Events Archives | U.S. Real Estate Financing for Canada & Australia

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Building Even More Bridges,

Atlas Capital Management Launches Financing Program in the GCC

Atlas Capital is proud to announce our recent launch into the Gulf Cooperation Council through our Israeli partners. Our new countries include Israel, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The responses are already flooding in, and we are thrilled to provide our services to yet another part of the world.

We anticipate a sharp spike in volume because of this bold move. Don’t let this aggressive expansion place you on a waiting list. If you have hesitated to buy or have dragged your feet, NOW is the time to act (remember, Spring is the busiest time of the year in Real Estate!).

Investors from the middle East are active buyers in the global real estate market and continue to target core assets with long leases in safe-haven of US. Real estate. Unlike most foreign investors, Middle Eastern buyers focus investments in alternative asset classes, such as residential, hospice, and infrastructure. The recent decline in oil prices is making portfolio diversification more important than ever, to maintain income streams and investors must take a long-term view.

For current inventory and future opportunities, hit reply and email us or go directly to our website for video testimonials, instructional videos, financing details, and MORE!

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I’m going to tell you why investing in U.S. property from Australia is a financial game-changer. I bought this home in a golf community 4 years ago—and I bought it right! I got the lowest price on any house in the sub-division for the last decade. It was quite a coup. I have lived there for the last 4 years as well. Having been raised in Southern California, how could I ever have passed up an opportunity to live in a golf community for less than it would cost to buy the land for a garage in Orange County?

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I never made any real improvements, because I knew this was not our “forever home”. But now, having found our turn-of-the-century period style home with original hardwoods, arched doorways, leaded and beveled glass doors and windows…Well, I offered this home to our clients and friends, and one savvy investor jumped on it quickly. Smart move. The Australian couple that purchased this property bought one from us a year ago, and it has performed as promised. They were ready for two more, proving that investing in U.S. property from Australia doesn’t have to be difficult

Here is the video walkthrough. Yeah, I know! Excuse the wind in the background at the beginning. I felt it necessary to show the neighborhood, so I filmed the clubhouse and fairways in my moving car. I have a couple of typos, but I was anxious to show the new owner his most recent real estate purchase. My edit version was saved, but corrupted. Check the house out now by clicking the “play button” immediately below:

I have EVEN MORE great houses in inventory that are just waiting for new investor owners. Yes, I will always finance foreign buyers. I am the only guy in the world that can internally underwrite a 30-year fixed-rate loan for folks ANYWHERE outside of the U.S. that want financing for cash flow properties.

Stop wasting your money on real estate “boot camps” and worthless seminars. Stop wasting your head space on phony “no money down” schemes and dreams. Get off the fence and let Atlas HELP YOU!

Let me assist. I will place you into a NICE home in a safe and prosperous suburb community. If you’re planning on investing in U.S. property from Australia, we can guarantee you a home that you’ll take pride in.

I’m here to assist. Learn more by visiting our home page.

Have a great week everyone, and, as always, happy investing!

Ron Blum

Principal

Atlas Capital and Asset Management

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I cannot begin to say how HUGE of a response we have received from folks all over the globe in regards to our refinancing/cash out/new assets program—so we decided to show an actual “real time” transaction we are preparing to fund and close next week. This should give you some insight into how you can invest in U.S. property the right way.

Here is a case study of a new purchase/refinance that we are doing for one of our Australian investors. Sometimes it is nice to see how one of our clients has taken advantage of our refinancing program, and how he is using untapped equity sitting idle in Texas to build on his portfolio of assets.

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This property in Dallas above was purchased in 2013 for $120k. It has now appraised at $150k. It is rented for $1,300 per month. After taxes (they are HIGH in TX) at $179 per month and property management at $130 per month, the yield was $991 per month.

Our client COULD have taken $75k out with our program, but instead decided to take $50k to cover all loan and new purchase insurance and tax obligations. With a $454 monthly mortgage payment, he will now yield $537 per month.

