants from 1 place to the one NEXT DOOR! That's how bad. While witnessing one eviction attemp the Police officer in attendance advised me to save my money - my fact find was done!!
Thanks anonymous. Sounds like it was worth the price of the ticket.
Improbable yields usually are.
Hi. I'm not a member, so I may come up as 'anonymous' but I am happy to tell you my name, David. To be honest, the only reason I haven't joined is because you can find yourself joining so much stuff,and everyone wants a different kind of password and so forth, and then you never hear from anyone ever again!
Mine is a story about DETROIT, and it has a happy outcome.
Last year I approached a company called Experience International, based in Bournemouth but with an office address in Trafalgar Square in London, on the subject of property investments in Detroit. They gave me some brochures for a variety of houses that varied between £25k - £45k. I decided to go to Detroit myself to see some of these houses in person. E/I were quite happy for me to do that, and arranged for someone from their Detroit office to meet me at my hotel. From there, things deteriorated steeply. I was taken to a rag-tag selection of really, really, really badly refurbished houses. The workers in them appeared to be homeless men from nearby shelters, painting woodwork that hadn't even been sanded down or cleaned, laying carpets on floors that hadn't even been swept, working in houses with no water or electricity, still boarded up with broken windows and gardens strewn with abandoned rubbish.
I decided NOT to deal with them, and from all the bad press I've seen since, that was a very wise decision.
However, I did then go on to identify some other houses for sale and made enquiries through local real-estate agents, who were only too happy to show me around lots of interesting property. I located an amazing 6 bedroom, 6 bathroom, 4 reception room 'ranch' (bungalow) with a swimming pool and a triple garage and one bedroom staff quarters in a very manicured, desirable street. It was a boarded up repossession, needing minor cosmetic work, for $37,000! (that's about £24,000) That got me very interested in what I could buy independently, and although I didn't buy that one in the end, I did buy a gorgeous 4 bedroom/4 bathroom detached house in half an acre closeby, also a delightful, fully occupied street, for £17,000. It needed modernisation, which cost a further $23,000 or so, and before the refurbishment was even completed, I was contacted by a friend of one of the contractors, a professional woman and her family, who wanted to rent the house for $950 p/m. I could probably have asked for $1000 - $1100, but she was the instant 'bird in the hand' with rent from Day One, so I decided to run with her. So far, it's been a good experience. Maybe more work and more risk than some people want to do, but as a full-time professional landlord with property around the UK, it was fairly straightforward for me.
Anyway - to the conclusion. I'm going back to Detroit on 20th August to look at more property. If anyone on this blog has any property in Detroit that they would like me to go and check on for them, either before they buy it or if they already own it, I would be happy to go and do an inspection video or take pictures. I'll charge a fee of £100 to do that, and return with a comprehensive report about the house, street, the suburb, the area, what's around it, behind it, opposite it, if it has any obvious issues like a derelict house next door or cracks in the walls, trees too close, etc etc. If you arrange it with the Agent I'll go inside and photograph every room and any obvious issues or defects, or just do as much as I can from outside.
If you are interested, please answer on here first of all, and then I will publish my contact details.
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