The USA property market – Risk of legal Issues

- Ensure you have access to a US attorney to review the contracts for clear title

- Arrange Title Insurance

- Have the correct lien searches conducted

- Make sure you have the property contract you use has been vetted

To start your own USA property portfolio, go to:

http://www.keystosuccessclub.com/property/usa-property

About Mark Taylor….

The USA property market – Risk of legal Issues

The USA property market – The risks and complications

Of course, there are risks and complications to be aware of, and yes there are certainly Australians who will get burned by taking shortcuts.

Here is an article from the Sydney Morning Herald that raises some fair risks, although as with the media it is very one sided!

SMH article

Here are some of the things to be aware of:

• Buy over the internet at your peril.  The house may look good but what about the area?   Make sure you can get insider knowledge for the region, the neighbourhood, the type of tenants and the vacancy rates
• You need to have access to a reliable property manager as tenants have a lot more rights in the US and it is not as sophisticated as in Australia.  Picking up cash in an envelope is still a common practice!
• Make sure you have the right structures and bank accounts set up so you can handle the US and Australian tax side of things easily.  Leaving this to a qualified accountant is the best option
• Know your strategy; don’t put yourself in a position where you need or expect to sell.  You should be investing for the medium / long term!
• Getting US loans will give you much improved cash on cash returns, but it is more complicated than Australia with each state and each bank having different criteria
• Don’t forget the basic principles of property investing and make your money on the way in and look for a long term strategy.  We don’t expect capital growth for a number of years…

To start your own USA property portfolio, go to:

http://www.keystosuccessclub.com/property/usa-property

About Mark Taylor….

The USA property market – The risks and complications

Success Insight December 2010 is now out!

The new issue of Success Insight is now out.

 http://www.keystosuccessclub.com/newsletter/2010/December2010

Let’s find out what’s in store in the Property section of Success Insight, December edition…

• The secrets of successful investment in “Off the Plan property” by Munro Cohen, MD of Whiterock Capital Partners
• Free Info pack outlining how you can successfully invest in the
  US property market as well as the opportunity to speak one on one with someone who has recently bought 8 properties in the US
• “How to avoid the 5 most common risks when buying real estate”  from our newest expert panel member, Michael Poynter from MCP Group
• Australian Property Market Forecast 2011 from our expert panel

http://www.keystosuccessclub.com/newsletter/2010/December2010

Enjoy!

About Mark Taylor….

Success Insight December 2010 is now out!

Using Self Managed Super Funds for Property Investment

By Michael Poynter

Overview

Changes to super laws in late 2007 allow borrowing within the superannuation environment. This is starting to gather some traction in the marketplace, with increasing numbers of commercial and investment properties being purchased.

Previously, in line with the inherent purpose of super to invest for retirement with minimum risk, investors were not allowed to borrow against assets owned by a super fund.

Now it is allowed via a slightly complicated structure – a new custodial (bare) trust specifically set up to own the property, where the sole beneficiary must be a self managed super fund.

To try and limit the risk to the core super concept of investing for retirement, a lender of funds can have a mortgage over the property, yet cannot have any recourse to other assets of the super fund.

When is Borrowing Acceptable?

When…

1. The borrowed money is applied to the acquisition of an asset;
2. The asset is of a type which the Fund Trustee is permitted to acquire.
For example, it could not be an asset that the Fund Trustee is prohibited
from acquiring from a related party under s66, or an in-house asset that
would result in the fund exceeding the allowable limit for in-house assets
under s71;
3. The Fund Trustee is not the legal owner of the asset. Instead the asset
must be held on trust so that the Fund Trustee acquires a beneficial interest
in it. We can refer to the legal owner of the asset as the “Custodian”;
4. The Fund Trustee has the right, but not the obligation, to acquire legal
ownership of the asset by making one or more payments after acquiring the
beneficial interest ; a n d
5. The lender’s rights against the Fund Trustee for default under the
loan are limited to rights in respect of the asset only (i.e. the borrowing is
limited recourse).

About Michael Poynter….

Using Self Managed Super Funds for Property Investment

Michael Poynter – MCP Group