Foreign buyers spent a whopping $82 billion on U.S. properties in the past year

Some interesting stats on foreign buyers investing in the US property market.

Foreign buyers spent a whopping $82 billion on U.S. properties in the past year (with the year ending March 2011). This is a $16 billion increase over the previous year. The National Association of Realtors came up with this figure in its recently released report, 2011 Profile of International Home Buying Activity.

U.S. homes (especially with the recent housing market challenges) are less expensive than comparable foreign properties. Owning property here also offers rental opportunities for foreign investors and the opportunity for massive capital growth.

Interestingly, Canadian buyers still remain the largest percentage of foreign buyers, weighing in at 23%. Canadians have topped this bracket for the last four years. Chinese buyers were second highest, at 9% and India, Mexico and the United Kingdom tied for third.

NAR’s report says the average price paid by these international buyers was an impressive $315,000. That’s nearly $100K above the U.S. buying average.

Top buying places include; Memphis, Detroit, Atlanta, Florida and Arizona for foreign investment.

Interestingly, the high average price paid for property at $315,000 is way above the cost of buying in some of our target markets like Detroit, where you can invest in our program from $36,000 and receive a return on investment above 13% on every deal!

download our Detroit investment decision guide.

Detroit – A Unique Opportunity

I’m sure all of you that read our newletter will know all about our Detroit program and will of likely received our investment prospectus.

We first highlighted the Detroit opportunity over 18 months ago and have since sourced over 90 properties for new and experienced investors within our program, which is hardly surprising given that it ticks every box we look for in an investment.

Key highlights include:

  • Can you buy below current market value?
  • What is the likelihood prices will increase over the next 5 years?
  • Local affordability – are locals able to buy and rent here?
  • What rental yields can I expect?
  • Is financing available?

The answer to all of these five questions is of course YES. Detroit offers investors a window of opportunity in which to buy property significantly below market value, often 50% whilst retaining high rental yields by taking advantage of the government’s HUD scheme.

A market leading product? Definitely!

We can offer financing, guaranteed for all our investors with a low, fixed rate of interest of only 3.95%.  Currently we are the only company offering financing.  And everybody qualifies.

Our properties start from $36,000, at least 15% cheaper than any other UK company.

A minimum 13% NET yield on our program.  Often higher, we only source properties that will give our investors at least this.

Watch us discussing our Detroit investment opportunity at the recent Bristol seminar Part 1

Key Points:

Low prices. 3 & 4 bedroom, fully refurbished houses from $36,000 – often 50% under market value.

High demand for rental property. Currently there are over 9,000 families on a waiting list for good rental property.

GUARANTEED rents. We focus on tenants on the HUD scheme (Housing and Urban Development.) The government will pay the rents directly to you every month. We now offer investors a 12 month maintenance guarantee as well.

Predicted capital appreciation. The biggest car manufacturers have been granted billions to reinvest in the city’s car industry creating thousands of new jobs for the local workforce.

Available mortgages. We can provide a very attractive level of financing GUARANTEED for every one of our investors, with fixed rates from 3.95%. We are currently the only company in the world able to provide financing.

Rental yields. As ex-homeowners have turned to rented accommodation demand has soared. A typical 3 bedroom home can be rented for over $800 a month. This means an average investment through us gives a whopping 13% NET yield – minimum!

Positive cash flow. Why else do we invest? Cash is king in this business and our properties give the investor guaranteed positive cash flow every month.
Currently, we are taking 2-3 reservations weekly.  If you’d like to talk to us about this opportunity, please complete your details here on our website or call us on (44) 0845 438 0634

$221 million Cobo revamp to add river view, replace arena in downtown Detroit

Cobo Center officials have unveiled details of a long-awaited, $221 million facelift of the city’s main convention center that includes panoramic views of the Detroit River and sweeping changes to its façade.

The bond-financed project will also mean the demise of Cobo Arena, the legendary but aging concert venue for acts from KISS to Jay-Z.

Two years after Detroit officials ceded oversight of the 51-year-old facility, regional leaders were to gather today in Cobo to unveil artist renderings of the project that is expected to begin in July and last until 2014. The work is the final stage of a $274 million project to revamp the 2.4 million square-foot facility that was last updated in 1989.

One highlight of the renovation is a three-story glass wall that will surround the light-gray building and provide a view of the Detroit River, as well as access to the Detroit RiverWalk from the building.

Cobo Arena will be replaced with a new 40,000 square-foot ballroom with meeting room beneath.

“It’s going to be a major change” said Larry Alexander, chairman of the Detroit Regional Convention Facility Authority. “It’s more open and accessible.”

Alexander said the renovation will make Cobo Center more inviting.

“It’s truly going to shine when you come down and look at the building,” he said. “We’re making use of what we have and better use of the footprint we have available to us.”

The announcement follows years of complaints by the center’s major tenant — the North American International Auto Show. Organizers spoke of leaving because they considered the 700,000 square-foot of exhibit space too small. Leaks and heating problems bedeviled exhibits, and some car manufacturers left the show that is said to generate $500 million to the southeast Michigan economy.

The improvements include new hydraulic systems powerful enough to lift cars so they can be exhibited on the second level of Cobo Center.

“We’re looking for space always. Things are getting better and better. Porsche came back, and Nissan is coming back in 2012. Everyone wants space,” said Jim Seavitt, owner of Village Ford in Dearborn and president of the Troy-based Detroit Auto Dealers Association that sponsors the January show. “We’ve got a space problem. We’re trying to make everybody happy.”

