Low mortgage rates boosting US property market

April 15th, 2013

The tide is turning for the US property market in 2013 and buying conditions are at their most favorable for buyers of US property. Partly thanks to historic interest rates for US mortgages, US property ownership is at its most affordable, leading to an increase in buying from US citizens in particular.

According to real estate portal and analysts, Zillow, US homeowners paid nearly 37 percent less on their monthly mortgage payments in the final quarter of 2012 than prior to the peak of the market in 2005.

US homeonwers have increased buying power, boosted by favourable interest rates. In stark contrast to the pre-peak period, rates from 1985 to 1999 were at around 13 percent on 30 year fixed rate mortgages. During this period, Americans were spending an average of nearly 20 percent of their monthly income on mortgage payments. However in the final quarter of 2012, Americans were paying 12.6 percent of their income on mortgage payments as rates are at between 3 and 4 percent.

Zillow Chief economist, Stan Humphries comments that “The days of historically high levels of property affordability are numbered. Current affordability is almost completely dependent on low interest rates, and there is no doubt that US interest rates will begin to rise in the next few years. This will have an effect on demand for housing as homebuyers will have to spend more of their incomes in order to buy a US property. US property values will have to either remain stagnant while incomes catch up or home values may fall in some markets.”

Property4peanuts comment

There is no doubt that US interest rates will have to rise at some point. However, now is a great time for US buyers to snap up property using cheap mortgages whilst they still can. With interest rates fixed at less than 4 percent for 30 years, it’s a unique opportunity to take advantage of some of the incredible discounts available in the US property market.

Cheap US mortgages have not particularly affected the market for homes under $100,000 which tend not to be available for finance. Since the housing crash, US banks, despite offering cheap loans, have tightened up their requirements for lending considerably.

Sales for American properties under this price band tend to be purchased by cash or private financing, greatly reducing the potential for a mini-bubble that others sectors of the US housing market might be experiencing. And should there be a correction or stagnation in US home values after a rate rise, properties under the $100k band are a lot less likely to be affected.

Thinking of investing in American property? Check out our great value US cash flow properties.

Easter special! Our latest Kansas City cash flow properties

April 2nd, 2013

It may not look like a chocolate egg, but this turnkey Kansas City home is still a sweet deal! A full rehab was completed earlier this year and new tenants moved in mid January. It’s now generating a fantastic 23% net and could be yours for just $27,500.

This Kansas City home should not be overlooked for its modest appearance. The property has had an extensive refurbishment which has included new boiler, furnace, carpets, kitchen, bathroom materials and plenty more. It should be a relatively low maintenance US cash flow property for the future.

It’s deceptively spacious too at 1273 sq.ft. Comprising of 3 bedrooms and 1 bathroom, the home offers plenty of living accommodation and it set on a quiet residential street in the city.

Our Kansas City cash flow properties are not hanging around long on the market. Unlike some other US cash flow properties, these have been refurbished to a good standard. If you are concerned, independent inspections can be performed.

For more info on this great deal before it goes, please contact us!

Our latest Kansas City cash flow properties for sale

March 28th, 2013

We’ve had some great feedback from clients regarding our Kansas City cash flow properties. The prices are low; just $22,500 for a turnkey property and returns are exceptionally high (in excess of 20%).

Finding US cash flow properties that generate such high returns is not easy. Most US cities generate around 10-12% net for for rental properties. So to find somewhere that can double that is incredible.

We have just published on Property4peanuts our latest Kansas City cash property and it won’t last long. It’s just $22,500 and has had a wide range of updates done to it.

To see more details on this turnkey Kansas City property, click here.

The property benefits from new siding, newer thermal windows, updated bathroom, works to the kitchen, refinished flooring, carpets in the bedroom, new boiler and new alarm to name but a few.

It’s been snapped up by a Section 8 tenant on a one year least at $560 per month. Through the Section 8 scheme, the US government pays the majority of rent directly to you, the landlord.

The anticipated net return is just under 24%. There may of course be vacancy periods and maintenance in future which can’t be budgeted just yet. But regardless, this property will pay for itself.

We really can’t think of a better investment than US cash flow properties at the moment. And you can benefit from this growing market for just $22,500.

Full management tailored to overseas property owners will be in place. Photos below of the property, ref. US606.

Kansas City cash flow properties for sale

March 28th, 2013

Property4peanuts is pleased to announce our new area for cash flow property investment: Kansas City!

We’re very excited about this new area as it offers rock bottom prices but excellent cash flow. With some parts of America seeing extensive price rises, bidding wars and in some extreme cases, mini-bubbles, Kansas City offers a stable but low cost alternative.

