Wouldn’t it be great if we knew in advance that a deal was dodgy? In hindsight it might be all too clear that you were walking into trouble, but if you are new to a situation, or pumped with emotion about something exciting – like a property purchase! – you might be walking blindly into a ready-made disaster.

In just about every situation there are early warning signs and red flags to look out for, especially when it comes to property buying. The issue is, it takes time and experience to learn what these red flags are, a learning curve that can be expensive and stressful.

Like anything, a knowledgeable and experienced team at your side, you can easily navigate your way through a worthwhile and high-quality residential property investment.

Real estate agents are an integral part of your property team. Hiring the right one requires research and effort in order to get the best of the best by your side. We’re not just in terms of skill, but also in terms of service and how well they communicate with you.

It’s important that when you do spot red flags you take them seriously. It’s the only way to weed out unreliable offers and make sure you find a trustworthy real estate agent that will look after your hard-earned Aussie dollars.

Our years of experience helping Australians enter the U.S. property market allows you to build a reliable U.S. property investment team and secure the best properties available across the U.S., all for far less than buying property in Australia.

Why investors may feel uneasy about real estate in the U.S.

Foreign investment ventures always have that extra level of uncertainty around them. Even though residential real estate in the U.S. is a lucrative opportunity, many investors hesitate because of the extra gap the distance and time zones make.

For those who step outside their comfort zone and take the U.S. plunge, the rewards are fantastic and most of the common myths around U.S. investments are quickly realised to be just that: myths.

Here are some common investor fears that most Australian investors find to be unfounded when purchasing U.S. residential properties:

• Real estate is too risky – All investments come with certain risks, which is why you need to do your due diligence before committing to any investment – no matter where it is in the world. When it comes to real estate, it’s a well-trodden road with easy to follow steps. As long as you take the time to build a solid professional team on the ground to oversee your investment, it’s very possible to see fantastic returns.
• Real estate agents are shady – The unfortunate truth is that there are shady people in every business–not just real estate. You need to exercise caution whenever you’re going into a new business venture, whatever it may be. Doing your research and chatting with a number of real estate agents before you commit will help you create a shortlist of high-quality and trustworthy professionals to assist you.
• Real estate is a trap because you’re in for the long haul – There is an investment option for every investor. You might prefer the idea of a long-term investment, but equally possible are fast returns with property flips and fixes as well as a variety of lenders to match your needs too.

Your concerns for safety and certainty with your investment are valid, and it’s smart to tread carefully in new situations, to a degree. Remember that everyone starts somewhere. Residential real estate investment in the U.S. can feel new and foreign to you now, but if you’re open to it, broaden your perspective and think “abroader,” you will soon find your footing and trust your ground team to invest again, and again.

5 red flags that indicate a dodgy real estate agent

Inviting a real estate professional to join your property team requires preparation and time to get right. Once you find a real estate agent you can trust you can feel confident and continue to rely on their services for future investments as you build your international portfolio. Starting your initial real estate agent search you’ll need to be diligent and watch out for these five red flags.

1.  They are difficult to contact

Not being able to reach your real estate agent can be frustrating, and it’s not just about common courtesy, it can damage your investment opportunities if it takes significantly longer to iron out details, especially as there’s a time difference to consider. It could even mean that you miss out on your dream property, simply because they didn’t bother to read your offer.

If your real estate agent is difficult to talk to or communicate with, it’s probably an indication of how they are going to respond in the future as well. Don’t wave it off thinking it’s not going to keep happening, no matter how impressed you are with their resume–listen to your gut and find someone new.

Consider the cost on you personally as well. Waiting for responses can be anxiety-inducing, especially if they make you call within their office hours, leaving you sitting at your computer or on hold at 2.00 am.

Red flags with consistently slow response times can indicate that the agent:

• Doesn’t specialise in your purchasing field
• Has no commitment to the market
• Doesn’t work in their position full-time

Take this as a sign that they are not in a position to fully address your purchase and not that they are simply busy right now. Expect this to be an ongoing and significant issue that needs to be avoided.

2.  They seem unmotivated

When someone is clearly not passionate about their job, it can be hard to trust them with your investment. In these cases, you are more like a dollar sign to them than a customer they can deliver quality customer service to.

If you can see they are being half-hearted about their answers and assistance early on, you can expect them not to put their energy and effort into finding or securing the property you really want down the track.

A passionate real estate agent is one that will secure your property investment to the best of their ability.

