financing vs. cash purchase

Some of my clients invest in our properties for cash, other's want to use finance.

What does this mean?

does it mean a cash buyer is wealthier? No, course it doesn't...

Our mantra has always and will always be 'to invest in property for high cash flow.'

So if your paying cash for a property that nets you £350 a month, and the property only costs £16k, the return is simply phenominal!

If you use finance to buy the same property your cash flow will be less as you have a mortgage to pay, lets say £200 a month - not bad!

However, your entry costs are massively reduced - by 80% in some cases. Using finance to buy property is a process called gearing in other words maximizing your buying power with your existing capital to buy more property.

Lets do an example with a investment fund of 19k:

Cash purchase:
Purchase Price: £16k
costs to buy £3k
total 19k

Monthly cash flow; £350 (less than 4 years to repay your entire investment capital!


Gearing:
Purchase Price: £16k
costs to buy £3k
Mortgage at 80% LTV (loan to value) deposit; £3200
total £6,200

Monthly cash flow; £200


Using your 19k investment capital you could now buy another 2 properties and increase your cash flow by £400 (£200 per property)

NET income a month = £600

And now you've got appreciation on 3 properties!

That's the power of gearing or leverage...

So what's the conclusion, which method is better?

Well...both! It really all depends on your own personal wealth, your lifestyle, whether or not you want to be a seasoned investor or just buy 1 to leave the kids in later life.

So first figure out what you want, get a calculator and do your sums. If that fails contact us and let us help


Take a look at our listings here

Good luck, Ollie
0845 438 0634

I bought my US dollars this week and saved a packet

If you're thinking of buying property in Buffalo in the next few months
now might be a good time to exchange your pounds for dollars.

Yesterday the dollar spiked around 1.45/£1. It has been fluctuating
around 1.4 for the last 2 months.

Examples:
if you bought $20,000 on Monday this week it would have cost you £14,285
(at $1.4)

Yesterday 20k would have cost you £13,793

A saving of £491.

I bought my dollars yesterday at exactly $1.45.

why invest in US property?

I was talking just this morning with a friend of mine who's recently been made redundant. He's an electrician so it's no suprise really. His father has also been made redundant, both of them are living in the same house. I went round to see them and we spent about an hour talking about the ecomony and where it's all heading. In all the years I've known them it's first time we've had a debate that's not about football!

It got me thinking about the days when I was an employee and I thought financial freedom meant having a good job with benefits that paid well...boy I was wrong!

If we should learn anything at all from 2009 is that regardless of how you earn a living, you cannot rely on others to pay your way. Job security means very little these days, and the more you have, big house, nice cars, etc the harder you fall when things out of your control go wrong...like a country in a recession.

As many of you know I'm a UK landlord as well. All my mortgages here are interest only. Up until a year ago I didn't mind, so long as I get the rent every month i really am not bothered about house prices...that is until now.

With my property in the USA it's different. If I buy on a finance it's a repayment mortgage, after 5 or 10 years I will own the property outright. That feels very good. I am securing my future in a way I simply cannot do here in the UK. I will not be at the mecry of interest rate changes and changes to borrowing criteria. My properties will be mine, all mine.

This is great! I will be the master of my own financial destiny! I can control my property, and whether I get paid my rent on time every month for very little work on my part. I will be at the mercy of noone other than myself.

Next year, when the UK market picks up my plans are to sell as many of my UK properties (assuming I can!) and simply buy as many properties in the US as I can find. I know I will be putting my financial future in safe hands.

If you feel the same way about investing in property for short, medium and long term gains get in touch, contact us

back to basics

I think it's easier to make money if you don't crave it. In my days as an IT consultant I had a very good job and lifestyle working for IBM. I'd earn 40k a year work from home and pretty much suit myself day to day. During this time agencies would call me up every week and try to entice me to leave and go contracting for more money. I resisted for a long time but eventually the lure of 100k+ a year following the work around the world was too much to take and i left the 'day job.'

Strange, I owe that decision to the life I have now despite the fact it was the most unhappy working days I've ever had. My time as a contractor was short lived, my health suffered and my lifestyle was, to put mildly shallow and disfunctional. But like any human, when the back's against the wall that's when we prevail - and I did!

