Presentation

Purchasing Property in Dallas, Texas,

USA

Disclaimer

To date, we have purchased two properties (sfr’s) in the USA.

We undertook extensive research prior to purchasing and are happy to share our sources with you however you do need to do your own due diligence especially verification from a variety of reliable and reputable sources.

We do not accept any responsibility or liability for the information contained in this presentation.

The research conducted was for our own investment purposes.

Presentation Outline

Preliminary Research Why Texas Demographia Purchasing in Dallas Due Diligence Strategy Steps US Property Information.

Preliminary Research

Books – US related: Mortgage-Free For Life: Secrets Banks & Lenders Don’t Want You to Know! Richard Weathington & Beth M. Ley (BL Publications, USA) 2007

Getting the terminology right before doing internet search

Internet – which US states Check out: www.fhfa.gov (federal housing) Look for state HPI (housing price index) summary

US Housing Price Index

Source: www.fhfa.gov

Source: www.cyberhomes.com

Clear

Red

Why Texas?

Employment Oil Medical research Military NASA

2 of top 10 cities in US (Dallas & Houston) 2nd largest state in US (population & land size) Northern migration Stable house prices

Demographia

The Demographia International Housing Affordability Survey covers 272 housing markets in Australia, Canada, Ireland, Hew Zealand, the United Kingdom and the United States.

It uses the “Median Multiple” which is the median house price divided by the gross annual median household income to determine housing affordability.

www.demographia.com/dhi.pdf

Affordability Rating Categories

Median Multiple

Historically the Median Multiple has been relatively similar among the nations surveyed with the median house prices being generally 3.0 or less times the median household income.

This affordability relationship continues in many housing markets in the USA and Canada.

However the Median Multiple has escalated sharply in Australia, Ireland, New Zealand and the United Kingdom and some housing markets in Canada and the USA in recent years.

Housing Affordability Rating

Income Share for Mortgage

Texas Housing Market Ratings

City Rank Rating Lubbock 43 2.5 Beaumont 54 2.6 Killeen 54 2.6 Dallas-Fort Worth 66 2.7 Houston 85 2.9 Corpus Christi 95 3.0

Source: Demographia Affordability Survey, p. 3

Texas Cities

Investing Differences Australia LOC/Interest Only 25-30 years Everything All locations Solicitors Company + family

trust Rates

USA P & I 15 years Above $200K Local area Title Co’s LLC (foreign

nationals) Municipal taxes

Finance Length Brokers Banks Legals Asset

Structure Taxes

Purchasing Property in Dallas??

Population Lifestyle Affordability

Why Dallas Northside??

Why Dallas Northside??

Pre-Purchase Steps

Set up an LLC Find a buyer’s agent Search for a property Arrange a lender.

Set Up an LLC

Set up a US LLC Foreign Nationals can set up LLC’s. IRS taxes at local rates Set up with an EIN (Employer Identification Number) Able to set up LLC online (from Australia) Use an LLC provider offering a secretarial service Can use LLC to open a free Small business Check

A/C LLC is the applicant name EIN is the ITIN.

US LLC Set Up - SmallBiz

Find a Buyer’s Agent

Not as easy as it sounds! Can help with find REO properties A lot of Realtors but few specialists How to find?

Business contacts, ie. attorney, title company, etc Newspaper (Dallas Morning News) Internet (Google search) Yellow Pages (Dallas)

Once selected a few, put them to the test of finding you a suitable property, ie. mfr (multiple family residence [eg. unit complex]).

Find a Buyer’s Agent

www.dfwinvestmentrealestate.com

Search for a Property

Where to begin? Buyers Agents Newspaper Internet

Need to keep in mind who your rental market is going to be! For us its - female university students.

Property Search Issues

Property Information

House Size 1 sq. foot = 0.092903 sq. metre 1 square (100 sq. feet) = 9.2903

sq. metres Land Size 1 acre = 4,046.85 sq. metres 1 perch = 25.28125 sq. metres (Min. block size: 0.12 – 0.15 acre)

Property Location Zip code - important for statistical searches Zip code finder http://maps.huge.info/zip.htm This is handy when there are several zip codes for a

locality. Locality Profile Comparisons renters v/s owner occupiers www.city-data.com or www.uscitycountry.com

Dallas Neighborhoods

Plano 11th

Carrollton 15th

Richardson 19th

(Money Magazine Best Places to Live 2006)

These neighborhoods are beside “Interstate 75” and are located on the northern side of Dallas.

Dallas Neighborhood Zip Codes

Plano 75075, 75023, 75074 Carrollton 75006, 75234 Richardson 75080, 75081 Addison 75254, 75248 Sharon 75025 Allen 75013 Fairview 75069 McKinney 75069

Searching for MFR’s

Multifamily Residences sometimes referred to as “condo packs”.

Start with www.realtor.com Foreclosures (www.homepath.com) Establish price range, number of

units, etc. Use this information to register with

several buyers agents.

Property Information

Weighing Up The Deal!!

What’s involved in weighing up the Deal?

Down payment (deposit) 30% (foreign nationals) LLC setup $800 USD Title Insurance $500 USD Taxes 3% of property value Property Management 10% of gross rent Insurance 2% of property value Brokers Fee ?? Depends on agent Rental Income ???

Weighing Up The Deal!!

Rules of Thumb

30% Gross Net Rental Return Rent PA/0.3 = Price Offer for property This should equate to between 50 - 80% of the

property list price (Somersoft Forum) Rule of 2 2 x Purchase Price/1000 = < Rent per week (Dymphna Boholt)

Due Diligence Online property appraisals www.realquest.com www.eppraisal.com (*) www.realestate.com www.realestate.aol.com (*) www.coldwellbanker.com ww.cyberhomes.com

Looking for Finance in Dallas

www.professionalbankna.com

www.dallasincomeproperty.com

Purchase Steps

Make an offer Pay a down payment Offer acceptance Organise property inspection Undertake settlement

process.

Title Company & Attorney

www.nancyppattersonpc.com

Post-Purchase Steps

Locate a property manager Ensure property tenanted Set up Bank accounts, online

banking facility, Visa Debit card.

Finding a Property Manager

www.allpropertymanagement.com

Arranging Insurance Cover

www.homeinsurance.com

GPD USA Investors Tour

2010 - (Sun Sept 19 - Sat Sept 25) 5 Cities - Texas - 6 nights Dallas, Sherman, Austin, San Antonio,

Houston

Further Information

Go to: http://www.paragon-marketing.org To download:

Presentation powerpoint slides Texas Economic Outlook Demographia Housing Affordability

Survey US LLC information GPD Investors Tour Itinerary.

Thank You

Any Questions!