Cobo became a flashpoint for city-suburban divisions in 2008 and 2009, when the City Council initially balked at transferring control of the facility to a regional authority. Eventually, the city relented, and a five-member authority has overseen operations since September 2009. The first two phases of the renovations fixed the roof and other problems.

Named for former Detroit Mayor Albert Cobo, the center is the 19th largest of its kind in the nation, but its reputation has caused some conventions to look elsewhere. Alexander said the project will help bring back conventions and exhibitors.

The $221 million renovation project also includes:
• The creation of a new three-story glass atrium “signature space” for Cobo Center that links the main floor of Cobo with a new entrance. The glass atrium surrounds most of the building, allowing for a view of the Detroit River and linking the facility to the city’s RiverWalk.

• Major renovation to Cobo’s primary façade facing downtown, which will include a high-tech, computer-generated “media mesh” billboard announcing current and future conventions and other bookings.

• Reconfiguration of meeting and breakout rooms along Cobo’s south side, the area facing the Detroit River. Most of the exterior walls of the meeting and breakout rooms will be replaced by high-efficiency glass walls.

• Twenty percent increase in parking spaces.

• Construction of an additional loading dock ramp to street level.

• Additional electrical provision capabilities in exhibition areas.

Ford deliver biggest bonus to workers in a decade

Ford’s hourly workers have been granted an unexpected $5k bonus after Ford deliver their most profitable quarter since the recession started.

Ford released profits n 2010 of 6.6 billion – a massive boost to the automakers and the local economy in Detroit and surrounding areas.

The $5k bonuses will go out to the 40,600 hourly workers in mid-March, and are nearly 10 times greater than last years bonuses of only $450.

Many workers were elated by the news but believe they deserve more for the deep concessions they made to help the automaker survive the most recent recession and downsizing.

Economists say it won’t take long for the extra income to ripple throughout Metro Detroit and other areas in which Ford has sizable work forces.

“Things are definatley looking up for Ford, and it’s workers. These bonuses will allow employees to perhaps spend a little more on the high street, or perhaps upgrade their homes.”

Britons cash in on Detroit homes crash

British investors are starting to look at foreign property again, with some snapping up homes in American cities such as Detroit.

The recession hit demand for overseas property, with foreign currency brokers saying their business over the past two years has been dominated by expats selling their houses and returning funds to the UK.

However, brokers say the tide has started to turn, with FC Exchange reporting a surge in clients interested in using overseas property to boost income.

Nick Fullerton at FC Exchange said: “In the past six months or so, we have started to notice clients seeking to invest again in properties abroad. They have seen a notable drop in overseas property prices and are finding that the risks of owning houses abroad are acceptable compared with having money stagnating in a UK savings account.”

His firm has seen a 75% increase in inquiries from clients looking to buy in Europe, especially Spain, and America in the past six months. Property prices have dropped by 20% to 30% in Spain since 2007 and more than 30% in the US since the boom ended in 2006.

Fullerton said: “In particular, we have noted a number of clients expressing interest in US cities such as Detroit. The Michigan state authorities are working with estate agents to sell repossessed homes to investors, who will then let them to the growing rental market.”

Assetz USA, an estate agent, is seeking UK buyers for three-bedroom detached homes in Detroit, Michigan, priced between $45,000 (£27,700) and $55,000. They offer net rental yields of up to 15% backed by a state housing scheme. All were foreclosed, or repossessed, and the price includes taxes, fees and renovation costs.

The state scheme, called Section 8, provides accommodation for families with income of less than $71,000, many of whom have had their own homes repossessed.

Assetz USA said it had sold more than 100 homes through the scheme in the past 18 months, with all of them let within four months.

Unlike in Britain, where council tenants are allocated accommodation, Section 8 tenants are free to choose. Tony Halsall at Assetz USA said: “Their choice is limited only to those properties that have been passed as acceptable for the scheme by the state. Naturally, tenants will always choose nicely presented properties in good areas and this is the key to this proposition.

“The scheme is particularly attractive for long-distance landlords because the rent is secure and comes directly from the Section 8 programme. The tenants also tend to be stable working families who stay much longer than open-market rentals. The sheer number of bank foreclosures has left millions of former homeowners needing somewhere to live and the rental market is booming.”

Paul Dales at Capital Economics, the research consultancy, said: “The one big positive for Michigan is that prices have fallen so much — by almost 30% — that, relative to incomes, housing looks incredibly undervalued. Last year, housing in Michigan was more undervalued than in any other state apart from Nevada.

Kevin Gardiner at Barclays Wealth, the private bank, said: “Very few commentators seem willing to advance the possibility of a rebound in activity and prices any time soon, but compared to some of the booms seen in Europe, the surge in US house prices in the last cycle was relatively modest and has now been largely unwound. We would be less surprised than the market to see activity and prices pick up markedly in 2011.”

The comments here are exactly what we at UPI have been advocating for over 2 years now. It is also worth noting that we offer our clients the same investments significantly cheaper with prices between $36,000 and $40,000.

What’s more our finance options make the barrier to entry even smaller for our investors and enable them to make their funds go even further.

If you’d like to join our Detroit program, give us a call.

Kind regards,

Oliver Booth
info@usapropertyinvestor.co.uk
t: +44 (0)845 438 0634
m: +44 (0)7807 520 502