USA Foreclosure FAQ'S
Please see below some commonly asked questions and answers. If you have any questions that are now answered in this detailed investment pack or FAQ, then please do not hesitate to contact us using the details at the bottom of each page
Q. What kind of rental yield can I hope to achieve with these deals
A. Because of the low purchase price of the properties, we are able to achieve extremely high rental yields of 28% and above! We feel that this provides excellent cashflow for you and ensures that you can recoup the total investment in two years or less.
Q. What is the rental per month for these properties
A. For a 3 bed, rentals are around $800 to $900. For larger 4 and 5 bedroom houses, this could be $1,000 to $1200 per month. Right now the strong dollar is in your favour in terms of these rentals.
Q. Why are management so cheap at just $100 per month
A. This is because we are able to leverage economies of scale with our US letting agent partners to get you the best deal. This ensures that you can maximise your net rental yields and cashflow.
Q. What size houses are easiest to rent
A. 3 bed 1 and 2 bath that is why we sit in that market.
Q. Is it possible to find the more grand colonial houses and can they be rented
A. Yes it is possible they will cost more $45,000 to $50,000 and then you need to add refurb, legals
Q. Why is Detroit a good place to invest Isn’t it a dying city
A. Detroit has experienced several economic problems over the last few months and the population has decreased by over 750,000 in that time. However, the US government is pumping billions into the city and this is increasing confidence in the property market, more jobs and therefore a stronger economy. Also there is also the fact that the car industry is set to make a comeback with an expected demand of 16.5 Million cars by 2012 (Source: Economist magazine 16th March 2009)
Q. Are there any local council plans to destroy abandoned houses
A. After 1 year if they are not sold by the banks they are destroyed these by the way are not worth buying as they have been trashed to such an extent they are to expensive to refurbish.
Q. What is the rental market like in Detroit
A. There is no shortage of tenants in fact the rental market for landlords at the moment is buoyant. This is mainly due to two reasons. Firstly, Americans are scared of buying property for fear of negative equity. Secondly, there is a large increase in employment due to government aid and investment in the city.
Q. In terms of insurance is landlord liable to tenant for any personal injury
A. No they are not.
Q.Are there any taxes and penalties on a vacant plot if the grass is not maintained
A.Yes there is in Detroit they allow you to leave your grass up to 6 inches high there after you will get a notice to get it cut----we will do that for $20 dollars a month and that caters for up to twice a month.
Q. Are there any taxes and penalties for a plot with a half burned out house on it
A. After 1 year if you have not done any improvements to it the Detroit council will seize the property, you will also still have to pay a council tax while it is in that condition that amount would be determined by a Council City inspector.
Q. Could you also please clarify how Belgrave Group fit in to the process and the payment process
A. Belgrave Group are well respected companies in the UK property sector. They have a long standing and established relationship and have worked on deals before. The appointed lawyers are handling payments as they are the one who will be transferring funds over to our USA partners for purchase of the properties for refurbishment and renovation. You will also notice that the reservation from is legally binding to both companies.
Q. What happens if you cannot find me a suitable property within a month as stated in the reservation form
A. If we don’t settle on a property that you are happy with you will be refunded in full. We will be securing properties in bulk so you will have a choice but you need to remit your funds so we can show proof of funds to the bank we will hand it over once you have agreed on the house we are going for. We have the agreement with the banks through there American partners so they are the ones who have to show POF hence why they need to know you are good for it when they call for it. Generally we have the property within 1 to 2 weeks maximum.
Q. Are prices for foreclosure (repossessed property) increasing
A. Yes there has been a strong increase in demand for these properties as there are now some savvy investors, some very big names, getting into this market. This is increasing demand and pushing up prices already. We are seeing these kinds of deals increasing by up to 1,000 a month! This is why we are eager to purchase as many as we can before the price increases as we will obviously have to increase the price for investors to accommodate these higher expenses.
Q. How do I purchase one or more of these properties
A. Please complete the reservation form in this investment pack to us. We would then require the first reservation payment of 2,450 (fully refundable if we cannot find a suitable property within 1 month) per unit. The remaining 21,550 would then be payable within 14 days.