Are Canadians Investing in U.S. Real Estate using the best strategy?

Ready-Fire-Aim?

Is the time right for Canadians Investing in U.S. Real Estate? We all have heard there are great deals down south. There are certainly lots of  US foreclosures to pick from, but you have to wade through alot of “you know what” in order to find the gems.

The fact is, there are good deals in bad areas, good deals in OK areas and great deals in great areas. We of course key in on the latter as do others who also recognize the deal.

As a  Canadian Investing in U.S. Real Estate, it is vital that you are working with people you can trust who are on the ground in the city or cities you wish to buy property. Unless you plan on living in that particular city, we highly recommend a buying team as opposed to working with a realtor. Nothing at all against realtors, but when buying from a distance or in unfamiliar territory (like another country) a buying group  will save you tons of time, money and will provide much more piece of mind.

Back in early 2009 when the meltdown was happening, we saw an opportunity that was second to none. The realization that property would never be as inexpensive as this again was certainly worth investigating. After going through many months of research which included tons of statistics, fact finding trips to a number of cities, we saw the best opportunity for us was Phoenix.

We began creating a team and made some purchases. These purchases were making us money and the fact that the prices were so low allowed us to make mistakes that didn’t allow us to lose money…only make less.  so we were learning and still making money…good deal. we also learned about team members and what they will or will not do in the end for you. The most significant lesson we learned is unless there is a huge commission, most realtors will not do ANYTHING extra for you.

US realtors, for the most part are different than in Canada. number one, the training they have had to take is significantly less than for Canadians. During the US housing  boom, people with other vocations would take a couple of weekends of training and become realtors. They didn’t have to do much to sell properties in the boom as they were “flying off the shelves.”. Now the climate is different and most “realtors” have gone back the their previous vocations. Many that remain have held on to that work ethic they had during the boom. The ones that do work are hard to find but fantastic. However there is only so much a realtor can do for you- even by law– when buying from a distance.

For Canadians investing in U.S. real estate, this is where a buying team becomes your best choice for saving time, money and being assured you are getting the type of property you want. To find out more about the difference between realtors and buying groups please read Realtor Restraints.

After 2 years of working with various team members, we have created a team that is second to none. The key members for the purpose of this article are the bank connections and professional bidders we use. Through these connections we are able to secure properties at prices FAR below a comparable MLS listed property. We pass this team onto people who use our buying team.

There is naturally competition for those great deals, so one has to be ready to strike while the iron is hot and make that offer bid when the property becomes available. This allows us to “tie up the property” which then allows us to our inspection and further due diligence.

The Process…Ready?

In order to be successful in our bidding process on your behalf, you need to be READY:

For you to be READY, we require the following:

a)      Proof of funds- a bank statement showing the amount of cash needed for your purchase or if you are getting financing…

b)      A loan status report (LSR) which is a basic pre-approval from a US lender. This takes longer to get, so you really have to get this going ahead of time, although the balance of the purchase price isn’t needed until 30 days after the inspection is done;

c)       a signed service agreement with our buying team

d)      a $5000.00 USD deposit which is held in escrow in order to use as an earnest money deposit to tie up the property (it is fully refundable if after the inspection is done, you decide to not go through with the deal)

e)      the name we will use to make the offer (can be your name or a company name)

f)       optional: a company set up and bank account

Now you are READY we have the ammunition to FIRE!

Fire!

When a great deal comes up we want to be able to FIRE out that offer within 24 hours so we have it under contract.  You will be emailed the  purchase and sale contract for you initials and signature (which is done electronically) and you email it back. We then present it and get it accepted.  At this point we can AIM.

We AIM to please!

To AIM is to perform our due diligence, our research and do our inspection during the 10 days the property is under contract.

Once we are both satisfied with the due diligence, we help you with the closing, repairs if needed, the tenanting if needed and get the management team in place as per our service agreement, and continue to macro manage the team as you sit back and make money!

If you would like more information on how to get involved in buying US real estate,
email me at info@propertyprohets.ca.

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Canadians Investing in U.S. Real Estate