Posts Tagged ‘us’

Risks of investing?

Written by Alan Findlay on . Posted in Investor Insight

Someone asked me the other day – ok Alan, if I should be looking at about 15% return plus capital growth, there MUST be some risk involved there. What are those risks?

So I thought I’d share my thoughts on this with you.

1. Management
Good management is the overriding factor in making the difference between a successful investment and a bad one. Having bad or ineffective management of the property leads to the downward spiral of the house falling into bad repair, leading to lower quality tenants (good tenants wouldn’t want a run down house) and often ends up with an empty unlettable house and a large renovation bill. Always mitigate this risk and use a reputable recommended management company.

2. Condition
When you buy the house, unless you’re a handyman and live locally, always try to get something recently renovated. This gives you a headache free income, and fewer headaches for the tenants. Key things to look at are the roof, and the boiler/heating/water system.

3. Tenant quality
Tenant quality has a lot to do with what you buy and where, but it pays to try to avoid bad tenants. Having good management and a house in good condition will give the agents a wider range of choices re tenants and lessen the risk that your tenants will be non-payers/messy/causing damage. If you are concerned about the quality of an existing tenant, it is possible to take out insurance to mitigate risks like tenant vandalism and even non-payment.

4. Location
The location of where you buy is a big risk factor in your investment. Of course the cheaper the house and higher the yield, in theory this should mean the riskier the location. Stick to cities with positive economic dynamics, and avoid the very worst areas unless you plan to buy every house in that neighbourhood. Look for locations near to the usual nodes like transport and employment centres, and also nearby to more upscale areas, to win from possible gentrification, and improvement in tenant quality that comes from this. In Hackney, London for example my tenants changed in ten years from being mainly DHSS (government welfare funded) tenants to upwardly mobile professional people, as the transport improved and the area gentrified.

5. Legals
I’ve seen situations before where a buyer uses the cheapest lawyer, or none at all in a transaction. While it may work out quite ok, its often worthwhile trying to simply find a reliable and efficient one, who you know has made all contracts correctly. Strange although it may seem, I’ve seen situations where the buyers lawyer forgot to check the water bills were paid, and after closing the new buyer was obliged to pay the back bill of several hundred dollars! In short, use a lawyer, and preferably one recommended by someone you trust.

I have just outlined the main technical risks that will be in your control that you will be taking when investing in real estate. As you can see there are numerous ways of mitigating those. I always recommend a good attorney, and a good management team who I’ve used for years positively. There are also however many risks that are out of your control – Political risk, currency risk, and also ‘black swans’ connected to those – what if Canada attacks USA? Well I wouldn’t worry too much on that…

Buffalo Property Transactions in May Week 3

Written by Alan Findlay on . Posted in Members Only

Buffalo real estate transactions over $5,000 as listed in records of the Erie County clerk’s office for the week ending May 21.

Highest price: $990,000 Average price: $123,047 Median price: $58,625

Number of Sales: 42

• 200 Delaware Ave., Delaware Uniquest Llc to Phillip A. Baum, $990,000.

• 270&281&303 Central&1438 Bailey, BSM-DE Inc. to 25 Depot Street Inc., $684,432.

• 132 Lakefront Blvd., Unit 703, 1094 Group Llc to Scott R. Brown, $554,587.

• 208 Rivermist, Rosemary A. Villarini to Steven Schwartz; Susan G. Pardo, $425,000.

• 2724 Bailey Ave., Edward Simon to 2649 Bailey Avenue Llc, $318,750.

• 599 Parkside Ave., Terri Schickling to Robert B. Moynihan; Rebekah R. Lutkoff, $222,500.

• 186 Chapin Parkway, Steven Schwartz to Alfred L. Frost III, $175,000.

•94 University Ave., Keilka M. Salsbury to Donna Rautenstrauch, $165,000.

•448 Voorhees Ave., Hugh M. Favor to Luan-Feng Chiu; Darryl J. Dilliot, $140,250.

• 307 Saranac Ave., Bernice Mundier; Sandra J. Piwko; Robert W. Mundier; Lawrence R. Mundier; William A. Mundier to Corrie A. Bailey, $109,180.

• 162 Choate Ave., Nancy A. Connolly to Jon E. Selig; Beth L. Selig, $90,000.

• 259 St. Lawrence Ave., Tara Brennan to Christopher J. Chimera, $90,000.

• 286 Ludington St., Geno Castricone to Fannie Mae, $86,464.

• 126 Ridgewood Road, Michele L. Sitarski; Donald M. Sitarski to Jody L. Bantle, $84,640.

• 24 Pickford Ave., Thomas J. Morrissey to Stephen Coppola; Jean Coppola, $79,900.

• 74 Russell Ave., Jacques Morin to Scott A. Hannon, $76,000.

•65 Northrup Place, Ginger D. Schroeder; Richard P. Amico to Elizabeth Cunningham; Danny G. Dunn Barbara J. Dunn, $73,000.

