Finding a lender while living overseas

Charles Carillo

Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes

@Eric Sato

We have partners who are foreign investors. DM me and I will send you contacts for; attorneys, lenders, and accountants that they have previously used. It is important that you hire professionals that have experience working with foreign investors.

OP

Member since 2023 · 24 posts · 18 votes

Thank you for the swift response! I will look into those two resources. Before I dig in and read more / study up, do DSCR loans have limitations/requirements around personal loans vs via an LLC etc...?

Thank you once again!

OP

Member since 2023 · 24 posts · 18 votes

Quote from @Charles Carillo:

@Eric Sato

We have partners who are foreign investors. DM me and I will send you contacts for; attorneys, lenders, and accountants that they have previously used. It is important that you hire professionals that have experience working with foreign investors.

Thank you, Charles!

Well noted. I will be stateside from early July, so my homework this month is to build my checklist of people I need to contact for this first ever USA property purchase!

Alan Sue

Yokohama Shi, Kanagawa-ken · Member since 2016 · 38 posts · 14 votes

Hi Eric!

Welcome to BP as another expat in Japan!

I'm also in Japan, and there several of us floating around BP. If you're ever in Yokohama let me know and we can grab coffee.

I'm a little different situation than you as I do have a W2 based in the States while I am here. That did allow me to get the normal mortgage, but there are lenders out there do the typical mortgage for international investors that would not have a W2, or even a tax return. Of course the rates/terms/down payment/etc might be different depending on that.

I have also gotten some DSCR loans as well due to the amount of loans I have, it was the only way to get more ;) DSCR are even easier to get depending on the property and its potential income. Depending on the company some allow in your name, some require a LLC. The rates are also generally higher and the LTV is more dependent on the rental income(or potential).

If you're interested DM me and I can introduce you to some of the lenders I've used in the past.

In general though, don't give up, it might take a little longer to find one that works out, but it's possible! There are also a good number that can do a remote notary, so you don't even have to get notarized at the Embassy or a lawyer.

Tanner PileBusiness Member

Real Estate Broker · Colorado Springs, CO · Member since 2019 · 389 posts · 326 votes

@Eric Sato

Colorado Springs is a great spot for MTR. There are a few spots I like that have clusters of hospitals and entertainment in the city that will be good locations. DSCR loans are great options however most of them will only qualify the property based off long term rents not MTR or STR.

When I have run my numbers I have found this difficult to do with high rates over 7% and still cash flow. Depending on what your goals are for the property and appreciation play with minimal to no cash flow could work however I prefer to see a little bit of cash flow from each investment.

On average most DSCR loans require a debt service cover ratio (DSCR) of 1.15 meaning it rents at $1,150 and the mortgage is $1,000.

$1,150/$1,000 = 1.15 DSCR

I have some local lenders in Colorado Springs and Denver that I can connect you with!

Tanner Pile4.931 Reviews

Website View Page

1 Reply

OP

Member since 2023 · 24 posts · 18 votes

Thank you all again for your swift responses. This is a great "welcome to BP" experience.

@Alan Sue! Yay another JP based xpat (I have been here for 18+ years, so at this stage, I feel more like an immigrant). Your information is very helpful. I was wary of having to use a DSCR loan for my very first rental property in USA... but then again, beggers can't be choosers in some situations perhaps.

I will DM you to learn more about potential lenders who could work with me on a traditional mortgage.

@Tanner Pile. Thank you as well for the great information. I do have my hopes set on MTR and even STM. That is great to know about DSCR qualifying loans based on LTR rents though...

If I can ask you a question (most likely personal opinion): This is my first USA based property, or will be so I should say, so I am not looking for homeruns. I believe it was on BP podcast that said your first property should be designed to get you through the door / get your feet wet / get you to take the first step (all the sayings). That is what I am looking to do. Do you feel I should look for LTR, or still pursue a MTR (if I can find a lender), based on the current rates and Col Springs market?

