Lender · Houston · Member since 2019 · 74 posts · 29 votes
Hello,
My sister is US citizen who has been living overseas most of her life and I am helping her get into real estate.
Since she has lived overseas, she has not been able to build credit. She did get a secured credit card about 3 months ago. When talking to a lender, he recommended two things:
1) Apply for a loan with her secondary passport as a non resident so she would get good rates. According to lender, it is a much simpler process.
2) Apply for a loan as a us resident. Since not much credit history, she would get a smaller loan and higher rates.
Would appreciate some tips and opinions about what best option is. I am against option 1, since lender is trying to find his best interest. Plus the downside to investing as a foreign is taxations.
Rental Property Investor · Hong Kong, Hong Kong Island · Member since 2014 · 188 posts · 114 votes
4y
The situation for international investor is similar as for US resident for ECI (Effectively Connected Income, eg buying and operating real estate directly) when it comes to US taxes but it depends on country of residence to determine if local tax.
For FDAP (Fixed Determined Payments, eg dividends from investing as limited partner, receiving dividends from REIT...) US taxation will depend on tax treaty with country of residence.
So we can't answer more precisely without knowing country of tax residence and investment types considered.