Going back to my 'Rich Dad Poor Dad' books I remembered the 'cash flow quadrant': employee, self employed/contractor, business owner, or investor. I'd now been two: an employee - not for me, and a contractor - nope!

I started investing in property amongst other things and soon realised my passion was rooted in investing for my lifestyle NOW and my future (and hopefully my family's future.)

I promise you this is true: there is no better way to earn a living then waking up every morning and deciding when and where you will work...I could literally be anywhere with an internet connection and a laptop - what an age we live in, I'm so glad I exist in these times. Sometimes I think there is no limit to what can be achieved using technology.

So now I'm here writing this I feel a warm sense of (almost) completness ;-) I don't crave the greenback, but I understand how important it is. I don't work 15 hour days, but I don't mind hard work. I don't work on things I hate doing, but I know sacrifices have to made in life from time to time, and I don't spend hours in the rush hour commute. And, I suppose ironically, I WANT and CAN work until I'm a 100 years old - just because I have the 'choice' to.

So, as far as my plans for my future go, I plan to continue investing in property mostly, but also expanding into other investment vehicles as I learn more every day and become a older, wiser, and better person in all areas of my life.

viva la choice!

who suffers the most from low interest rates?

Who are the people that suffer the most from low interest rates?

Savers.

Interest on your savings is now at a record low at 0.5% and it's likely we'll see this hit 0% before long! who'd have thought....

So the banks are now offerings us pretty much nothing on our money in a volatile market place where we don't feel the banks can be trusted anymore, and as a kicker they charge us disproportionate fees.

So what's the definition of a bank? Honestly, I'm not even sure anymore.

If you want to invest your savings in property with net returns over 20% every year, then use our finding services to source your investment here

or give me a call direct on 07925 420108.

Regards, Ollie
usapropertyinvestor.com

Turning 30 - A day of reflection

Hi all,
I turned 30 yesterday and because of network problems out of my control I was forced to have a day off and reflect. I don't know if it was devine intervention or something, normally I would just work but my girlfriend insists on making it a day all about me - which I can't take for granted, I'm a lucky boy just turned man!

Part of my 'reflecting' was a book I was reading called 'Way of the Turtle.' It's not what you might think. It's a book on technical traders in the financial markets that were nicknamed the turtles because of their unique style of trading. I do trade the markets from time to time, I'm by no means a professional trader - I 'dabble.' The guy telling the story, can't remember his name right now spends most of his time in some form of quarter/mid life crisis. I could relate to this as I think I do to. And I would definately recommend it! I am perceived by my friends as a risk taker, I constantly challenge those around me but mostly challenge myself. I honestly can't ever see me being any other way, my dad is exactly the same. I think it allows me to see and sieze opportunities where others digress and make excuses always trying to mitigate against every single 'what if.' Once you truly understand investing you'll see that you can't do that. You should be diligent, thorough, logical and patient. But then you have to make a decision and this is where most people fail and it remains just a pipe dream.

My heart and my beliefs lie firmly in property investing. The way I see it, as an investor you can look at every investment vehicle on the planet and you can learn to be as clever or as technical as you want and rage against the property machine. The fact is no investment vehicle in the history of the world has performed as consistently as property EVER - Fact. And anyone can do it, seriously, anyone!

This year is on course to be probably the toughest trading year in my life so far. And yet I feel nothing but excitment and enthusiasm. I am definately an eternal optimist! I know already that my earnings this year will be significantly less than any other AND I'll have to work 10 times as hard - and experience more disappointments than any other year. I accept this as the life I chose for myself. Afterall, I'm here sat at home at 9am and my plan for today is to train at the gym and take my brother swimming this afternoon, so not a bad lifestyle really.


Peace out..

Investing in property the only way that makes sense

One of my clients asked me yesterday what the buying process is for owning property in Buffalo. That's the great thing about investing here; US law is based on British law. The similarities are very distinct.