• 202 Minnesota, Liping Guo; Yan Chen to Richard Parke; Paula J. Parke, $72,000.

• 131 Duerstein St., Lynn A. Krakowiak; Arthur R. Krakowiak to Matthew V. Van Hauwaert, $67,900.

• 1065 Grant St., Dorothy M. Goretti Family to Leseneka Property Management Llc, $60,000.

• 233 Blaine, Thomas P. Malecki; Matthew T. Malecki to Matthew D. Chase, $59,750.

•45 Tyler St., Jorge J. E. Gracia to Tyler Properties Llc, $57,500.

• 58 Monticello Place, Leola Jones to George Washington, $53,000.

•62 Eastwood Place, Thomas M. Krol; Frank V. Balon to Frank V. Balon, $48,673.

• 29 Hedley Place, Thomas M. Krol; Frank V. Balon to Frank V. Balon, $40,319.

• 286&288 Grant St., Madeline Rinaldo; Madeline Clark to Westside Ministries Inc., $40,000.

•683 Minnesota Ave., Drew G. Munz to Sai Realty Llc, $38,000.

•457 Vermont, Reitz Properties Llc to Optimum Scotia Enterprises Llc, $30,000.

•98 Rano St., Fannie Mae to CDD Enterprise Ltd., $29,500.

• 233 Laurel St., Guy Dunn; Guy T. Dunn to Deutsche Bank, $25,838.

• 282 Fillmore Ave., Jonathan Oliver Aufdemberg to Randolph Ortego, $25,000.

• 166 Pries Ave.,HUD to Eric M. Penoyer, $21,667.

•47 California St., HSBC Bank to Andrew Chittenden; Deborah Chittenden, $21,000.

• 27 Glenn St., Anna Malczewski to SLM Bracha Llc, $18,000.

•982 Walden Ave.,HUD to Keith Canazzi Equity Trust Company, $17,555.

•63 Grote St., Catherine G. Michel to Michael J. Oliphant, $17,000.

• 238 Weimar, Michael Ignasiak to Ashley Wierzbicki; Nicholas Wierzbicki, $16,000.

• 178 Dewey Ave., Mohamad Uddin; Mohammad Khaled to Jay Why; B. Why, $15,550.

• 304 Dearborn, Robin M. Cuellar to Michael J. Oliphant, $11,500.

• 154 Normal, Larysa Smutiuk to Reitz Properties Llc, $6,500.

• 55 Wakefield Ave.,HUD to Georgeline Nicholas, $6,000.

•402 Northland, Craig W. Clark; Equity Trust Company to Wheeler Robert, $5,000.

Source: Buffalonews.com

Why Invest In USA? Why ‘Rust Belt’ Cities?

Written by Alan Findlay on . Posted in Investor Insight

USA has the largest real estate market in the English speaking world. It also is one of the most diverse.There are arguments on both sides for investing in US assets but events are beginning to show that the US$ is behaving as a ‘haven’ currency, retaining and even strengthening against the British Pound and Euro and is perceived as having more internal stability, within a more dynamic economy.  However within the country, investing successfully depends on a number of factors taken together as a whole, and different locations have been affected in very different ways throughout the USA.

‘Rust belt’ cities in the NE area of US such as Rochester, Syracuse, Buffalo, Detroit, and Indianapolis have been in the unusual position of missing the real estate boom, and missing the downturn. As a result, a large number of attractive properties can be purchased for ‘yesterdays’ prices – relatively low cost (typically $20,000 – $40,000) and extremely strong cashflow (typical Gross yield 25-35%). Gearing of up to 60% can be obtained on these properties and there while the focus on these units is income, there always remains the potential ‘bonus’ of capital growth. The Gross yields in these cities are some of the highest in the world, and this largely negates the income/debt servicing risk that ‘normal’ real estate is exposed to. For example, if a typical gross yield for foreclosed residential property in Florida, California or Nevada is 8%, then if there is a prolonged vacancy period or a drop in market rents due to large numbers of foreclosures in the area (flooding the market with rental properties), or a rise in interest rates, then there is a real chance of negative cashflow, which negates the reasons for buying the real estate in the first place.

Tangible commodities such as high income government backed real estate can provide a strong and safe cashflow while protecting against the future risks of both deflation and inflation.

In summary

– We believe US$ Assets are more likely to hold their value than Euro or pound in the medium term.

– Locations within USA with Strong cashflow, and a high number of private renters and government backed tenants are more attractive than ‘normal areas’ in the current economic climate, where the tenant market is often limited, and immature, and yields too low to make an attractive investment.

– Steady cashflow is a much more secure way to make a return on investment than hoping for capital growth, which may or may not happen.

<< Back to US Property Investor Insight June 2010

Buffalo Property Transactions in May Week 1

Written by Alan Findlay on . Posted in Members Only

Buffalo real estate transactions over $5,000 as listed in records of the Erie County clerk’s office for the week ending May 7.