For almost half price of other cities but receiving the same amount of rental income, our turnkey Kansas City investment properties are a great low cost entry to the US housing market.

We’ve worked on getting a great team together to handle everything from refurbishments of our Kansas City properties to tailor made rental services for overseas landlords. Good rental management is the key to successful overseas property investment.

About Kansas City

A new economic boom is happening in America. It’s not the new oil shale boom or a Gold Rush, like when people flocked in 1948 to California to make their fortunes.

This time, investors are heading to Kansas City to find “gold” in residential investment properties.

Kansas City is one of the best-kept secrets in the nation. It was voted in 2007 as the third best city for relocating families, and it boasts a vast array of entertainment, professional sports, Fortune 500 companies and shopping districts.  Only Rome has more fountains than Kansas City!

But what’s making out-of-state investors so excited about Kansas City?  The mortgage meltdown has brought a good supply of foreclosures to the market, making makes Kansas City a gold-mine area for buy investment properties.

This temporary glut of foreclosed American properties gives a once in a lifetime opportunity to buy into a real estate market that has always been a highly stable, with appreciation averaging 3 percent to 5 percent annually in most areas.  Whilst large market areas on the coasts took a beating with falling home values, Kansas City experienced a near normal trend of small appreciation.  Combine that with low unemployment and lower-than-normal rental vacancy rates, and Kansas City is a natural place to invest.

The average price for a single-family rental property in a good neighborhood is in the $25,000 to $40,000 range, with rents averaging between $600 and $900 per month. That combination makes for a low initial investment, with a positive cash flow that can’t be found in most parts of the country. Return on investment, even after all rental costs have been included can be up to 25%!

Now has never been a better time to find a good tenant. Half of the people who want own a home no longer qualify because of the current status of the mortgage industry.  These are good people with families who still want and deserve a nice place to live. That makes for higher demand in rental properties, with a higher quality of tenant than has been seen in the past.

Kansas City cash flow properties

Property4peanuts finds local opportunities for our real estate investing clients. We research different neighborhoods and determine which areas are most desirable in regard to affordability, value, tenant desirability, etc.  Once we have identified an area, we will seek out properties in distress due to foreclosure or other reasons.

After the property is purchased, we have an independent inspection done to identify any potential problems regarding mechanical or structural issues, and then complete the rehab to code and tenant desirability.  Once the rehab is complete, we employ a good local property manager to place a carefully screened and qualified tenant in the property. After the unit is occupied we market the property to investors at 60 percent to 70 percent of appraised value.

The unique part of our program is that it is a HANDS OFF, turn-key approach to Real Estate Investing. We take care of the whole process, saving you a lot of time and hassle. All you need to do is figure out what do with all of your extra income each month!

Our Kansas City cash flow properties start from just $22,500 and we have some great Kansas City turnkey homes in the pipeline too! Why not sign up to our newsletter to get properties to your inbox as soon as they are available!

Is this the cheapest land for sale in Florida?

March 19th, 2013

Is this the cheapest land for sale in Florida?

It’s not only Florida homes that have been hit hard by the housing crash. But land values in certain of the state have been hit equally hard.

Often overlooked, land investment can be just a lucrative as property investment. Although you will not get rent, land has lower entry costs, cheaper holding fees and no management required.

Plots, when selected in the right area and at the right price, can be ideal as a “land banking” investment. The idea is simple; purchase a plot of land and hold it until the market rises. Once the market has risen sufficiently, sell the plot for a profit.

Florida broke tourism records in 2012 when more than 90 million tourists visited, 3 million of them Canadian. The state is still a top retirement destination and the property market is bouncing back from its recent woes. Even home construction is slowly starting to pick up.

Double your money

Some plots are expected to double in value over the next 2-3 years. But the key is buying in the right area. The plot must be in an area that is zoned as residential as that means you will be able to obtain a building permit (or the person that you sell onto is able to get one). Utilities are much easier to connect too.

Avoid Florida land for sale in areas that do not have residential zoning and are in effect, in the middle of nowhere. These will be the hardest to sell on and with the least profit, if any.

Before we get Florida lots and offer them for sale, we always check the sale history of the lot (or similar ones close by). A number of the lots we offer we selling in the region of $25,000-$40,000 back in the peak time of the US property market (2005). We offer them for the sale at around $5000 on average which is a huge saving.

