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Financing an IP in the USA

Discussion in 'Introductions' started by SteveTil, 14th Jul, 2011.

  1. SteveTil

    SteveTil New Member

    Joined:
    14th Jul, 2011
    Posts:
    2
    Location:
    Adelaide, SA
    I just joined investED today and it's the first time I have looked at this type of resource. I have selected a property to purchase in Michigan USA and I'm exploring financing options. My first choice is to pay cash by dipping into the equity in my Australian home but I think I'm about $20K short. My situation is a little different from most Australian investors in that my wife is an American born national so the rules about foreign investment don't apply. I'd be happy to hear any views on this topic.
     
  2. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    Hi Steve

    I'd be waiting to see if the US loses it AAA credit rating. Also, they might be having a third round of quantitative easing. That means, the value of your US rent will spiral down in Aus dollars.




    Johny.
     
  3. SteveTil

    SteveTil New Member

    Joined:
    14th Jul, 2011
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    Location:
    Adelaide, SA
    Thanks for the advice Johny

    The property in question is on a Lake (70 feet of shoreline belongs to the property). It comes with a wharf and large pontoon boat and the house is fully furnished. It's surrounded by a few thousand acres of State forest where you can trail blaze on ATV's & hunt etc. The agent I was dealing with estimated that it could be a holiday rental and would realise about $550 to $700 USD per week. I took a number of my American relatives who live in the nearby area to view it and they agreed with the agents rental potential estimation. The rental income is attractive but secondary to the long-term plan which is to live there 3 months per year when my wife & I semi-retire. I was also told by a friend who is an experienced property investor and lives not to far from there that this type of holiday rental is fairly rare. Most are used privately by families as their own holiday getaways and not offered for rent. You may very well be right about decreasing rental values in the US in general but I'm not too sure if that will significantly impact on the holiday rental market. I'm no expert in this.
     
  4. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
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    Location:
    SE Queensland
    WoW. Sounds like a place I would like to live. I guess, you will have to decide whether you are looking for a home or an investment property. An IP is a business and it's purpose is to make a profit. If the US economy tanks, I imagine that holiday homes will be the first properties hit.

    Who will manage this house? Would there be a big turnover of tenants? Have you approached any American banks.





    Johny. :)