Solicitor is called Attorney
Property is called Real Estate
Completion is called Closing
Letting Agent is called Property Manager
Mortgage is still mortgage
Freehold title is still freehold title

And since we speak the same language and (in many cases) have the same capitist values, it's easy to see why buying here is so easy.

It amazes me why investors struggle to buy in developing countries just because it's in or close to the European Union. I've been there!

My first ever property investment was in Riga, Latvia. Sounded great, and in theory it was. I bought a 2 bedroom off-plan apartment near to the centre of Riga. All the economic indicators said this was gonna be a great investment. In those days I was still learning my trade and invested for (or thought I was investing for) capital growth and NOT cash flow.....big mistake and I don't mind admitting that.

Up and coming countries are excitable and have itchy feet. This means they are more than likely to make fast changes to policy, travel, work, rates, property, planning and everything else you can think of....and their aggresive when they do it to.

My 1-year build time, lasted 18 months and still wasn't completed, I'm not suprised and you shouldn't be either. The Latvian government then forced the banks to stop lending to Foreign investors. This meant I couldnt draw the funds down to complete that I had originally been promised (I use the word promise loosly!) I almost lost my entire deposit after nearly 2 years. Long story short, I sold the property to a Latvian friend of mine for my deposit and and a little extra...I was VERY lucky. I was over there at the time and I know of dozens of people who lost a lot of money!

Since then, I only invest in established markets, tried and tested. I don't invest for capital growth - if it happens, great - if it doesn't so what! I invest for passive income, cash flow.

Property investing should be simply: what is the NET yield on this property that I buy: (annual rent - expenses/purchase price)

rule of thumb: Buy low, with high yield.

Through the nineties in the UK this was the only way property investor's got rich. This is still the only way to do it...except now it's in the USA.

How many properties a year should you buy?

Answer: As many as you can. Then repeat.

My goal for this year is to buy 6 properties, each one cash positive. Half for cash, and the other mortgaged over 5 years. I know that the cash flow from all 6 will be good. The cash owned properties will bring me fantastic monthly profit, at least £250 a month. The other 3 around £100 a month.

In 5 years time I will own them all outright, thats 6 *£250 (minimum) = £1500 a month. Not bad eh!

For those who don't know, I own property here in the UK as well from when times were good. When I get the chance to sell them, I'll be spending my profits on buying more proprty in the USA as well.

You can see a list of our featured properties at our website here:Listings

Refurbishment properties in Buffalo

I love em!

150% increase in value after the refurbishment! that's quite a statement to make!

However, there are two main factors for this:

1. Mortgages for properties under $50,000 are almost non-existant
2. Mortgages for refurbishment properties are non-existant.

Both these factors alone drives the price down to the bottom. The only people left to buy are the truly cash rich individuals and this means that absolute bargain properties are their for the taking.

Take this example:
Property purchased for $20,000
Recently assessed at $35,000
Refurbished by us for $12,500

Re-assessed at $50,000

Increase in capital value of 150% on purchase price
OR 35% increase if you include your refurb costs.

If you decided to flip the property, you could turn a quick profit of $17,500 (less legals.) Then do it all over again and again!

I find properties for my clients like this on a regular basis, check this one out here

Are you an 'out of the box thinker?'

We are all programmed to think that ourmoney is safe in the bank –
this is necessary for the banks and in fact governments to prosper. But
has this recession taught us anything orwill it all be forgotten (and
forgiven) in a few yearsfrom now?

I hope not! I believe the next few years could bring awhole new ere of
‘out of the box’ thinkers andentrepreneurs, regular people who take a
bullish approach tothe conventional ways of making money.

Even at my tender age (I’m 29 by theway) I remember when I left school
my mother would tell me to find a good job that offers stability andgood
pay. The idea that you mightactually enjoy what you do seemed completely
irrelevant . We’ve seen this mind set shift in recentyears, even my
mother has concededthat being happy in your work is now areal priority. A
new ere of workingclass has emerged thatdemand not just high salaries but
abalance between work and lifestyle is equally important.

What changes will you be making thisyear? Will you be taking advantage
ofthese weaker times while the masses bury their heads in the sandhoping
it’ll all be over soon.

