How do you purchase real estate while overseas?

[Elliot Mendoza]

Hello from happy Afghany-land.

So, I've done a good bit of reading over the last month or so since I registered on here. And I'm either showing signs of an infection(I'd blame the amazing food here) or developing that itch to purchase a first investment property.

I came here interested in multi-family properties initially, but seeing some of the lower end scale homes sell for 15-40k and make a really good cash-on-cash return looks more and more appealing as my end goal would be Cashflow.

So back to my subject line; assuming I found a deal, had the cash on hand, how would I go about the purchase? Or is it even possible?

[Brian Burke]

It's tough enough to invest in RE out of state, let alone overseas, unless you make frequent trips to the US.

I live in California, but own property in other states up to a 5 hour plane ride away. I can do it because I have excellent teams in place where I invest, and I GO SEE the properties before buying them.

It may be tempting to buy very low-value properties, but I would suggest that this is more difficult than it may seem. Visiting properties before buying is increasingly important in the low price tier because they are oftentimes located in war zones or are in near tear-down condition.

If you have capital, you might try finding an experienced US-based partner. If you don't have capital (IE you are trying to wholesale, wrap, subject-to, or seller-carry creative financing), you might be better off moving to the area where you want to invest, it would be extremely difficult to do that from overseas profitably.

In my experience, I'd stay away from the low grade houses and focus more closely on Multifamily, particularly larger properties as the price per unit and price to rent ratios are closer to what excites you about the low end homes, but with less risk and greater economy of scale.

[Will Barnard]

How do you purchase real estate while overseas?
Very carefully!!

[Elliot Mendoza]

Thanks, that all makes sense. So, if I were to stick to a market I know fairly well, it would be El Paso, TX (since I am stationed there, just currently deployed till September-ish) and the surrounding area's. Bit of Angie's list searching for home inspectors and contractors, and possibly do-able without being personally present, maybe?

Just got a few days of sitting around before I get pushed out to where I'll be doing my job. Doing a lot of thinking/reading with the extra time.

What also excites me about the lower end homes though is the ability to purchase with cash, with less than a 20% down payment on most of the 4-unit properties I've come across in/around EP.

Came across one quadplex property for 370k, each unit renting at 1200. While I have the money for 20% down, the simplicity of the lower end properties just seem better. Have cash, buy, fix, get pm, rent, collect pay checks. At least on paper, sounds like winning to me.

[Glenn Espinosa]

Elliot Mendoza - Great question and Will Barnard is very right, you have to be very careful.

I'am actually in your exact situation as I too am currently deployed with the military. I've also bought three properties since being deployed, one of which was a multifamily unit that I plan to rehab and rent out. How did I do it? Well I may be a step ahead of you in that I have a ground team that I manage on a daily basis.

I have two realtors that I trust and have done business with in the past. They bring me deals as well as manage the contracts and deal with the sellers and their agents.

I have my Project Manager who I also trust as he has extensive rehab knowledge. He visits every lead that we find and coordinates with our GC's to estimate rehab costs. One of his most important duties is to take dozens of pictures of potential properties and upload them to our company cloud server - soon we will be implementing a video option that will further improve our acquisition process. This allows me to get a first hand look at every subject property so that I can make the final decision in regards to our max allowable offer.

Lastly, I have my Finance Officer who coordinates with my Realtors, accountant, attorney, and title company to close deals and manage the finances that are needed. Luckily, my Finance Officer is my significant other who I trust :) to sign contracts. If there is anything needing my personal signature we will arrange power of attorneys for whatever reason.

The main thing is to have a strong ground unit that can carry the bulk of your due diligence.

Hope this helps!

Glenn

[William Bannister]

