USA Foreclosures specialist Phil Gerathy says investing in Foreclosed US real estate is a great opportunity for Australians and that the property management angle should not deter Buffett.
West Bloomfield, MI (PRWEB) June 18, 2012
When the "Oracle of Omaha" Warren Buffett recently began an interview with Becky Quick on CNBC's Squawk Box the intended topics were the state of the US economy and the stock market. However the topic of conversation soon turned to the US real estate market where Buffett said "If I had a way of buying a couple of hundred thousand single family homes and had a way to manage them.....i would load up on them". This was a pretty forthright view from one of the world's greatest investors particularly as Berkshire Hathaway has hardly any exposure to the american investment property market.
Phil Gerathy of USA Foreclosures agrees with Buffet but wonders why the real estate management is holding him back,Gerathy says "We manage a range of US investment property for Australian clients using our Michigan based team. Once you establish a strong system of vetting potential tenants, rent collection and managing the upkeep of the properties it is just like any other business, it requires good people and good systems. The major key now to investing in US real estate is to get the best deals at point of purchase, the economy is moving forwards and demand to purchase foreclosed real estate is growing so buying through the right channels is vital. Most of the property we buy on behalf of Australian investors is not really available to the open market."
Bloomberg reported this week over $6 billion was being raised by hedge funds and private equity funds to invest into the us real estate market and take advantage of cheap foreclosed property prices that belie a strengthening rental market.
According to Trulia.com, the state of Michigan where USA Foreclosures operates, has 164,800 homes for sale on the open market at an average listing price of $197,484. Gerathy says "We are managing to secure family homes that are achieving rents of $900-$1200 per month for between $50,000 and $75,000 in quality cities where jobs growth is stimulating rental demand."
If Warren Buffett is right that real estate in the USA is the bargain of the century then with the Australian dollar at virtual parity with the US dollar, it would seem an extremely attractive investment for Australians as their own residential investment property market yields only 3-4%.