The client is buying this large split level home below, 1/4 mile from Longview Lake. Great home. Great area. HUGE capital appreciation. Neighborhood comps are $120k+, but it is being sold to him for $102,500.

After loan payment, taxes, insurance, and management costs, his monthly yield will be $358.58 per month. THAT’S how you invest in U.S. property.

Combined, his cash flow will be $895.00 per month

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So, where is the benefit in reducing cash flow $90.00 per month? That’s a simple answer.

This client is using his current equity position in Dallas to add a second property to his existing portfolio. He has spread the risk of a single property across a second asset. If he owns one property and rent is late or the tenant moves, his cash flow is zero. If two are owned and there is a cash flow issue at ONE property, the OTHER covers the risk. Both Dallas and Kansas City are appreciating rapidly in value, so there will be higher equity and better resale value a few years down the road.

In other words, why would I own one of something if I could own two of something and receive better long term results? Why would I NOT spread and lessen my risk profile? And if I did not have to spend another dollar of my cash reserves to do it, why would I resist? If you’re going to invest in U.S. property, do it in the safest way possible.

Savvy investors get it.

Look here for more info on refinancing from our website.

Watch the 3 minute Atlas Financing Video below!

Feel free to contact me, and as always…….happy investing!

Ron Blum

Principal, Atlas Capital and Asset Management

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In my last article, I extolled the virtues of our 30-year fixed rate financing program for U.S. real estate investment. I pointed out the hard money predators, the shady ARMs (adjustable rate mortgages), the tricky balloon payment trap, and other “landmines” when it comes to the lending industry preying on unsuspecting investors. As the ONLY U.S. COMPANY THAT INTERNALLY UNDERWRITES 30-YEAR FIXED RATE LOANS FOR FOREIGN INVESTORS, I feel it an obligation to provide insights into the benefits that Atlas has to offer.

Prices are going crazy right now in our primary market. I am paying 50%-100% more for raw acquisitions right now than I was 18 months ago. It’s hard to even find a project house or fixer- upper in the cities where we prefer to be. Values have gone up substantially, and we are thrilled to see the market so robust and growing. We are even more thrilled to offer foreign buyers the opportunity to take advantage of this situation.

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So now let’s look at the most obvious benefits that obtaining a long term fixed rate loan can provide when considering U.S. real estate investment, or anywhere else for that matter. We will also explore the benefits for existing property owners using our EXCLUSIVE U.S. REFINANCING PROGRAM and how this tool can help you achieve even higher benchmarks.

BUILD A PORTFOLIO INSTEAD OF “BUY A HOUSE”-

Most investors that we encounter typically have allocated 60k or 100k for real estate investments. I don’t know why, but those seem to be the two magic numbers. Now, we do not carry any 60k properties. Cheap properties tend to be in lousy neighborhoods, attract crappy tenants, and have a high turnover rate. They also are much more susceptible to theft and vandalism. 100k properties (depending on who you are dealing with) have a high success rate, attract and keep good renters, and if, by chance, the kids leave their bikes out overnight, they will be there in the morning. The difference with Atlas is that with average down payments of 30k-35k, the 60k buyer can dig deeper and spend 70k and get TWO properties. The 100k buyer can dig a little deeper and get THREE properties.

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SPREADING RISK-

One factor will always remain a constant. Tenants, and people in general, run into problems. Life happens. Today is the 5th of September and we have already received a few phone calls from tenants that are going to be late with their rents (with a $100.00 late fee as a penalty, I might add). Life happens. When you have ONE asset and the Dad loses his job and can’t make rent, cash flow is ZERO. When you have the same 100k-120k in THREE houses, and Dad loses his job, you still have cash flow from the other two properties. It goes back to the “all of your eggs in one basket” theory, and U.S. real estate investment, like anything else, is not immune to that theory.

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LOWER INITIAL INVESTMENT-

Any U.S. real estate investment carries an inherent risk or the potential for disappointment in either asset quality or performance. I would sure hate to find out that my property, or properties, are underperforming had I paid full cash price when I purchased the asset. With financing, the initial down payment is a fraction of the amount when compared with a full price cash acquisition. If a property does end up shy of expectations, it is better to find out with a down payment at stake instead of full market value sucked out of your retirement savings.

