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Presentation. Purchasing Property in Dallas, Texas, USA. Disclaimer. To date, we have purchased two properties (sfr’s) in the USA.

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  1. Presentation Purchasing Property in Dallas, Texas, USA

  2. Disclaimer • To date, we have purchased two properties (sfr’s) in the USA. • We undertook extensive research prior to purchasing and are happy to share our sources with you however you do need to do your own due diligence especially verification from a variety of reliable and reputable sources. • We do not accept any responsibility or liability for the information contained in this presentation. • The research conducted was for our own investment purposes.

  3. Presentation Outline • Preliminary Research • Why Texas • Demographia • Purchasing in Dallas • Due Diligence • Strategy Steps • US Property Information.

  4. Preliminary Research • Books – US related: Mortgage-Free For Life: Secrets Banks & Lenders Don’t Want You to Know! Richard Weathington & Beth M. Ley (BL Publications, USA) 2007 • Getting the terminology right before doing internet search • Internet – which US states • Check out: www.fhfa.gov (federal housing) • Look for state HPI (housing price index) summary

  5. US Housing Price Index • Source: www.fhfa.gov

  6. Clear • Red • Source: www.cyberhomes.com

  7. Why Texas? • Employment • Oil • Medical research • Military • NASA • 2 of top 10 cities in US (Dallas & Houston) • 2nd largest state in US (population & land size) • Northern migration • Stable house prices

  8. Demographia • The Demographia International Housing Affordability Survey covers 272 housing markets in Australia, Canada, Ireland, Hew Zealand, the United Kingdom and the United States. • It uses the “Median Multiple” which is the median house price divided by the gross annual median household income to determine housing affordability. • www.demographia.com/dhi.pdf

  9. Affordability Rating Categories

  10. Median Multiple • Historically the Median Multiple has been relatively similar among the nations surveyed with the median house prices being generally 3.0 or less times the median household income. • This affordability relationship continues in many housing markets in the USA and Canada. • However the Median Multiple has escalated sharply in Australia, Ireland, New Zealand and the United Kingdom and some housing markets in Canada and the USA in recent years.

  11. Housing Affordability Rating

  12. Income Share for Mortgage

  13. Texas Housing Market Ratings • City Rank Rating • Lubbock 43 2.5 • Beaumont 54 2.6 • Killeen 54 2.6 • Dallas-Fort Worth 66 2.7 • Houston 85 2.9 • Corpus Christi 95 3.0 • Source: Demographia Affordability Survey, p. 3

  14. Texas Cities

  15. Australia LOC/Interest Only 25-30 years Everything All locations Solicitors Company + family trust Rates USA P & I 15 years Above $200K Local area Title Co’s LLC (foreign nationals) Municipal taxes Investing Differences • Finance • Length • Brokers • Banks • Legals • Asset Structure • Taxes

  16. Purchasing Property in Dallas?? • Population • Lifestyle • Affordability

  17. Why Dallas Northside??

  18. Why Dallas Northside??

  19. Pre-Purchase Steps • Set up an LLC • Find a buyer’s agent • Search for a property • Arrange a lender.

  20. Set Up an LLC • Set up a US LLC • Foreign Nationals can set up LLC’s. • IRS taxes at local rates • Set up with an EIN (Employer Identification Number) • Able to set up LLC online (from Australia) • Use an LLC provider offering a secretarial service • Can use LLC to open a free Small business Check A/C • LLC is the applicant name • EIN is the ITIN.

  21. US LLC Set Up - SmallBiz

  22. Find a Buyer’s Agent • Not as easy as it sounds! • Can help with find REO properties • A lot of Realtors but few specialists • How to find? • Business contacts, ie. attorney, title company, etc • Newspaper (Dallas Morning News) • Internet (Google search) • Yellow Pages (Dallas) • Once selected a few, put them to the test of finding you a suitable property, ie. mfr (multiple family residence [eg. unit complex]).

  23. Find a Buyer’s Agent • www.dfwinvestmentrealestate.com

  24. Search for a Property • Where to begin? • Buyers Agents • Newspaper • Internet • Need to keep in mind who your rental market is going to be! • For us its - female university students.

  25. Property Search Issues

  26. Property Information • House Size • 1 sq. foot = 0.092903 sq. metre • 1 square (100 sq. feet) = 9.2903 sq. metres • Land Size • 1 acre = 4,046.85 sq. metres • 1 perch = 25.28125 sq. metres • (Min. block size: 0.12 – 0.15 acre)

  27. Property Location • Zip code - important for statistical searches • Zip code finder • http://maps.huge.info/zip.htm • This is handy when there are several zip codes for a locality. • Locality Profile Comparisons • renters v/s owner occupiers • www.city-data.com or • www.uscitycountry.com

  28. Dallas Neighborhoods • Plano 11th • Carrollton 15th • Richardson 19th • (Money Magazine Best Places to Live 2006) • These neighborhoods are beside “Interstate 75” and are located on the northern side of Dallas.

  29. Dallas Neighborhood Zip Codes • Plano 75075, 75023, 75074 • Carrollton 75006, 75234 • Richardson 75080, 75081 • Addison 75254, 75248 • Sharon 75025 • Allen 75013 • Fairview 75069 • McKinney 75069

  30. Searching for MFR’s • Multifamily Residences sometimes referred to as “condo packs”. • Start with www.realtor.com • Foreclosures (www.homepath.com) • Establish price range, number of units, etc. • Use this information to register with several buyers agents.

  31. Property Information

  32. Weighing Up The Deal!! • What’s involved in weighing up the Deal? • Down payment (deposit) 30% (foreign nationals) • LLC setup $800 USD • Title Insurance $500 USD • Taxes 3% of property value • Property Management 10% of gross rent • Insurance 2% of property value • Brokers Fee ?? Depends on agent • Rental Income ???

  33. Weighing Up The Deal!! • Rules of Thumb • 30% Gross Net Rental Return • Rent PA/0.3 = Price Offer for property • This should equate to between 50 - 80% of the property list price • (Somersoft Forum) • Rule of 2 • 2 x Purchase Price/1000 = < Rent per week • (Dymphna Boholt)

  34. Due Diligence • Online property appraisals • www.realquest.com • www.eppraisal.com (*) • www.realestate.com • www.realestate.aol.com (*) • www.coldwellbanker.com • ww.cyberhomes.com

  35. Looking for Finance in Dallas • www.professionalbankna.com • www.dallasincomeproperty.com

  36. Purchase Steps • Make an offer • Pay a down payment • Offer acceptance • Organise property inspection • Undertake settlement process.

  37. Title Company & Attorney • www.nancyppattersonpc.com

  38. Post-Purchase Steps • Locate a property manager • Ensure property tenanted • Set up Bank accounts, online banking facility, Visa Debit card.

  39. Finding a Property Manager • www.allpropertymanagement.com

  40. Arranging Insurance Cover • www.homeinsurance.com

  41. GPD USA Investors Tour • 2010 - (Sun Sept 19 - Sat Sept 25) • 5 Cities - Texas - 6 nights • Dallas, Sherman, Austin, San Antonio, Houston

  42. Further Information • Go to: • http://www.paragon-marketing.org • To download: • Presentation powerpoint slides • Texas Economic Outlook • Demographia Housing Affordability Survey • US LLC information • GPD Investors Tour Itinerary.

  43. Thank You Any Questions!

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