I am 100% okay with playing the longterm appreciation game with minimal cash flow. I am looking to learn the steps and identify the areas where I want to go very deep and become an expert.

I am also okay with taking on more hands-on work, e.g. Airbnb arbitrage etc...

Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes

You can purchase non owner occupied. Many programs are available. Your income 280-300 covers all your housing, credit card, cars, student loans, Japanese properties, then the CO property needs to cash flow as a market rental not short term (without any experience).

Say you buy a $450000 house and PITI is $3090 the rents need to exceed that number. My guess is a $450000 house rents for $2700 max so you need more than 20% down- maybe 25% down.

Highest SFR rental is $3600 for a 5 bed house in Colorado Springs today. Price of that house was $790000.

This is just an example of how to walk backwards into finding property that cash flows.

OP

Member since 2023 · 24 posts · 18 votes

@Caroline Gerardo thank you for this. I do love working with numbers. I know BP has various calculators that can help, but I do need to get my general knowledge up and build the ability to do these basic math principles on the spot in my head.

I know there are basic PITI calculators out there, but I do want to learn the ins and outs of how much tax and insurance costs are in the different circumstances / situations.

Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes

Every state the tax and insurance may vary. Insurance in flood/hurricane/fire zone costs double. Use 1.25 % for tax and 4% for insurance as a starting point and add the HOA fees if they exist.

Rents advertised in listing might be incorrect. Go look for rentals available in the city/area to get a range.

OP

Member since 2023 · 24 posts · 18 votes

Quote from @Caroline Gerardo:

Every state the tax and insurance may vary. Insurance in flood/hurricane/fire zone costs double. Use 1.25 % for tax and 4% for insurance as a starting point and add the HOA fees if they exist.

Rents advertised in listing might be incorrect. Go look for rentals available in the city/area to get a range.

Thank you once again! Very helpful.

Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes

.4% for insurance I don't see the . in my post lol

Austin Collins

Real Estate Agent · Colorado Springs, CO · Member since 2020 · 5 posts · 0 votes

@Eric Sato I second what Caroline said about the cost of property and resulting mortgage with 20% down. Hard to make it cash flow here in the Springs, so putting more down is the only real way to make it work. Otherwise, maybe finding a major reno can reduce your monthly payment, but you would need a bunch of cash for the rehab and furniture. DM me if you need help sourcing properties. I’m from the springs and an agent, so I know the market well. Good luck with your start!

Josh Surver

Realtor · Colorado Springs, CO · Member since 2019 · 23 posts · 10 votes

@Eric Sato

I am a mortgage broker for CO but working remotely from Okinawa! You can get loans based on bank statements rather than a W2 and DSCR loans based on the property income like others have mentioned.

Happy to talk MTR since that’s what I did for my first property. I bought a townhome in CO Springs in Nov 2021 while I was living in Japan and for perspective, I have a tenant signed up for a 4 month stay paying $3,500/mo right now, and the mortgage/insurance/taxes is only $1,620/mo. Killer deals to be had, and I totally believe in the market. I’m trying to get another by the end of this year.

Shoot me a DM and we can talk more!

V.G JasonPro Member

Investor · Member since 2022 · 3k+ posts · 3k+ votes

Colorado Springs is a great spot to buy in. Fort Collins, too.

Carlos Ptriawan

Member since 2019 · 7k+ posts · 4k+ votes

Quote from @Eric Sato:

Hi,

I am new to the USA real estate game (new to real estate in general).

Quick Version: How difficult will it be to find a lender for purchasing properties in USA, while my W2 income is entirely non-US based Income and while I am primarily a resident of Japan?

Long Version: I live and work in Japan and my entire salary is Japan Yen based. I am however a US citizen with a 750-800 credit score (dropped from 800 recently as I opened 2 new credit cards, doing the flying/MileMethod/points strategy, and expect it to go up again in about 30 days).

I have US tax returns, as I do need to file both in Japan and USA. I also send majority of my money back to the states for investment purposes. I also travel back to the states a couple times per year (and could travel more often if needed).

