Real estate investing in the US: what are the best options
Despite rising housing prices, there are still good deals out there
Now 10 years behind us, the financial and subprime crisis is no longer a reality. Real estate prices have gone up and have actually exceeded their highest level from 2005-2007 in most of the top 20 cities in the United States
But this should not be a reason for not investing in real estate! There are still multiple opportunities to be found. Depending on your strategy there is no bad timing to buy real estate. Look at it this way, if you’re into a long-term strategy, then time is on your side. It is very likely that your real estate portfolio will grow over the next 15 to 30 years. If you’re into short-term, then as long as you can create value (by performing a rehab for instance), there is a potential upside for you.
The first key to real estate investing is to define what is your holding strategy. This is what will help you select the location and type of assets best fit for you.
Consider rental properties in cheaper states / cities
One of the key issues for the French investors in the US is that most of the main cities we all live in such as Los Angeles, New York, San Francisco or Miami have seen housing prices surged over the past few years. Truly, with an average sale price in Los Angeles at $2,4 million, $2,1 in New York and $1,6 million in San Francisco, these real estate markets have made investing in a primary residence (and sometimes even renting) very difficult.
People in that position should then consider buying investment properties outside of these major markets instead. States such as Texas, Georgia, Florida or Tennessee offer tremendous opportunities and very strong rental markets. Houses or condos in Dallas, Atlanta, Orlando or Memphis are still affordable with prices ranging from $100,000 to $250,000. 5% to 8% net rental income can be achieved. Altitude Realty just secured a new construction deal for one of their clients for $199,000 in Orlando. Projected annual net cash flow is $11,000 and Orlando currently shows a 7% appreciation every year.
Investment properties are also a great way to build wealth and smooth your Californian or New York rent for instance!
New Construction in Orlando for $212,496
Rental property in Atlanta for $135,750
Real estate syndication: another solid option for real estate investors
Another way to invest in real estate is to participate in deal syndications. Real estate syndication means that several investors regroup into one project which they buy together. Usually, one of them acts as the ‘sponsor’ or manager.
Altitude International Realty specializes in such opportunities for their investors. Altitude’s team sources the deals, analyzes and prepares the proper strategy (value add or long-term) and will manage the deal on behalf of the investors during the holding period. All investors own shares of an LLC and profits are split between investors based on their ownership.
The benefit of such deals is that it allows individual investors to co-own larger properties they could not buy individually. Altitude Realty mostly focuses on residential multifamily deals and has a solid track record of over 10 syndications. Depending on the deals, it is possible to invest from $50,000. Currently Altitude Realty sources deals in Cleveland, OH, Florida and Texas.
Below are 3 examples of deals sourced and managed by Altitude Realty for their investors.
4 rental buildings in the Bronx, NYC purchased for $16,5 million in January 2017
Multifamily deal in San Antonio purchased for $7.3 million in 2018
Multifamily deal – 20 units in Cleveland – $1,300,000 including rehab
Look further North and consider investing in Canada
If you live in the United States and are thinking of buying an investment property, you could also consider Canada, more specifically Québec. Québec offers a very stable market with solid yields and multiple real estate opportunities.
If you are skeptical about this, have a look at these few statistics:
- Average price in central Montréal is $357,000 CAD or $266,417 USD or 238,000 EUR
- Prices in Québec are 2 to 3 times lower than the rest of the country. Adjustment is likely to take place in the next few years
- Québec GDP growth is almost as good as the US (+2,5% in 2018)
- Québec economic forecast is one of the brightest in Canada
- Local financing is available to any foreign investor up to 65%
Conclusion: lots of options but make sure you are properly advised
While many options are available to investors to develop a performing real estate portfolio, the expertise of real estate professionals could be key, especially if you are not investing where you live. From property / asset management to tax and legal impact, Altitude International Realty assists you all the way and aim at making your investment as smooth as possible.
If interested in investing in real estate, feel free to contact Altitude Realty at +1 (917) 832-4789 or firstname.lastname@example.org.