By

Stu Silver / “Uncle Zally” Zalman Velvel

  

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Once again I’m at the Kangaroo Convenience Store in Ocala, Florida. It’s early in the morning, I’m sipping hot coffee, and munching on a strawberry cheese muffin. It’s January 2011. A  new year. It’s been a few weeks since I wrote to you from the Kangaroo.

Speaking of a kangaroo, and a few weeks, I took my first trip to Australia in December. It was 30 hours of travel time, one way. I was invited by Stephen G, McKnight, one of Australia’s most renowned real estate experts, to speak to a group of savvy Australian investors at a seminar about investing in real estate in the States. Stephen McKnight wrote a  best selling book on real estate investing in Australia: “From 0 to 130 Properties in 3½ Years.” He is very popular, and his website, www.PropertyInvesting.com is a household name to 80,000 investors.

 For two days, I listened with my mouth hanging open in surprise, while  Steve McKnight created a safe, simple process for Australians to invest 10,000 miles away in the U.S. real estate market. I had never heard anyone explain the risks, and the rewards, with such complete honesty. He outlined in precise detail, step by step, how to invest in the U.S. real estate market for Australian investors who had never done so. How was he able to do this? By spending close to a million dollars of his own hard-earned money in the States over the last year. He’s the kind of person who would not suggest an investment path to members of his Internet community unless he had done it successfully himself, first.

 My presentation, given at the end, was on mobile homes and mobile home parks. This is how Steve McKnight introduced me:

“Ladies and gentlemen, I have read many books on real estate, but there is only one book that I can say ‘I wish I wrote that.’ That is Mobile Home Wealth, and the author, Stu Silver – Zalman Velvel is his pen name – is here today to inform you about mobile homes.”

When I stopped blushing, I became an admirer of Stephen G. McKnight.

 Before I explain the details of what I spoke about, permit me give you a  snapshot of the current Australian real estate market. It did not stop dead in 2005 and then retrace its steps back 20 years, like some of the real estate markets in the United States, especially in Florida. In Australia, property values almost doubled from 2005 until 2010. The average house in Melbourne, where I stayed, was around $550,000. Real Estate prices are at an historic high there.

The exchange rate is staggering. The Australian dollar is now equal to the U.S. Dollar, after years of exchanging two Australian dollars for one U.S..

 In Australia, if you shop wisely for a real estate investment, pay all cash  (yes, that’s right, not borrow a penny,) you might be lucky enough to earn 2 percent each year in positive cash flow. If you put up a reasonable down payment, and borrow money, which is the normal course for an investor, you will have to pay money out each year to support your investment. In the States, we refer to this as negative cash flow. Australians call it “negative gearing.”

 What did I speak about at the seminar? I demonstrated how one can regularly earn 10 – 20 percent on your capital investing in mobile homes, and mobile home parks in the U.S. while you are waiting for appreciation in price. When I showed the charts and figures, the Australians sat up in their chairs. Next, I showed them how the market in Fort Myers, Florida went from a median priced single family home in 2005 of $320,000, down to $90,000 today. They then became keenly interested.

 They bought my books and Wealth Building courses, and many are coming to the States, and going on “Uncle Zally’s Walkabout,” created especially for Australian investors. It is a full day of learning about American real estate on the ground, up close and personal, as we tour my mobile home parks and commercial property in Fort Myers, as well as properties for sale by bank foreclosure departments. All questions will be answered openly and honestly, to the best of my ability.

 I have to tell you it was a pleasure speaking to real estate investors who were excited about investing! (Especially, after I spent the last few years listening to American investors whine and complain.) There is a perfect storm of sunshine brewing for Australian investors who sell their Aussie real estate at an historic high, with poor cash flow, and buy American real estate at an historic low, with excellent cash flow … while the Australian dollar buys twice as much as it used to.

 At the end of the seminar, Steve McKnight asked two questions, two questions that put everything in perspective for Americans who are reading this article now. I am not going to give you those questions until the end. I want to tell you about the rest of my trip, first.

 After the weekend seminar, Steve McKnight opened up his home to me, which was much appreciated by this stranger in a strange land. I ate almost every dinner with him and his delightful family, while we became friends … forever. On the last day of my short stay in Australia, he took time out of his busy schedule to become my own personal tour guide. We toured the Australian “bush,” along with his friend, Aran. Aran is a native Aussie, who now owns three mobile home parks in the States that he is excited about.

 On our walkabout, we went to an area that was decimated by a killer fire, and is now rebuilding, ironically, using manufactured housing, what we call mobile homes. In that same area, we dined at a restaurant that was spared from the fire, where they make the world’s biggest hamburger, the “Buxton Burger.” (To watch a fun video, go to http://www.youtube.com/watch?v=nF3X9rBJzhY )

 We completed the day by going to an Australian zoo, where I photographed emus, Tasmanian devils, and of course, kangaroos, for my own family waiting back in the States.

 Aran warned me about petting or touching them. He said, “Be careful with Australian animals. They tend to be a bit cranky around humans.”

 He explained that emus, a close cousin of the Ostrich, have a razor-like nail on their toes that they can slice you open with. Tasmanian devils have the strongest bite per body weight of any living mammal (including pit bulls), and the kangaroo … yes, what about that cute little cartoon character wearing  boxing gloves on the little hands of its scrawny little arms? If a human gets a little too friendly around one of those cute little cartoon-like kangaroos, they will grab you with one of their scrawny little arms, and kick the ever-loving crap out of you with their powerful legs. Run into a kangaroo that is really cranky, and they could either kick you to death, or disembowel you with their sharp hind claws.

Those Australian animals are a perfect metaphor for the United States real estate market in the past five years – cranky, and a bit dangerous.

Now, what about the two questions that Steve McKnight asked at the end of his weekend seminar about investing in real estate in America. I thought about them during my 33 hours of travel, one way, returning to the States (the connections were not as good as the 30 hour flight over) :

1-   Knowing all the risks, the incredible rewards, and understanding the process, do you have the time, the money, and the will to invest now in the United States real estate market?

2-   If you don’t invest now, then what other plans to you have to create wealth for your family, and financial independence for yourself?

 What do you think, mate?

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