Looking for Investment Property - Tenanted in Buffalo (New York, Cheektowaga: mortgage, lawyer)

[The Stig]

Hi all,

I am looking for houses or flats under $40k that hopefully will be located in a good part of town, not sure if Elmwood would fall under this price range.

Ideally a property that is tenanted with a long term tenant and strong rental income.

I am a buyer from the UK so I would need a US lawyer to act as power of attorney and I need to know all the taxes I will have to pay on the purchase and ongoing. I am a cash buyer but I will look to remortgage the property at some point.

Finally, I need a house or flat in good repair that wont have any unexpected rennovation costs after a few months.

Hope you can help.

[CAugust]

I just did a quick search for you and found about 66 properties with at least 2 units in each - of course some of them would need to be weeded out - the listings go up to 50k, when i buyer lists, normally they dont expect to get the actual list price.

I must warn you however there has been a scam alert issued through craigs list on postings very similair, so if you dont get responses, that is why

Good Luck in your home search
Colleen

[Genghis]

You'd probably have to go over 40K to get the kind of house you're looking for. There are plenty of decent houses in the city, but many of the really cheap ones you see online have issues you'd probably not want to have to deal with.

[The Stig]

Whats the scam alert? I'm genuinely looking for property and I need a decent contact in the US. How does the house offer process work in the US?

[CAugust]

Originally Posted by The Stig

Whats the scam alert? I'm genuinely looking for property and I need a decent contact in the US. How does the house offer process work in the US?

You get approved formally from a banking institution for a speciific amount of money, that shows the seller you can pay for what you are offering for the house. Once you have that, you put in offers on your home usually through a real estate agent, but you can do it yourself and then the process begins, if the seller accepts the offer, you give a deposit and sign papers, retain a lawyer and be on your merry way - its a good thing to have a home inspection done so you dont have any surprises later - usually if you have cash or quick financing the home is yours within a few months at the latest. You will need a management company to manage your properties since you dont live locally, there are a few of them here that can help you with your properties.

Colleen

[The Stig]

Great, that's pretty much the same as the UK. There will be a lot of interest over the coming months from British investors mainly due to the pound being so strong over the dollar and the fact that our interest rates are making it even more difficult to make money from buy to let property.

Gone are the days of sitting on property purely for capital growth in the UK. However in the US you get the best of both worlds - potential for capital growth in certain areas and strong cash flow.

Hopefully it will be acceptable to provide proof of my funds with a letter from my UK bank and I will need to open a US bank account to receive the rent. Will this will be easy to do even though I'm not a resident?

[CAugust]

Originally Posted by The Stig

Hopefully it will be acceptable to provide proof of my funds with a letter from my UK bank and I will need to open a US bank account to receive the rent. Will this will be easy to do even though I'm not a resident?

Are you paying in full with cash? if so, then that statement should probably work for you, however if you are getting a mortgage, a simple statement from the bank wont do it, you will need to be fully qualified for a mortgage in said amount. Many times in the past, people would sign a contract for a home, the seller accepted and then they could not get the mortgage, so the deal fell through. I would say 99.9% of sellers wont even consider an offer from anyone (especially in this market) unless the potential buyer has verified he or she has the cash or has been formally qualified from a bank or lending institution. As far as opening a banking account, I would check with a management company in Buffalo to see how they go about it, They would be collecting the rent for you, maintaining the properties and charging you obviously a fee to do so, however being out of the area, there are no other options. Once you contact one, ask them about this - perhaps they cut you a monthly check and wire it to you? I imagine there are quite a few options after you actually own the property. How are you going to determine what to purchase and what not to purchase? I am curious in repsect to this.

Also, your funds in your bank account prior to closing would need to be in the US bank accounts weeks if not months prior to finalization. The funds have to be cleared and it takes more than a few days when you are dealing between two countries.

Sadly, many folks have been scammed with outside checks outside sent from outside the country - they deposit them in their accounts, only to realize that the funds really werent there to begin with - in regard to the craigs list scam aler I referrred to previously, here is the email that I recieved however, I was mistaken, it was not from craigs list, it was from a real estate site that I subscribe to that sells and lists homes.....just an fyi for all......obviously this does not apply to everyone looking to purchase out of the country, your infomation of the pound and the dollar makes sense.....


Sellers, YOU MAY HAVE ALREADY RECEIVED THIS EMAIL OR YOU WILL RECEIVE IT SOON -- IT IS MOST LIKELY A SCAM.

The email begins like this or very similar:

From: Natalie Beckwith
Email: natalie.beck07@hotmail.com
Hello, Would love to acquire this property. I intend to employ the service of a lawyer for the purchase because i am currently in London,UK.The transaction will be handled by the attorney. He will come to inspect the property.......................................... ......

Thanks,

[The Stig]

I'm really sorry to hear that this is going on, I am a genuine buyer and looking to pay cash. Surely a good lawyer can hold on to the money and verify it before it clears and then pay the seller?

For me, my main criteria really are as simple as:

• The property must be in good condition
• Good area, location in New York Buffalo
• Strong Rental demand or currently tenanted at a good rent
• Below $40k

Basically I use the yield calculation method to determine a good rental property:

Property rent x 12 months / property price = yield%

So a typical deal I have seen would be a property at $40,000 with a monthly rental of $800 to give a yield of 24%.

In the UK our property is so high at the moment we can only get yields of 4,5,6,7% and net profit of around £50 ($100) per month. Buying in the US will give UK investors around £150 - 200 ($300 - $400) per month after all taxes.

I have seen many properties advertised with similar returns like this through UK companies but they charge sourcing fees of up to £3,000 ($6,000) for managing the purchase!!

[CAugust]

How many properties are you looking to purchase? If its a full cash deal, I dont see why it cant work?
Colleen

[The Stig]

Just the one property i'm looking for. I have had an opportunity come up in Cheektowaga, is this a decent area?

I have been given the following information:

Estimated Taxes: $2383
Stories: 2
Fully tenanted
Trendy Area
Separate Utilities
Separate Entrances
Harwood Floors, Natural Trims

Unit 1
Monthly rent: $500
Security deposit: $500
Tenancy type: Month to Month

2 bedrooms, Kitchen, dining room, living room, bathroom

Unit 2
Monthly rent: $475
Security deposit: $475
Tenancy type: Month to Month

2 bedrooms, Kitchen, dining room, living room, bathroom

What type of property would you call this? A double two family house?