Prices won’t bounce back to 2005 levels in two years, or probably for a good few years. However, real estate analysts believe that Florida land prices will go up over the next two years and doubling in price is a reasonable expectation.

Low holding costs

We’re often asked what sort of holding costs are due on our Florida plots. In all our lot descriptions we show a breakdown of the holding fees and on most plots they do not exceed $150 per year in property taxes. These can be paid from a distance and online so keeping on top of them is easy.

Plots that are located within gated communities are usually subject to Home Association Fees (HOA) which will raise the yearly holding costs. These vary depending on the location but are on average an additional $200 per year. We’re careful to choose lots located in stable developments where no sudden HOA fee increases are expected.

Because the plots in Florida that we offer are all buildable lots, they will often be subject to what are called “Impact fees” at the time of obtaining a building permit.

An Impact Fee is charged by a local government when a building permit is issued to cover (or partly cover) the costs associated with providing public services to the building.

The cost of impact fees in Florida depend on the location of the plot and the size of the building you want to build. The bigger the building, the largest the impact fee.

Some cities have taken the initiative to reduce or remove the impact fee completely to stimulate new development. For example, the plots for sale in Interlachen that we offer are not subject to any impact fees. Lots for sale in North Port, in south west Florida, have had their impact fees reduced by 50 percent to around $1800 per property (for a 3 bed, 2 bath home).

Where can I find cheap Florida land for sale?

Property4peanuts offer a selection of carefully chosen building lots in Florida for investment. Each plot is located in a residential zone and therefore has outlying planning permission.

We specialize in offering plots for sale in Orlando, North Port, Port Charlotte, Punta Gorda and Interlachen. Plus other regions in south west Florida. Our prices start from just $2000 per lot and the sizes average 10,000sq.ft which is ideal for building a 3 bed, 2 bath property on.

Our prices are the lowest around and we always offer an excellent selection in various areas. Click here to view our selection of cheapest Florida lots for sale.

Price rise due on Bakken oil accommodation offer

March 13th, 2013

There has been big demand from across the world for units in our Bakken oil area development. Phase 2 is sold out and Phase 3 will be offered for a higher price. With annual return on investment of over 40% it isn’t surprising demand has been so high.

There is a window of opportunity to purchase units before 26th March when the price will rise from $44,950 to $49,950.


For those of you who aren’t up to speed on the exciting Boom that is oil shale development, here’s a quick overview on the opportunity.

Profit from the new oil and gas Boom in America.

May be you haven’t heard, but the new King of world oil and gas supply is going to be…America!

To give you some idea about the scope of these discoveries, consider that the total proven oil reserves in the United States today stand at 21 billion barrels. But in each of the major oil shale discoveries there are more than 20 billion barrels of oil.

That’s almost 17 years’ worth of natural gas — the cleanest burning fossil fuel on the planet — from just ONE shale deposit.

That’s more oil and gas reserves than Saudi Arabia and UEA combined!

Make 40% pa on this opportunity

With all this cash being generated in the new oil American boom, how to profit as an armchair investor? One of the best ways is to provide accommodation. At present, the area is crowded with camper vans as workers can’t find accommodation. Some are even sleeping in their cars – no joke when temperatures plummet way below zero in North Dakota’s winter.

Property4peanuts is hugely excited to be offering units in a new development in the oil area. The development consists of large 76ft units offering 5 self-contained, rooms with 2 beds and furnished to a high standard.

Each mini hotel comes with full, dedicated and professional management in place to provide a passive, “hands free” income for investors.

Offer 1: A 50% share of one mini hotel unit for $24,950 

Income Estimate: 39% Return

****PRICE INCREASE to $26,975 DUE ON 26th MARCH***

Offer 2: 100% ownership on one mini hotel unit for $44,950.

Income estimate: That’s 43% Return!

****PRICE INCREASE to $46,950 DUE ON 26th MARCH***

Having trouble believing such high returns? Then why not go for our Guaranteed 25% option for 5 years!

We’re confident that this high income will be achieved as this isn’t a normal property rental markets – it’s about riding a huge boom. However, if you doubt you’ll make up to 43% net return, then there’s an offer of a guaranteed 25% return on your money each year for 5 years, written into the sale contract. The management company will keep the extra made above this figure.

No wonder we are getting great take up of this offer by investors. To beat the price rise on the 26th March, contact us without delay.

Read some of the latest news on the Bakken oil boom area:

- More money to be invested in oil boom towns

- Study shows decades of oil production for Watford City

- Big population boom pending for North Dakota towns

- North Dakota booming on back of oil production

 

Memphis real estate and manufacturing gains momentum

March 12th, 2013

The Federal Reserve release their latest Beige Book report in February and according to the results, Memphis has done well and the 2013 outlook for the city is good.