3.  There’s a lack of transparency

Working with someone who doesn’t tell you everything becomes suspicious. If they seem to be holding back on providing information about their processes, work history or credentials, this is a big red flag of what’s to come.

It’s fair for you to question what else they’re hiding, as well as their legitimacy. There should never be gaps in information, especially when it comes to a property you are looking to buy. If they are not upfront and honest, they’re not going to offer the reassurance you need for your property purchase.

4.  They seem overly pushy

No one likes a bully, so if you see signs of your real estate agent being overly pushy, take a step back. Remember that they are not just interacting with you, they are also interacting with the property vendors and your future homebuyers. That pushy attitude will push everyone away and hurt your buying power.

You can also expect them to put pressure on you to “buy now” without assisting you with options or negotiations.

While being aggressive in real estate used to be a solid tactic, it’s now outdated and out of favour, so don’t stand for it, especially if it crosses the line to bullying.

Someone patient and charismatic will be equally charming with everyone they meet, helping to grease wheels, make deals and sign a contract that has everyone smiling.

5.  They are unprofessional

In every transaction, you have to remain professional–especially when dealing with something as delicate and important as residential real estate investment.

There are a few ways where lack of professionalism shows:

• Passing the blame
• Giving excuses
• Failing to keep promises
• Getting upset, defensive or emotional over small details
• Poor communication and response times

It’s important to factor that real estate licensing is easy to come by in the U.S. A lot of people have it to access special reports and databases and don’t have any contacts or the ability to assist you with a property purchase. You need to be vigilant about who you hire even if they technically have the paperwork.

Any suspicious activity, i.e. they are working out of their home basement not a shopfront, needs to be considered as a serious red flag and an indication they might flake on you at any moment..

Being vigilant about who gets a spot on your team includes knowing who you should avoid at all costs. A little bit of research and time spent here ensures you have the best possible group of people representing you in terms of reaching your property and financial goals through your U.S. property investment.

Don’t settle for less than a real estate agent who is professional, prompt, passionate and transparent with their business processes, costs and communications.

Our online, self-paced course, Fix and Flip Academy goes into greater depth on this topic, giving you all the information you need to start investing safely and confidently in the U.S.

To learn more about investment opportunities and costs or working with a property team in the U.S. give Star Dynamic a call.

Is buying and renovating the average home a little boring? Consider diversifying your investment portfolio (and simultaneously earn a sizable profit) through buying and renovating a multi-family property. 

When we say ‘multi-family home,’ we’re talking about apartment blocks, duplexes and triplexes. Because of their scale, multi-family properties are significantly more work compared to a single-family home with significantly more revenue potential. All the extra time and care can translate to stronger cash flows through multiple streams of income. Let’s face it, having three paying tenants on one property means incredible, predictable, passive income without having to lift a finger for years to come.  

Compared to Australia’s infamously heavy stamp duties, real estate in the U.S. comes with little to no stamp duty. This makes property investments in the U.S. more attractive to foreigners and more promising when it comes to a solid return on investment. 

Multi-family properties are a lot of work but there are some great bargains on the market ready to be snatched up. If you are prepared to do the renovation work to take a three-star residence to a five-star one, it can result in significant returns while balancing your investments over more diverse assets to decrease your risk of capital loss as an investor. If this is something you need a bit of help with, then Star Dynamic can support you. Just reach out to us via email to chat about your options.

What is a multi-family property? 

A multi-family property is one large building, divided into multiple individual homes, often with a private front entrance and full amenities. It’s not uncommon for each residence to be identical in layout, or to have mirroring layouts. Be careful with what you look for because anything beyond four is categorised as a commercial property, which operates differently in terms of city zoning and financing.

Multi-family properties are a popular choice for renters because they’re more affordable than single-family properties. As a bonus, they’re usually closer to commercial areas and transportation hubs, making the market highly competitive. Properties in bustling areas mean higher rental yield and investment capital growth and multi-family choices are especially profitable. 

There are several types of multi-family properties to choose from:

• Unit or apartment blocks
• Duplexes (two individual family zones)
• Triplexes (three individual family zones)
• Quad or fourplex (four individual family zones)
• Apartments

Not all multi-family properties require renovation, you can also buy and lease as is, however, finding a property that is a little run down significantly reduces your buying costs. Doing the renovation work to bring the property up-to-date costs less than you think and you can simply hire a team in the U.S. to take care of it for you. For example, Star Dynamic has a contractor team in the U.S. that carry out all of our renovations which we provide exclusive access to for our clients. That way you get a much higher rental income and have a desirable and valuable property that will attract (and keep) high-quality tenants. 

