Posted by Arthur on August 09, 2003 at 19:31:55:
Sorry for the delay in getting back to you, but i thought ihad replied to this one.
My situation may not be typical due to where i was investing and the current climate at the time. I guess it was like all successful businesses, timing.
I lived in the UK, and in London there is a housing shortage with loooooong lists for our equivilent of section 8. Its also the law (all over Europe) that if any person arrives in our country seeking asylum, and they face persecution or death if they are sent home, that we must provide them with housing, food, education etc. Well, due to conflicts like Bosnia, Iraq etc, we had an influx of immigrants arriving in England which needed to be housed. Well, all the Bed and breakfasts (like hotels) were full, so those companies made deals with the local authorities (US equivilent of counties) that they would provide them the same service but would use apartment and houses to house them. This then meant those companies could offer guranteed rents at above market rates. My friend use to talk to me about this, and eventually i purchased a property off him allowing him to use his equity to buy other properties, and allowing me to get into the game. On properties that would normally rent for $900, i would get $1200. So, me and my partnet decided we would show our friends how to buy properties, and in exchange, we would manage it for them and pay them $900. We had such a great demand we would do this for anyone after we explained how it worked.
What i would do is find the property, help them with the mortgage via my broker who i had worked with all the time, then i would kit it out and rent it for them. All they really had to do was go to the solicitors (laywer) and sign some documents, and then deposit their checks.
Investment mortgages were not widely available, so we had to tell a few porkies. Most of them only put in like a few hundred bucks to buy the properties, and 2-3 years later are sitting on $100k of equity.
Did i get stabbed in the back? Sure, some people got too greedy, and dispite me making them $45k-80k tried to take back their properties. Sure i lost out, but they too lost out and i still made several k’s from them.
Remember, this happened in the UK. Its a TOTALLY different ball game there. You take a U.S Guru to the UK and they would be lost. Theres no lease options, no seller carrying, no hard lenders, no short sales, rarely a foreclosure (only when the market is in recession). Its pretty impossible to be creative there.
Right now, i’m learning the US way of things as i plan to move here and continue doing the property thing. The potential here is so much greater.
Good luck, and don’t give up. Trust me there is alot of money to be made in the USA.