What should Australians look for in US property?
Jason Simpson: Well investing in the US is very tricky. Most Australians are familiar with how the Australian market works. However, when you look into a US market or any international market, we aren’t familiar with how to source the data and how to protect ourselves. And too often investors lose their shirt for want of a better word and they can lose hundreds of thousands of dollars.
Our company is there to protect investors from making those bad decisions and we inform them with the information on how to do those check lists and how to qualify a home, either themselves or working with our company. Either way we just want to protect investors and ensure they get the best value for money in the US market.
What should Aussie investors know about financing US property?
Jason Simpson: Look there is really only thing to do about finance in the US. Traditional finance isn’t out there. There is a lot of people that spruik that finance is available but I say to any of those guys, show me a bank that will give you traditional finance at 4%, which is what the US interest rate is at the moment. It’s just not out there. 14%, maybe 16%, hard money with a 5 year balloon. Australian investors don’t want to get into that. They really don’t.
You need to be either using your self managed super fund, which based on independent advice you can invest in the US market doing that or use equity in your own home or another investment property that you might have or pool those few dollars that you might have under your mattress at home and have a crack. I mean, look this can set you up for long term return in both equity and cash flow, but also be very very careful of those people that promote finance with a home attached to it.
You wouldn’t see that in a large national Australian bank, selling you a loan one minute, then giving you a home the next minute. Always get your home independent of any finance. I just have to stress that because there are people in the market that will sell you a flipped home for a hundred grand that’s only worth 25,000. But they get you on the hook of finance and you end up in a lot of trouble.