Why Now is a Good Time to Buy in the USA

The decline of the US property market has been well documented in recent years, with falling prices, the sub prime mortgage fiasco and foreclosures at record levels. As with any market, whether it be falling or booming, there are opportunities to be seized.

We have been very quiet with regard to the USA property market in recent years but now we feel there are certain distressed sales which are worth a closer look and bringing to the attention of our clients. Assetz will be initially concentrating on Florida but seeking out other opportunities in the USA in the coming months.

Florida has certain characteristics which very few areas of the world can match. The state enjoys a very strong rental market both for holiday homes and long-term let properties for existing residents. The current migration into Florida from other areas of the US is currently running at 3300 people per month. The recent spate of foreclosures has only served to strengthen this rental position as more and more previous home owners are forced to rent.

Assetz will be bringing to the market, hand-picked properties which are in very good locations, significantly below market valuation and with a strong rental demand. The properties will be an investor's dream with the appropriate supporting information being supplied by ourselves. Many of the properties are distressed sales and the following properties are what are termed in real estate a "short sale".



This is when a bank or mortgage lender agrees to discount a loan balance due to economic hardship on the part of the mortgagor. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale.

A "short sale" typically is executed to prevent a home foreclosure. Often a bank will choose to allow a short sale if they believe it will result in a smaller financial loss than foreclosure. The advantage for the home owner is the avoidance of a foreclosure on their credit history. The result of this increased short sale activity in the US is to bring exceptionally discounted properties to the market.

Market Indicators

There are some indicators at the moment that the Florida property market is at or nearly at the bottom. This has been as a result of a combination of the following factors.

New-build construction has been restricted by builders as they prefer to sit on land at the moment. In Orlando at the moment there were just 916 starts in first quarter 2008.

First-time American buyers squeezed out of the market by the 2004-06 housing price rises are now beginning to take the plunge tempted by low prices and competitive stable interest rates.

Overseas investors are also now starting to buy property, taking advantage of the exceptional exchange rate between the dollar and the euro/sterling, offering property at unbelievable prices. This is a two pronged attack with many investors convinced that the pound will fall against the dollar over the next two years to a level around $1.62 to the £1.00. Property purchased now could be worth 22% more in sterling terms in a year or two, providing a huge profit. This, coupled with the significant true discounts on offer, make this a great investment opportunity.

Please feel free to discuss this opportunity in more detail with our property consultants who will be on hand to find you your US property bargain. The following pages are properties which are available now to purchase

Articles

Recovery in US Housing Market

Place in the Sun

Fast Facts

USA/Florida – 2008 factors influencing property investment

• US market has been falling for 3 years and now almost at the bottom
• Previous home owners are now forced to rent
• USA is now seeing stabilising interest rates
• Current migration into Florida from other States is running at 3300 people per month
• Florida long term residency – accountable for 70% of the property market
• Florida rental market remains robust with low vacancies, rising rents and strong demand from tenants
• Florida strong rental market – holiday let & long term residency
• Exceptional exchange rate 2 to 1
• Experts see the £ falling against the $ in the next few years, stabilising to $1.62

Assetz Service – Under market value property (minimum 20% BMV)

• Short sale – prior to repossession – vendors reduced price/reducing bank financial loss
• Market valuations and on the ground experts with sourced comparables
• Price negotiated on your behalf –true discount
• Home condition report to ensure no costly damage after acquisition
• Checking all taxes and fees are paid to date, to ensure no liability
• Currency transfer service to minimise bank charges
• Finance package and mortgage solution - local financing 75% of purchase price
• Non-resident, interest-only mortgage interest rate around 6.8% fixed for 30yrs
• Sourced local management company – fees around 10%
• Sourced local lettings company and holiday lets
• Current rental yields on similar properties sourced locally averaging around 10% pa
• Selected properties in zoned areas with guaranteed rental returns of $2000 per month for 2 years

Purchase Process – Costs

• Reservation finder's fee 3% to secure purchase
• 25% deposit within 4–6 wks
• Completion within 4–6 wks
• Closing costs (include solicitor's fees, stamp duty etc.) 4% paid on completion
• Property tax around 1–2% (assessed by local authorities)