Total Compensation (pre-tax) with Bonuses and RSUs is around 280-300k USD ATM. I also just purchased three single room properties in Japan, at 0% down, since Japan interest rates for investment loans are still only about 1.7% (0.3% for personal mortgage loans).

I want to purchase a property in Colorado Springs this summer as either a long-term or midterm rental (traveling nurses, etc…), and I want to know my best chances for finding lenders.

Any advice would be greatly appreciated.

Cheers, Eric Sato

You definitely need DSCR 1.2 loan with 30-40% down
Maybe you can borrow from Japanese bank and use the proceed to do financing here.

Japan Yen carry trade :) LOL

Elizabeth Rose

Rental Property Investor · Various states · Member since 2021 · 55 posts · 34 votes

Quote from @Alan Sue:

Hi Eric!

Welcome to BP as another expat in Japan!

I'm also in Japan, and there several of us floating around BP. If you're ever in Yokohama let me know and we can grab coffee.

I'm a little different situation than you as I do have a W2 based in the States while I am here. That did allow me to get the normal mortgage, but there are lenders out there do the typical mortgage for international investors that would not have a W2, or even a tax return. Of course the rates/terms/down payment/etc might be different depending on that.

I have also gotten some DSCR loans as well due to the amount of loans I have, it was the only way to get more ;) DSCR are even easier to get depending on the property and its potential income. Depending on the company some allow in your name, some require a LLC. The rates are also generally higher and the LTV is more dependent on the rental income(or potential).

If you're interested DM me and I can introduce you to some of the lenders I've used in the past.

In general though, don't give up, it might take a little longer to find one that works out, but it's possible! There are also a good number that can do a remote notary, so you don't even have to get notarized at the Embassy or a lawyer.

@Alan Sue I'd love the names of any lenders that do remote notary, please!

Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes

@Elizabeth Rose 99% of lenders use a US mobile notary. The notary has to be approved by title company and the lender. There is no one notary who fits all lenders. To sign overseas MOST lenders require you go to the embassy and use a notary in the embassy, pre-approved by lender and title officer. You need current ID and are fingerprinted. Embassy notaries work on advance appointment only.

Elizabeth Rose

Rental Property Investor · Various states · Member since 2021 · 55 posts · 34 votes

Quote from @Caroline Gerardo:

@Elizabeth Rose 99% of lenders use a US mobile notary. The notary has to be approved by title company and the lender. There is no one notary who fits all lenders. To sign overseas MOST lenders require you go to the embassy and use a notary in the embassy, pre-approved by lender and title officer. You need current ID and are fingerprinted. Embassy notaries work on advance appointment only.

I'm aware of mobile notaries, by "remote notary" I mean "e-notary" - so in other words a lender that will allow me to sign closing documents virtually online vs. having me to go to a consulate in person.

Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes

Around 1% of the total lenders allow e-notary for closing IF you have current US driver's license and passport and the e-notary has fingerprinting capacity which most do not... Lenders worry about fraud, and e-notary more problems arrive.

It is easy to make a mistake with e-notary and delay your closing. Why do you think that is good? @Elizabeth Rose

Alan Sue

Yokohama Shi, Kanagawa-ken · Member since 2016 · 38 posts · 14 votes

I sent a connection request with some of the lenders I've used!

To jump in the current convo, that is one of the first things I ask as I search for Lenders. Having that as one of the upfront questions filters out lenders pretty quickly for myself. While MOST lenders may require a notary at the Embassy, there are several out there that use online notaries.

I just closed on a loan last year using a remote notary(and maybe 4-5 in the past years), and I have never heard of needing fingerprinting capacity, but that may have just been my experiences thus far. I've been able to use my passport, along with sending them a picture of the passport during the 'closing'.

Elizabeth Rose

Rental Property Investor · Various states · Member since 2021 · 55 posts · 34 votes

Thanks @Alan Sue! I'll DM you - looking forward to connecting!