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. In fact, San Diego prices have just recovered their highest level from March 2006 (Case Shiller Index)

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. If you’re into a long-term strategy, then time is on your side. 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, Miami or San Diego have seen housing prices surge over the past few years. Truly, with a median sale price of $600,000, it has become difficult to purchase even one’s in a primary residence (and sometimes even renting) in San Diego.

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 rent for instance!

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 managee 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 such deals in Cleveland, Florida, New York, California and Texas.

Below are 3 examples of deals sourced and managed by Altitude Realty for their investors.

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%

Obviously, Altitude International Realty will assist you all along the acquisition process and will ensure you are compliant with all the legal, tax and administrative requirements. This is what we do !

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 contact@altitude-realty.com