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REFINANCE AND DIVERSIFY YOUR HOLDINGS-

I speak with a lot of investors who already own U.S. real estate every week, and perhaps the biggest thing we have to offer is our “cash out refinance program”. But before I go further, I should point out that this program is designed to assist in building up additional assets for a portfolio. We don’t provide this service to fund a mid-life crises or send little Jimmie or Jane to college. We designed this program so that folks with all of their equity tied up in a single asset could tap into that equity and obtain additional assets and so all of the items above would work in their favor. And best of all, the same rate and terms apply to our refinance program that are currently part of our new purchase financing program. Why have one asset in another market when you can diversify, buy more assets, spread the risk across a number of properties and cash in on the capital appreciation? If we’re advising on U.S. real estate investment, diversification is one of our top recommendations.

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Landmines versus Gold Mines

I have been the subject of numerous articles in foreign real estate industry trade magazines that have placed an emphasis on our financing program which was refined and implemented in 2013. And why not? After a while, most foreign investors give up on financing because US lenders won’t touch them unless it is with a garbage loan NOT worth a hill of beans. But we have set the new standard and want to renew your trust in foreign investment in U.S. real estate.

In almost every one of these articles I state that “Atlas is the ONLY Company that provides internally underwritten 30 year fixed rate loans for foreign investment in U.S. real estate”; So let’s examine what I mean by making this claim. I believe it is an important dialogue to have because I have seen some predatory loan products out there and have heard more than a few horror stories from foreign investors who either did not understand what they were getting involved with, or did understand and chose to roll the dice. Let’s look and get a better idea of the loan products available for out of country investors and where these products might be detrimental to the investment benchmarks investors hope to achieve.

LANDMINE- The 3/1 and 5/1 ARM

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I spoke with a small group of individual investors from Australia a few months back who had all found themselves in a pretty bad predicament. They had all obtained financing through a U.S. lender 3 years ago. They were given a rate of 8.25% on a 30 year note and they were satisfied with the returns based upon the rate and terms of the note. However, each year the debt service had increased and the yield had decreased. In fact, a number of properties were actually in a negative cash flow situation. That is because they did not understand the loan product they had signed for because the dirtiest detail was buried deep inside of the 40 page closing documents package. They had all signed on to a 3/1 ARM, or Adjustable Rate Mortgage and had no idea what they had gotten themselves into.

ARM’s and the adjusting interest rates are the equivalent of a drive-by colonoscopy. Where the rates readjust to, EVERY year for THREE years (or FIVE years if you’re on a 5/1) always go UP and never down. After all, does anyone think that banks are going into speculative long term loans without the deck stacked in their favor? There is a little known tool that banks use called LIBOR, or London Inter Bank Offer Rate. It is the benchmark rate that some of the world’s leading banks charge each other for short-term loans. It serves as the first step to calculating interest rates on various loans throughout the world and always go up. The “forces that be” can draw on any industry changes, anywhere on the planet, to adjust the LIBOR whether that is a downward change in the Venezuelan Sheet Metal industry or the Guano industry in the Galapagos. Either way, if you are on an ARM you are in trouble unless you have a LOT of yield and can afford to lose a large portion of it. Why take the risk with your foreign investment in U.S. real estate?

LANDMINE- Balloon Payments

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I’d like to paint a picture. Let’s pretend that you are going to the store to pick up a gallon of milk at the end of the day. You go the counter and speak with the proprietor, and he says the milk costs $4.00. Now you have the $4.00 in your pocket or purse but the proprietor offers you an interesting proposal. He says “Let’s do this- give me $1.00 today. Then give me a nickel every month for the next three years. And then at the end of three years give me $3.00”

I cannot think of one person who would buy that gallon of milk under those circumstances, but believe it or not there are real estate investors that do this every day with real estate which, last time I checked, is considerably more expensive than a gallon of milk. It’s insane (or at least I think it is) but for some reason investors use these tools for long term investment properties and are happy to get the “loan”.