I hope you are an 'out of the box thinker'too.

Contact us about building a portfolio and let us help you on the path to financial freedom.

Kind Regards

Ollie

Property Management on steroids - I'm really excited about this!

Property Management is in my experience the biggest hurdle in overseas
property investing. Get it wrong and you have permanent hangover- but get
it right and you're flying!

We've been testing a new concept we hope to launch later this year for our
clients new and old. A property management solution on steroids!

A website where your tenant can go and make a payment or report a problem.
This means no managment fees to pay! You only have to pay for something
when it happens.

Here's how it'll work:

Tenant wants to make a payment or report a problem. They go to our
website, enter the details and a reference number. This gets sent to our
property management response team and automatically forwarded to you via
email.

If it's a fault, then you have the opportunity to either deal with this
yourself directly. In other words call/email us and we will instruct our
contractors to deal with it.

Alternatively, we can deal with the problem fully on your behalf. We just
agree the terms with you before we start.

The reason for this is simple. No more monthly management fees to pay.
If there's nothing to do - then there's nothing to pay. simple!

This solution really closes the gap on owning property overseas. Now we
can make investing as seamless as possible!

I'm so glad we will be able to offer a service like this. Although I have
relied heavily on Management companies over the years, I have made no
secret that I don't really see traditional management companies as a viable
solution simply because of the volume of properties needed to make it a
profitable business.

This is why we have our very own in-house property manager who takes care
of our clients' properties ONLY. Nothing else. And when we introduce this
service as well, we will really show the other property management
companies how it's done!

I'd like to hear from you about this. Is this a service you would be
happy using?

Drop me an email, I'd love to hear any comments/suggesstions on this
subject, email: ollie@usapropertyinvestor.co.uk

Kind Regards

Ollie

Rental demand in Buffalo

I get asked a lot about the rental market in Buffalo and whether the market for rentals is strong. Clients have asked me that if property is so cheap then why do people rent?

Owning property is a very British way of life. Not every society sees ownership as a mark of personal success. And in current times more and more people are adjusting to renting as well. In fact I have spoken to quite a number of renters in the UK that say they will never own again. Anyone that has been on the wrong side of a mortgage company will usually agree with this.

Renting in Buffalo and right across Western New york is simply the done thing. Ownership costs are considered high for owner-occupiers and with the success of the Section 8 program, it would be hard to justify owning if you could have your rent paid by the state. It's also not that easy for lower income families to get a mortgage and even harder in today's market.

Have you got the propety bug?

I have. When I bought my first property, this was actually a UK property
a few years ago when yields made sense. All I could think of was if this
property earns me £100 a month, then how many of these little 'bits' do I
need before I can give up the day job. That is all I thought about, and
quite frankly all I cared about.

To be honest, in many ways not much has changed for me. I believe
wholeheartedly in wealth creation and passive income through property.
Every property I buy in the US brings me closer and closer to my goal.

The hardest challenge I have in my quest is a personal demon called
'impatience.' This is one of the biggest challenges any property investor
faces. Learning to be patient is a must in this business.

Learning to take bite size chunks, methodically, and consistently will
keep you steady and calm and enable you to see opportunites when they are
presented while others run around like headless chickens.

My advice, write down you goals, shoot for the stars - why not! but make
sure you put a timescale on it. and STICK TO THEM. Property investing is
simply the most consistent investment vehicle in the history of the world -
nothing else comes even close to the returns and possibilites we have with
property.

..Long may it continue.

Ollie

BOE drops interest rates to 1% - is this good for us or bad?

Here it is! I think we all new this would happen, the BOE has dropped its
rates again another .5% to 1%.

What does this mean for us? If you're thinking about investing in
property now is the right time. The banks are not offering interest rates
worthy of your savings.

Buy property in Western New York and get double digit yields, and with capital
appreciation on target for another 5-6% this year - this is the definition
of 'making your money work harder.'

It's no big surprise that if your own economy is crumbling, then you look
elsewhere to shelter your money.

Read the full story here: http://www.comproperty.com/news-story.php?id=1957


Ollie