Highest price: $400,000 Average price: $75,265 Median price: $27,500
Number of Sales: 32

• 50 Depew Ave., Clarissa Willett; Brian Willett to Julie A. Gavin, $400,000.

• 581 Colvin Ave., RJ Gullo Properties No. 1 Inc. to Hamri Garden Llc, $335,500.

•3 Clarendon Place, Michael Mathews; Olive A. Schoellkopf to Julian M. Lippmann; Jessica O. Lippmann, $315,000.

•80 Claremont, Kak Rehab 776 Llc to Jason M. Ryder; Jessica A. Moser, $167,000.

• 223 Lafayette, Frank Gillespie; Anna Maria Gillespie to Alexander Kerns, $155,000.

• 245 Mortimer St., City of Buffalo Urban Renewal Agency to Ronette Nevins, $150,000.

• 17 Eldon Road, Edward J. Gorczyca; Margaret H. Broderick to Monument Street Funding Llc, $115,522.

• 39 Rutland St., Richard C. Powers; Richard C. Powers Jr. to Steven J. Madsen, $91,900.

• 57 Trinity Place, 430 Niagara Street Associates to Chad Bevier, $87,500.

• 34 Choate Ave., Judith L. Tricoli; Edward H. O’Donnell; Edward P. O’Donnell; Daniel P. O’Donnell; Elizabeth A. Conner; Laura A. Pasier to Terence P. O’Connor; Gale L. O’Connor; Terence E. O’Connor, $84,900.

• 115 Tuscarora Road, Matthew M. Biondi to James Arthur Keipp, $82,500.

• 73 Tacoma Ave., Stephen B. Robinson to John Apgar, $42,607.

• 160 Potomac Ave., Maureen A. Gushlaw; James P. Gushlaw to Brandon M. Hernandez, $40,000.

•96 Tenth St., Frank DiPasquale; Christine DiPasquale to Anthony P. Lorusso, $39,999.

• 17 Albert Ave., Oliver Mark Booth to Jahangir Miah, $38,000.

•Vacant Land/817 Tonawanda&238 Ontario, City of Buffalo to 1093 Group Inc., $30,000.

•80 10th St.,HUD to Neil Carroll, $25,000.

• 292 Weiman St., Fannie Mae to Eric W. Percy; Theron R. Howard Jr., $24,000.

•5 Copsewood Ave., Moshe L. Kauffman; Menahem M. Hanzin to Netanel Stein, $20,000.

• 53 Phyllis, Moshe Kauffman; Menahem M. Hanzin to Netanel Stein, $20,000.

• 56 Alice, Craig W. Clark to Great Lakes Property Maintenance, $19,500.

• 118 Dartmouth Ave., Dale J. Dickman to Thomas D. Brinkworth, $17,500.

•66 Auburn Ave., Hawthorni 1 Investments to BUA Management Inc., $15,250.

• 105 Bickford Ave., Jollyette Gray to Michael Eubanks, $15,000.

•97 Woltz Ave., Map Properties Llc to Zubayer A. Rahman, $14,000.

• 1999 Bailey Ave., Dorothy R. Federici; Dorothy R. Burczyk to BUA Management Inc., $13,000.

•871 7th Street, Federal Home Loan Mortgage Corporation to Three Vs Inc., $12,000.

•65 Benzinger, Frank Giogas to Aaron M. Hayes, $11,500.

• 224 Smith St., Cash Flow Properties NY Inc. to Nader Batarseh, $11,000.

• 1038 Fillmore Ave.,HUD to Kent Gedon, $5,300.

• 124 Roma, Matthew S. Shupe; Linda A. Shupe to Pilgrim Properties Llc, $5,000.

• 18 Wex Ave., Kathleen Matuszak to Jeffery T. Wartinger; Joseph D. Schuster, $5,000.

Source: Buffalonews.com

57,256 Homeowners Receive Pre-Foreclosure Notice

Written by Alan Findlay on . Posted in Foreclosure, Mortgages, News

In the last three months, more than 57,000 pre-foreclosure notices have been sent to homeowners across the state — including 2,917 in Erie County — who are behind on their mortgage payments, reports Buffalo News. A state law enacted last year requires servicers to notify delinquent borrowers at least 90 days before initiating foreclosure proceedings and tell them how they can avoid foreclosure. Read more…

Positive Reports Supporting Hopes For Recovery

Written by Alan Findlay on . Posted in News

It was an unbelievably busy March for U. S. factories and a surge in home buying are the latest signs that the economic recovery is picking up.

Orders to U. S. factories rose 1.3 percent in March, the Commerce Department said Tuesday. That was much better than the 0.1 percent decline analysts had expected. Excluding the volatile transportation sector, orders gained 3.1 percent, the biggest increase since August 2005.

A separate report showed that more people than expected signed contracts on previously owned homes in March. The jump, in large part, resulted from tax incentives that have propelled the housing market this spring.

Read more from The Buffalo News Business Today

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