Balloon loans typically require a pretty hefty down payment and even considering this, are amortized at 20-30 years which means that for the life of the loan you will be paying interest on the loan amount and very little if any principal. At the end of the term when the balloon goes up you will be paying off the entire loan amount or darned close to it. Better to pay for the whole gallon of milk than to use this worthless loan product! Keep an eye out for these balloon payments if you’re thinking of foreign investment in U.S. real estate.

LANDMINE- 50%+ Down Payments

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Okay, so…… This one is very easy. The industry standard here in the U.S. for loan fees is 2-4% origination fees (of the loan amount) and about $1500 in servicing/underwriting/doc prep/ fees + closing costs. When all is said and done you will actually be at around SIXTY-FIVE PERCENT!

And of course NONE of these scenarios above assist in providing for professional loan servicing, insurance escrows, or anything else.

I suppose I could do another “gallon of milk” parallel but I think we all get the idea here. Pay attention to fees when you’re considering foreign investment in U.S. real estate.

GOLD MINE- 30 year, fixed rate loans

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As I had mentioned above the goal of Atlas Capital and Asset Management is, has been, and will continue to be in providing legitimate, 30 year loans to foreign investors from around the globe. At closing our investors have the security in knowing there will never be an adjustment in their rates and there will never come a day, before the expiration of the 30 year note, that the loan will be called.

We are the only company that is providing the same leveraging opportunities to foreign investors that American citizens get to enjoy. We have leveled the playing field foreign investors!

All underwriting takes place on the same desk where this article was written. There is no broker daisy chain where promises are made but never fulfilled.

We are your property provider, your lender, your property manager and a true partner for the next 30 years. We have as much skin in the game as our investors do so you know you not only have a US lender but a true partner for the long haul.

Please visit our website at the link below or email me to schedule a time to  so we can further discuss your investment goals. I will be happy to answer any questions that you have about foreign investment in U.S. real estate.

Sincerely-

Ronald Blum, Principal

Atlas Capital and Asset Management

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I was born and raised in Southern California’s beautiful Orange County down here in the U.S. I also lived in Canada for 8 years, so I am pretty attached to both places. And I can state without any hesitation that Canada sure seems an awful lot like the U.S. was in the boom, and then bust years, of what I call “The Great American Real Estate Deception” era.

And guess what? Canadian real estate in 2017 is AN EXACT REPLICA of the U.S. real estate market in 2007.

Don’t think so? Well maybe it’s time to look at facts and statistics before you bury your head in the sand. I know, because I’ve been there before. Look at the charts and statistics below and tell me if this doesn’t look like a similar trend occurring right now in the Great White North. If that doesn’t open your eyes, then keep going and read what the Canadian Real Estate Board had to say yesterday.

As most of you know, I was right at the epicenter of the earthquake that shook the banking and real estate markets from 2005-2010 in the United States. During that time, I was strategically poised as the Acquisitions Chief and Servicing Supervisor for Continental Capital Corporation. We purchased bulk quantities of delinquent mortgage notes by the bushel. So many foreclosures were coming SO FAST that by 2008 we stopped buying paper and just started buying large packages of homes that had already been through foreclosure from floor traders with Homecomings, Ocwen, EMC Mortgage, Litton Loans, Fannie Mae, Freddie Mac and HUD. Man– what a great time to be in a place like that! Of course, we never bought into the idea of an endlessly surging real estate market and unlimited credit, so I did not take it on the chin like 80% of the country did. One look at the housing price index chart below will tell you all that you need to know.

(NOTE- The Housing Price Index, or HPI, is a broad measure of the movement of single-family house prices in the U.S. Apart from serving as an indicator of house price trends, the House Price Index (HPI) provides an analytical tool for estimating changes in the rates of mortgage defaults, prepayments and housing affordability)

Now, let’s look at 3 of the hottest U.S. markets during the “Boom Years” and what happened on the rollercoaster ride of ever-increasing price increases. Pay particular attention to 2005-2010.

