It’s property investment, but not as we know it. On a mission to substitute her day job with a property portfolio, Emily Greenaway looked further afield to capitalise on new opportunities – but nothing could prepare her for what she would find.
“In January this year I took a big step in my property investment journey.
I’d been going hard and fast in the Australian market ever since I decided I wanted to replace my day job with money generated through property investment – but increasingly I was hearing of even better opportunities overseas.
I like to invest for short-term wins – renovating to release equity, flipping properties and entering joint venture arrangements.
From what I could gather from the investors I was speaking to, and the media reports I was reading, the US property market offered even more opportunities for this kind of short-term investment strategy.
Despite the GFC occurring all the way back in 2008, the number of foreclosures still happening over there meant there were plenty of opportunities for me to capitalise on low-entry price points.
So, I enrolled myself in some US property investment education, and initially started looking at Cleveland and Buffalo.
At first I was looking from Australia, but when it seemed like I would never be able to gain momentum in Cleveland and Buffalo, I switched my sights to Texas and decided that it was time to tackle the problem on the ground.
I spent three weeks over there chatting to lenders and establishing a network of property investors keen to buy property under market value – a crucial part of my investment strategy.
Then the opportunities started piling in thick and fast.
But nothing in my Australian investment journey could prepare me for how things work in the US.
Being a proactive investor over there essentially involves becoming the salesperson or the middleman – spruiking your solutions to people who are often in desperate situations.
Some of the most common investment opportunities that I’ve worked on so far are centred on identifying properties that are for sale by foreclosure, or in the stages of pre-foreclosure, and approaching the vendor to negotiate an offer.
The level of public disclosure in the US is insane, and I actually have access to software that allows me to search for addresses where foreclosures are taking place.
Then, having identified the property, I attempt to secure it for a low price, or sometimes by simply agreeing to take over the mortgage.
I can then on-sell the property to other investors on my database – the ones I've met via my course or during my time in the US – making a quick profit in the process.
This is called an assignment deal, and eventually I want to be doing five of them a month. The profit margin can range from $2,000 to $10,000 dollars, depending on the circumstances. So far I've done three of these.
I like to think of it as a win-win situation. I'm helping a desperate property owner who’s behind on their mortgage repayments escape from years of bad credit history, and helping other investors find property at what is still below-market value – even when my margin has been accounted for.
It does, however, involve taking the time to talk to people. Because of what happened with the GFC, there are still a lot of people hurting, and you can’t just go in and do real estate in the traditional way. A lot of the time, people don’t want to sell. They've got pride involved and they don’t want to be insulted by people coming in and just bidding them down to the lowest possible price.
This was initially an obstacle, but I’ve now come to think of it as a case of problem-solving, as opposed to pure property investment. If you can go in and potentially solve a problem for somebody and help them to move on with their life and to help them get out of their current horrible situation, that’s when it becomes an easier scenario to digest. That’s how you have to frame the process.”