Investing from Overseas (at least for now)
Hello!
This is my first post, but by far it isn't my first time on biggerpockets.com. I've been silently lurking in the shadows trying my best to emulate a sponge. My experience with real estate is somewhat varied. I grew up with real estate agent parents in Southern California who specialized in HUD homes and first-time homebuyers, but never really delved much into REI.
As for me, I’ve just been a wage earner, working in Silicon Valley for a little after college, and then joining the military for a couple years as an officer. During that time I purchased a home next to the base at which I was stationed. At the time, my decision to buy vs rent was predicated on the cheap price of building a home, as well as the phenomenal rental potential due to a steady stream of 3-year tenants from the base. This has so far worked for the past 3 years exceptionally well.
I now work overseas with frequent trips to the US. When I’m stateside, I have a rather transient base, usually crashing with friends and family in CA, but by no means limited to any specific geographic region. Very little overhead (only car insurance) combined with a decent income have prompted me to be wiser with my capital, as I know this transient lifestyle has an expiration date, and when that time comes I would like to have some steady income to show for it.
Because I’m not able to be present in a regional market for months at a time, and I will be a relatively absentee investor, I am looking for properties to buy-and-hold. Some locations I’ve considered are Indianapolis, Kansas City, Dallas, Charlotte, and Baltimore, because they appear to be better suited price-wise for someone just getting into the game, and their rental markets seem stable and profitable.
I'll be in the US for about 4 weeks from the end of May to the middle of June, and in that time I hope to visit at least one potential location to meet with brokers, and try and establish a working relationship with an accountant and lawyer, and other investors. Finding an REIC is a top priority for this. I'd like to form an LLC from the beginning, so this travel and other related expenses will be deductible. Even though I work overseas, I am by no means off-limits to the IRS…
So after that incredibly long-winded introduction, here are a few questions:
In forming an LLC, or S-Corp in the wild case I find something to flip, in what state would I have to incorporate? I currently hold Texas residential status, as that's the only state I own property. Do I have to incorporate in Texas? Or can I use a Nevada corp? Or is it the state where the investment property is?
Do these investment locations sound correct?
I'm leaning toward multi-family residential properties, as I like the idea of having my investments somewhat more concentrated to take advantage of synergies. Is this wise for someone starting out, or should I stick to SFR to get my feet wet?
I qualify as a first time homebuyer, however I’m not particularly interested in buying a home to be owner occupied. Am I wrong in thinking that my financing opportunities will be limited to 20-25% down investor loans? I have pretty strong credit, a decent amount of capital, and healthy income; are there other financing opportunities I’m overlooking? I’m also not opposed to seller-financing or other creative options, but being a mostly absentee investor, I don’t think I’ll have the opportunity to seek out these sorts of deals.
Lastly, I will be transitioning back to the states in the next year, and will most likely be in the Washington DC area. Would it be wise to focus more on Baltimore and that area, just to have proximity in case something goes really wrong?
If you’ve made it this far, thanks for reading and I’m looking forward to your inputs.
Christian