Florida Bank Repossessions: If this is too good to be true then it probably is!

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Slim

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Saw this in the Irish Independent on Saturday. IS it too good to be true?

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A long-haul journey Investing in cut-price property in Tampa could reap big rewards — but it’s not for short-termists By Siobhan Maguire
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There is a new type of Irish investor in town. Not the bankrolled buyer of the boom years who snapped up multiple properties on the back of overvalued mortgages, but a more discerning investor who has lost all confidence in banks. They are pumping life savings into cheap properties, particularly in America.

This is the trend that emerged from a Dublin property seminar this month. More than 40 potential buyers turned up when West Florida Wholesale Properties, which sells repossessed properties in Tampa, Florida, staged a conference in a Dublin hotel to showcase discount houses.

What stood out was the calibre of buyer, who ranged from the recently unemployed to workers who had taken pay cuts and the odd wealthy client.

“The Irish people who are buying these properties need incomes and need them fast,” says Albert L’Estrange, of the property firm.
 
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Re: Florida Bank Repossessions

Yes if you do some searches you will see what is happening over there. I was there lately and they are giving houses away there and no letting market worth talking about. RTE did a program lately regarding homes in Florida and they didn't paint a pretty picture.
 
Re: Florida Bank Repossessions

The difference is that over there they have large property taxes that need to paid if you are keeping a property on the books.

The cheap ($1) properties you see normally have a years of back taxes due also coming with them.
 
Re: Florida Bank Repossessions

I would have thought that buyers would check out any o/s taxes before buying. what about the Albert l'estrange characterr on the video on this site? Claims they (a) buy the property, (b) renovate the property and (c) get a tenant before selling to me for 40k, with a rental income of €500 pm. Is this likely?

Slim
 
Re: Florida Bank Repossessions

You would never rent a 40k property for 500 per month.

That's a 15% return.
 
Re: Florida Bank Repossessions

jhegarty said:
You would never rent a 40k property for 500 per month.

That's a 15% return.
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sorry i know this is off thread but could you give the formula to to work out that % return. thanks in advance .
donee
 
Re: Florida Bank Repossessions

donee said:
sorry i know this is off thread but could you give the formula to to work out that % return. thanks in advance .
donee
Click to expand...

Probably €500pm = 6k per year and 6k = 15% of 40k
 
Re: Florida Bank Repossessions

I think it was part of the Charlie Bird 's American Year.
 
Re: Florida Bank Repossessions

The RTE program was a program that was done on scams it is over now but I'm afraid I dont know the name of it. When I was in america there were so many houses for sale and the house I was renting for the two weeks from an english investor told me that the market has collapsed and that includes the rental market his rental income (and he was in an area with high demand) doesn't cover the cost of running the house.
 
Re: Florida Bank Repossessions

Stay well away. How come the locals don't steam in there and get such a return? Money is hard to make, so some wide boys make it easier for you :rolleyes:
 
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Re: Florida Bank Repossessions

Thank you Seantheman good on you to have the time to edit the entries. I will have to read back on what I write in future so not to be ridiculed!!
 
Re: Florida Bank Repossessions

Giggsy, this thing looks too good to be true. So, under normal circumstances it's a con. No way can you guarantee these returns. Just watch the dodgy body language in the vid.
 
Re: Florida Bank Repossessions

There is no such thing as zero rsk 15% return
Anyway why would they not just borrow the money themsleves and keep it to themsleves instaed of " sharing " the "good" news
 
I got an email yesterday from a company called property vultures (or something like that) saying they had loads of bargains in repossessed properties in Florida. I think they also mentioned guaranteed rental income.

I deleted the email, but no doubt they will find plenty of suckers hoping to make money from the misfortune of others.

Regards
Homer
 
Spoke to these guys, they were showcasing at a conference recently. Initial reaction was to find out what the catch was but 'seems' to be a good story behind these.

It's all to do with Section 8 housing allowances which the US govt pays to needy families. These guys buy repossessed houses for 30-40 cent in the dollar and refurb them to the necessary standard to qualify for section 8. The run this very tight and have the exact same spec in each house with the same builders turning around the work in rapid time.

They say the are making no money from the purchase and their income is from the cut of rental income which comes direct from uncle sam (the rental guarantee). Net yields of between 10-15%. Special purpose company gets set up so tax is not an issue. Apparently its a cross between a ltd company and self employed. The incentive is obviously for them to keep the rentals flowing as this is their income(goals aligned) This is an income play and not one for capital appreciation.

They pay for the flights over, show you the houses and get all the paperwork done in a 3 day visit Tue-Thu. I know some savvy people who have bought several of these. Not sure if I would, big risk is the cancellation of section 8 payments but not sure how likely that is to happen either. Cant put my finger on a specific reason for not liking it but something feels odd, maybe it's the too good to be true feeling
 
Have you stopped to wonder why they don't have enough local investors to meet their needs? Why do they need the additional costs of marketing to Paddy's?
 
I have been watching property over there for t years down the cape cost through brevard county website we vistited there and were impress with the value at the time you could get a 2 bed apartment in a holday type complex for €99k a 5 bed detatched house by beach for €400 a pool villa 6 bed for €460k detached. these prices came down by nearly half you could by an old detached 70's house for abour €140k a year ago and do it up and put a pool in.

lot of value but go out there and see it the areas are very different in just a few yards if you know what i mean
 
Complainer said:
Have you stopped to wonder why they don't have enough local investors to meet their needs? Why do they need the additional costs of marketing to Paddy's?
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Wouldn't worry so much about that to be honest. It's a global economy. We have done mezz finance deals for clients in the states that gave 25% return after 12 months. You could say the same about that deal, why need the paddies etc
 
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