Buying foreclosure property in America

[brian]

I think the topic of Detroit came up previously on the forums, but despite the yield promises, the whole thing has screamed "experience investors!" to me.

Interesting to note Florida coming up - no one too worried about potential sea level rise from Global Warming over the long-term? And no one looking towards California?

[Albufeira]

The problem with much of California is though the prices did fall, they haven't fallen far enough.

When you do a search for real estate in the better neighbourhoods in California the prices are still very high in relation to the median income. There are bargains, but I caution any investors to do their homework on the neighbourhood they're buying along with the crime in the area. The city data forum is probably a good place to start.

For a savvy investor your best bet would probably be to buy in New York City, Washington DC or their environs as both cities have been on the upswing for the past decade. I've only visited Washington DC so I'm not as familiar with the market, but I did notice that this spring that there were many gentrifying areas like Columbia Heights. So I am going to limit my advice to New York City.

Many neighbourhoods in and around New York were once considered undesirable, Williamsburg in Brooklyn is a good example. You can look up brownstones that have sold this year for around $1 million that in the late 90s sold for 1/10th of that. Unlike much of the US the property market in the city has held up and crime is the lowest its been in almost fifty years.

The key to buying in New York is to choose an area that is adjacent too an up and coming neighbourhood. Also important is how accessible is the area to midtown and downtown by subway or train. You can usually tell that an area is going to turnaround when you see young artistic types and see coffee shops and art galleries opening up.

Some areas that are in the early stages of gentrification are Chinatown, Astoria in Queens and Bushwick and DUMBO in Brooklyn. However, gentrification in New York happens quickly so it's important to get in while the prices are still low.

Washington Heights, West Harlem 125th to 155th are places that I could see under going gentrification within the next 10 years. In the longer term even Inwood, Hamilton Heights, and Fort George in Manhattan becoming gentrified. In the Bronx Mott Haven and Port Morris would be areas that could be next. I know that there are people reading this thinking that this will never happen, but I never thought I'd see the day when Williamsburg and Park Slope were expensive neighborhoods. For someone with the capital I would say it is definitely a good place to invest in, but do your homework!

[Helen_M]

"a two bedroom flat for approx $30,000" - have you really seen such prices in Florida?

[Moby Jones]

Originally Posted by Helen_M

"a two bedroom flat for approx $30,000" - have you really seen such prices in Florida?

I've seen plenty of condos in parts of Florida advertised at $30,000. Why do you ask?

Well we bought a 3 bed 2 bath single family residence (detached) in the mid west initially. We then bought a duplex (pair of co joined semi detached) in the same city. We flew out to visit last month to meet the seller / money man. His builder and to meet the owners of our property management company and tenants. We have three tenancy agreement all paying on time through Section 8 and the management company.

A warrnty repair was required on one and we were immediately reimbursed by the seller under warranty. On our visit we got to see homes purchased by the guys which were about to be refurbished. Properties half way through refurbishment and finished home with and without tenants for sale.

We then combined our visit with a two and a half week trip to Florida. The flights and hotel costs will completely wipe out our US tax liability as you are allowed two inspection trips per year per property. Which is cool.

So another purchase is on the cards. It's worked out really well so far. Banking, money transfers and paying property taxes has been straightforward too.