Memphis property sales increased by 9 percent in January and interestingly, new home permits increased by 9 percent.

For the past few years since the US housing crash of 2008, there has been little to no new home construction in the city. But late 2012 and early 2013 has seen a shift and builders are re-applying again for permits.

According to the Fed’s report, commercial real estate in Memphis remained stable and this mirrored their previous 2012 end of year report.

There was further good news for manufacturing firms in Memphis. Fewer forms reported plans to scale back operations and the area has seen a noticeable boost in manufacturing activity.

American households regain pre-recession wealth

March 11th, 2013

US households have managed to claw their way back to pre-recession levels of wealth. It’s taken over five years but thanks to increasing stock values and an improving US real estate market, US citizens have finally gained the $16 trillion in wealth they lost during the Great Recession.

The Federal Reserve stated that household wealth equated to $66.1 trillion at the close of 2012. This amounted to $1.2 trillion more than three months previously and 98 percent of the pre-recession peak.

Wealth bottomed out in 2009 at $51.2 trillion but American’s net worth has bounced back to an impressive $67.4 billion.

Aaron Smith, a senior economist at Moody’s Analytics said “It’s certain that we have surpassed that peak in the first quarter.”

Household wealth, also known as net worth, comprises of the value of assets such as real estate, stocks and bank account (minus any debt).

US home prices have steadily increased across the country further boosting household net worth’s.

Property4peanuts have a great range of some of the best value American properties for sale. Our homes are located in various cities throughout the States and all come with full rental management and excellent capital appreciation potential.

Memphis economy and real estate market update

March 6th, 2013

At the 2013 Commercial Property forecast that was held last Thursday, Memphis was the centre of attention. Memphis is regarded as a city that is at the pinnacle of transportation due to its great air, rail and road connections. It’s central location within the US has attracted major companies over a diverse array of industries.

The city is investing further its rail facilities and as result, more rail business is being siphoned off from congested Chicago. With America experiencing a manufacturing renaissance, transport is important.

Over the past three years, more and more companies have turned away from Asian manufacturing and are coming back to America. Stronger copyright and patent protection combined with lower energy costs and an unmatched infrastructure has now meant it’s more economic for a number of companies to manufacture again in the U.S.

For firms looking to obtain finance, the conference highlighted that the time was now to take on cheap credit. Interest rates are incredibly low right now but that is expected to “change dramatically” said KC Conway, Colliers International’s managing director for real estate analytics and previously of the Federal Reserve, who spoke at the event.

Conway went on to say that “2013 may be when the window closes on cheap debt.” With the downgrading of U.S. debt, interest rates could be forced up. And now is the time to get cheap finance before the window of opportunity closes.

The real estate and commercial real estate sector in Memphis has a relatively steady year and condos in Memphis in particular, thrived.

Rick Fogelman of Fogelman Properties said the multifamily sector has been in “full-scale recovery” since early 2010. The credit crunch dropped the rate of homeownership from 69.2 percent in 2004 to 64.5 percent now, creating a bigger rental market. And the demographics for multifamily are strong, led by the large group of 22 to 35 year olds who have a high propensity to rent, Fogelman said.

The Memphis occupancy rate is 91.7 percent and the average rent is $706 a month.

The Memphis office sector needs more white collar jobs, said Kemp Conrad of Cushman & Wakefield. In 2012, Memphis experienced a negative absorption of 30,000 square feet. The city has done a great job increasing blue collar jobs via new companies like Electrolux and Mitsubishi, but needs to seek more office jobs, Conrad said.

We have some great value Memphis homes for sale with prices starting from just $32,000 for refurbished, tenanted and managed properties. Yields are 12 percent plus making Memphis one of the top overseas property investment choices right now. But hurry, the property market is increasing steadily and these property prices won’t be around for long.

To sign up to our weekly real estate newsletter for all our latest bargains or to talk to us about Memphis real estate, please don’t hesitate to contact us.

People flocking to oil boom towns like Williston, North Dakota

March 5th, 2013

Property4peanuts — Towns such as Williston, Watford City and Dickinson are at the heart of the new American oil boom in the Bakken area. As a result, people are flocking to these small towns like it’s a modern day gold rush.

Take Barbara Hylick as an example. Hylick was working at an Orlando truck stop when a customer gave her a different sort of tip.