AND THEN SUBSTITUTE THESE CITIES NAMES WITH VANCOUVER/VICTORIA, GREATER TORONTO AREA, AND MONTREAL. Can Canadian investors maybe learn a thing or two by what happened in the U.S. or can we really believe that this Canadian housing gravy train will last forever?

And remember, I said that 2017 Canada is a carbon copy of 2007 US? Let’s take a look.

Can this possibly be the big U.S./Canadian Deja?

And here is the saddest part of the whole calamity in the 2000’s. Most people did not do anything wrong or anything that was different or unconventional from their peers. They were refinancing every year because their home values went up another 30k-50k and they pulled the equity out for other purposes. Bank money was CHEAP & EASY to obtain and the credit available was almost unlimited. They were pulling short time 0% interest money off credit cards and using it to invest. The whole of the U.S. was in a feeding frenzy, indulging from a trough filled with unimaginable profits from real estate riches.

Everyone made money. Investors. Realtors. Mortgage lenders. Banks.

Everyone!

And so, when I read this report published in Canadian Real Estate Wealth Magazines “Daily Briefing” it sent a shiver down my spine and it should do the same for any Canadian real estate investor. Let’s read:

Breaking News: Homes sales decline ‘sharply’ in May

 

The Canadian Real Estate Board releases latest round of housing market stats.    National home sales dropped 6.2% month-over-month from April to May, according to CREA. That represents the largest sales decline since August 2012.

The most drastic sales decline occurred in the Greater Toronto Area, where the market experienced a 25.3% month-over-month drop.

Activity was also down “significantly” in surrounding areas, including; Oakville, Hamilton, and Barrie. “Recent changes to housing policy in Ontario have quickly caused sales and listings to become more balanced in the GTA,” said CREA President Andrew Peck. “Meanwhile, the balance between supply and demand in Vancouver is tightening up, while many places elsewhere in Canada remain amply supplied.”   CREA argues the sales declines in the Greater Golden Horseshoe Area are a sign of dwindling speculative home purchases.

“This is the first full month of results since changes to Ontario housing policy were made in late April. They provide clear evidence that the changes have resulted in more balanced housing markets throughout the Greater Golden Horseshoe region,” said Gregory Klump, CREA’s Chief Economist. “For housing markets in the region, May sales activity was down most in the GTA and Oakville. This suggests the changes have squelched speculative home purchases.”

The national average home price increased 4.3% year-over-year last month and newly listed homes increased 0.3% month-over-month.

“With sales down considerably in May, the national sales-to-new listings ration moved out o f sellers: territory and back into balanced market territory for the first time since late 2015,” CREA said in its release.

“The ratio stood at 56.3% in May 2017, down from 60.2% in April and the high-60% range over the first three months of this year.”

 

What goes up, must come down (except taxes!)

Is the balloon starting to go up? Are interest rates going to go up? Will investors, banks and the economy in general get caught with their pants down? How many investors will own a home worth 500k that was worth 800k just months before and that they couldn’t give away today? What will it be like owing 30% more on your family’s home than it is worth once the prices adjust (AND THEY WILL ADJUST SOONER OR LATER) and the markets come back down to reality? Selling it will NOT be an option when you owe 30% more than market value.

And perhaps most important is this- When the gravy train comes to a screeching and terrifying halt like it did in the U.S., do you have any special “piggy banks” that will provide 10-13% returns when the real estate riches are no more? Will there be an international real estate investment to fall back on?

For a viable, sustainable, long term investment real estate alternative you MUST diversify your strategies and investment options. If all the eggs are in one basket and it is dropped, all the eggs break and there is no breakfast tomorrow.

In the U.S., the markets have adjusted and are back on Planet Earth. And our company is the only company with internal underwriting that provides 30-year fixed rate lending for foreign nationals to own U.S. cash flow investment properties with11% returns.

Exchange rate? Well, if you were getting your returns in Canadian dollars that would be bad, but the same haircut taken is offset when the returns come back in USD.

Duh.

Click on the link below to learn more about long term passive income through U.S. financing for foreigners. After all, money is about more than the next fix and flip.