Prices / Market

Why did the US property market collapse?

Because pre-crash the qualification to get a housing loan was simply having a pulse, in fact banks even gave loans to dogs. If you don’t believe us, watch ‘The Big Short’

Is the market going to collapse again?

If the banks again start offering 110% loans to every man and his ‘dog’, then yes it will crash again. Will it happen again soon? Not likely. Too many people are still licking their wounds from 2008 and there have since been major overhauls to lending an appraisal laws making it very hard to repeat the same mistakes.

What is the average cost of the properties we develop and sell?

$140K at the lower end ranging to $195K at the top end. This keeps the investors deposit between $30-$50K for an 80% LTV loan and enables us  to offer 13-15% cash ROIs on most of our properties.

How much do the properties rent for?

Rentals for the upper end of the market are calculated as 1% of the purchase price. Therefore a $150K property would rent for $1,500 per month. However, be careful applying this formula to smaller floor areas in expensive locations as these rents can easily range well over $1 per sq ft.

How big is the rental market?

Quite simply, it’s huge! Post crash there has been permanent change in the way people view housing. The first being the millions of people who destroyed their credit and will never be able to own again and then there’s the new generation (Millenials) who don’t want to own property. Of course this is fantastic news for investors who would like to own the property that the renter cannot or does not want to own.

The type of properties for the best cash yields?

Duplex, triplex usually offer the best cash yields, but usually at the expense of capital growth.