“A gentleman that worked up here as a truck driver told me, ‘Barb, you need to come and check out what’s going on in Williston.’ And I said — what’s going on in Williston?”

Williston is one of the towns at the epicenter of the Bakken oil boom in North Dakota. The state is one of the least populated in America however it is at the start of a big population boom with tens of thousands of workers on their way there in 2013 in the search of high paying oil related jobs.

“It’s just very, very intense,” says Mayor Ward Koeser. “We thought it would get busy. But I don’t think anybody realized how busy it would get, how many people would actually come.”

This surge in population comes after years of steady decline in Williston. However over the past couple of years the town’s population has boomed from 12,000 residents to 33,000. Many people expect it to reach 60,000 residents by the time the boom ends.

It’s no wonder people like Barbara are flocking here. Williston has an unemployment rate of less than 1%, one of the lowest in America, and the minimum wage is one of the highest in the country.

“I don’t think ‘minimum wage’ exists in Williston,” says Koeser. “Minimum wage here is probably $15 an hour. If you don’t pay $15 an hour, you can’t get anyone.”

Williston has been a magnet for Floridians who have been drawn to Williston to reverse their luck after the credit crunch wiped out the housing market.

Take Ivan Guerrero, a former Ft. Lauderdale mortgage broker that saw his business collapse in the recession.

Guerrero describes the economic downturn as a “nightmare” for him and his family, where he spent his entire life savings. “I went through everything, and I ended up with nothing. Then real problems started; not having money to pay basic bills.”

Like thousands of others in a similar situation, Guerrero decided to join the exodus to North Dakota, the location of one of the world’s largest oil reserves.

Previously inaccessible, Bakken oil that is located two miles below the surface, is being extracted by a process called fracking. Fracking involves shattering the rock with a high pressure blast of sand and water. The oil then flows from the broken rocks and is pumped to the surface. One oil well outside Watford City is pumping out an incredible 5,000 barrels a day from this process.

The Bakken oil reserves are massive, estimated to hold between 4 and 24 billion barrels. And most observers think the supply will last another ten to 20 years.

However, this amazing discovery which is expected to have a major impact on America’s economy and to reverse their energy troubles, comes at a price for Williston and similar towns like it.

There are regular traffic jams, long queues in supermarkets but the most pressure is felt within the housing market.

As ex Florida native Barbara Hylick says, when you decide to move to North Dakota “you basically choose to be homesless.”

When Hylick first started looking for a place to live in Williston, she found a studio apartment for $3,000 per month. After research, Hylick says “I realized that was cheap!”.

Hylick was lucky to snap up a place and many are not so fortunate. To park a camper van just north of Williston costs $800 per month and utilities are added on top of that. Residents have to insulate their camper vans from the cold and even with the freezing winter temperatures, the camper van parks are full.

The park manager, Beth Bartel, says that they regularly get camper vans that house entire families. “All living in a trailer. It makes it difficult.”

Despite the cramped conditions, Bartel has to turn away people regularly.

“I’ve had women come here and plead with me. They have three kids and are living in a field with no water, electricity or sewer because there are no vacancies anywhere.”

Many oil workers live in “man camps” which offer basic room and board to oil workers that work 12 hour shifts, seven days a week.

Rooms at man camps are usually paid for by the oil companies in need of workers. And for some, particularly the young men who make up the majority of residents, it’s a great set up.

Troy Mickler originally from Jacksonville, Florida, a cook at a nearby lodge says “I now make twice the money, literally twice, that I could make doing what I do there.”

Like many employees at the man camps, Troy works for 84 hours per week for six weeks in a row. This is followed by two weeks off. This arrangement allows him to save the majority of what he earns. On top of that “I have no bills here whatsoever. They pay for all of my lodging. They pay for all of my food. God, we eat steaks all the time. We literally eat whatever we want to eat, do whatever we want to do. And I bank 90, 95 percent of what I make, I bank.”

Another ex-Floridian from St.Petersburg, Charles Blust, put in 5,000 working hours in 2012. This is about 2 and half times a normal full time job. But he’s made good money after arriving in Williston with no money in his pocket. In the past year working in Williston he has managed to save $20,000.

Blust says that focusing on only the money is not a good idea. “The rate of turnover is quite high because that’s all they think about is the money,” he says. “They come up here and they don’t realize the work you have to put into it.”

For Blust, 46, the long shifts and bitter weather have proven too much. In December, he decided to leave Williston and return home to St. Petersburg.

“It’s cold up here,” he admits. “I’m from Florida, a real hot state. Come up here to frozen tundra, you know, it’s difficult.”