There are multiple strategies you can implement to get the most from your investment performance. Here are the three strategies I’ve seen to be especially effective during my time working with U.S.A real estate investments:

• Buy and hold – Purchasing a fully renovated property that has at least an 80% occupancy rate will yield consistent profit. Buying and holding is a long-term investment strategy that requires less maintenance because the property is ready to go and already leased. It may cost a pretty penny, but it’s a great way to earn quickly without any downtime on fixes.

• Buy, fix and hold – Properties that need some work come cheaper but require more time and effort to fix, especially to bring them to a high standard and really make them shine. That work will pay off with reliable repairs that will last for years, competitive tenants and higher rental yields, allowing you to quickly recoup your costs.

• Fix and flip – If handling tenants and owning property doesn’t interest you, you can fix and flip. In this case, you find a solid property that’s a little older and undervalued, buy it and organize to have it refitted. Once the renovations are completed you put the property back on the market for a much higher price. You see returns within a few months and can access short-term loans with better lending flexibility.

Single-family vs. multi-family properties

Owning multi-family investment properties and single-family homes differ in more ways than just in terms of scale. They have their differences in price, management styles and even exit strategies. Both have their pluses, but the benefits of multi-family properties are hard to ignore. 

Single-family properties are typically cheaper to buy and also to maintain. They also have higher appreciation with time due to strong market demand with both investors and home buyers keen to buy. 

If you’re looking for bigger cash flow, then multi-family properties are your best bet. A single-family property will only produce one month’s rent, whereas a multiple-family block will be earning double, triple or even quadruple that amount. One vacancy in your multi-family property is also not as pressing since your other tenants will provide income to cover any losses until the vacancy is filled.

While we always recommend property managers for international real estate, hiring a property manager and a team for more complex investments like multifamily properties becomes essential. It’s a business venture so you need to treat it like a business in order to grow your profits and see increased results. The best way to do this is through hiring a capable and trustworthy team who can help with your business strategies, on-ground communications and keep all the pieces (labour, maintenance, tenant screenings) aligned and running smoothly. This was essential for Star Dynamic to grow throughout the U.S. and also be able to provide holistic support to our clients looking to do the same. We also found that building a trustworthy team was a make or break situation so a great amount of time has been put into building that in the U.S.

The small added cost means peace of mind and fast response times when it comes to managing the property and tenants. 

Why are multi-family properties a profitable option? 

There are plenty of reasons to invest in a multi-family property. There are not as many out there compared to single-family dwellings so snappy investors tend to snatch them up quickly, and for good reason. 

Leases on multi-family properties are easy to fill due to an increased demand for workforce housing in the U.S. Single-family properties are too expensive for those who make up the bulk of the workforce to rent, especially if they are single, or single parents. Apartments and units in a duplex or triplex are much more affordable and fit their needs well. 

Millennials are a big part of the workforce now with many looking for affordable housing while they save to buy their own home. The transient nature of workforce housing, like apartments, is appealing because many are not looking to settle down, they are exploring career opportunities and different lifestyle choices.

As an added bonus the commercial environment and great infrastructure usually surrounding typical multi-family properties help increase demand and attract high-quality tenants. This means you can charge higher rents and look to capitalise on short term lease agreements with frequent rent increases.

When it comes to investors who have purchased residential multi-family properties in the U.S. through us, they have seen a 20-22% return on investment annually, which is a huge payout compared to the price of their initial purchase

Multi-family properties require a little more attention, management and maintenance given their scale, but as long as you stick to a strategy that works for you and get the help of professionals and communicate what you want effectively, you’ll see a strong return. 

While we highly recommend a multi-family investment in the U.S., we don’t expect you to be able to handle it yourself. Unlike flipping homes in Australia where you can roll up your sleeves and get your hands dirty, the distance of an international investment makes it better to employ a professional team that knows the residential codes and can complete your masterpiece for you. You also need to look into a trusted property management team that can handle enquiries, screen tenants and communicate over the time zones.

If you are interested in learning more about investing in multi-family properties in the U.S., we have an exclusive training guide. This guide gives you the details on buying strategies and property types to help you make a solid purchasing decision. 

Download our free guide now.