I am a bottom feeder myself and in order to stay out of dangerous hood i operate in smaller cities between 100k and 300k population these smaller metro area have less crime ussually and are still large enough to keep your deals somewhat more liquid then say buying a junker house in a town of 5000 people.
The key is buy a home or multi unit in a hood good enough that your know its going to be safe for you to collect rents and ect. It will be less headaches for u and management. The turnovers wont be a nightmare either. I paid 1200 for a house at a tax deed auction and it has an arv of 80k and I will put into it about 10 or 11k. the home will generate 650 to 695 rent per mo, tenant pays all utilities.
The reits are paying 10k to 14k per unit for middle class apts and I want to compete with them. I look at there numbers. If I can press a property into service for under 15k a unit.. and make 650 rent the reits are not much competition to me since my administrative costs are less. I am also able to react faster then they can to market forces being that I am smaller then they are. I can also pay cash on smaller deals like that;) No banker less risk and administration.
Under the 15k I get real interested, especially if the hood is a safe hood and homes are all valued high enough to make loans on them. Meaning this 50k is a starting point for most conventional financing. So make sure you can buy property that will be worth 50k when your done so your strategy will be possible when you decide to sell.
I like 3/1 at least 3 bedrooms and 1 bath for a minimum.. Call em bread and butter properties. Easier to rent too for demographic reasons.
If I am you, knowing what i know from 20+ years of investing I wait to buy until I can see it in person. Just keep piling up cash and when u get back then strike when you can see what your getting.
Otherwise you might be really sorry.
Hey if you are that afraid the US dollar is going to crash or lose value then put 50% of your savings into silver and gold bullion. My thought is the fundamentals of silver have never been better short supply and heavy demands and the Chinese have increased there purchases 500% in the last few years. Indians are also going crazy buying the metals. How can 2.5 billion Asians putting pressure on a commodity not cause it to rise faster then the US dollar. I see silver at 140 and ounce in less then 36 months. That is based on a stable economy is things get choppy with this fiscal cliff well who knows but beyond real estate its about the only place I put my money. this Monetizing of our debt w QE-1 through QE-3 may not cause hyperinflation but mark my word it sure will cause some 70's like inflation at the very least.
Now is a great time to have a pocket little side bet of silver gold bullion to add to your real estate.
Right now as we speak the Germans and Chinese have decided to change there ex currency of settlement from the US dollar to the Yuan? You think maybe they have an idea of whats in store for the US?

[William Bannister]

PS: I forgot to say AIRBORNE! I was Army back in the 90-91 Gulf war and we salute u for serving.

[Elliot Mendoza]

Well, I left my 82nd days a few years ago for EOD, but yea man, desert storm was some ****.

I do have a good chunk in silver and gold, as I've really had nothing for expenses but rent and utilities, I wanted a place to put my cash. Real estate is my next target now.

I appreciate the advice guys. Guess I got more homework to do. No team in place so kinda harder for me initially I guess.

[Andrea M.]

When I was a Realtor I had a client who was stationed overseas and was interested in investing into a property. I set him up on automatic MLS notifications via email based on price area and # of bedrooms he was interested in. He (overseas buyer) had a friend local to the area in which he was interested in who would tour the properties with me and give him (the overseas buyer) a report on the location, condition of the property and what would be needed to bring the property to sale/rent condition. When he was ready to submit an offer, all documents were sent, signed via email and returned via fax, but now can be done via DocuSign. Regarding the actual closing he (overseas buyer) had an extra cost because he (overseasbuyer) had to assign a Power of Attorney to sign on his behalf, but we got it done.

[Andrea M.]

Regarding the rehab/rental phase, your definitely going to need a strong local ground crew during the entire process. They can send your pictures and maybe weekly reports on the progress of the rehab

[Elliot Mendoza]

Thanks Andrea, I guess I'll have to look into it some. I know I have a ton of homework to do, and depending how these next few months are in terms of work load, I might have tons of time to study.

[Marc Ramsay]

Hi Elliot;

I know of a company near me that specializes in helping Canadians buy into the Atlanta SFH market. They assist with entity structures, buying HUD foreclosures, rehabbing, and hooking the client up with a property manager and tenant. Since they are used to dealing with out of country investors they could be a good resource for you if you're interested. I've heard some good things about their operation. Feel free to PM me and I can pass along a referral if you're interested.

Cheers,

Marc

[Robert Adams]

It varies per market but here in Vegas you would need to get someone a POA. The POA would need to have the specific address listed in the POA.

You also need a good agent that knows what you are looking for that can do the local leg work for you. That agent should have good communication skills and be willing to preview these homes for you. As well as take extra photos for you etc so you can get a good feel for the property from abroad.

If you are interested in the Las Vegas market please let me know as I would be happy to help.

[Elliot Mendoza]

I appreciate it guys, I'm going to wait a few months to do some more homework and stack on some more cash as I just made a substantial purchase into silver the last few weeks. (At least, substantial to me).

I'll add you both as contacts and pending my communication ability in a few months, I'll start putting out feelers.

[Tim S.]

Elliot

I am overseas and buy RE from here. As to the "how" -- you need people in your target area who are aware of your situation and willing to accommodate never being there in person. For me, this has meant a realtor and mortgage broker. Yes, I may pay more to use the broker, but they streamline the coordination. It's the price I pay to do this all remotely. I use my brother as my eyes and ears; we partner up in the sense that I am the financial backing and he does some of the legwork. He does not sign anything and I don't bother trying to use a power of attorney due to the hit and miss results in terms of who will recognize and accept it.

The only time you need to return original, signed docs is for the closing. I print the closing package then use the notary service at a US Embassy / Consulate or if you're associated with the military in any way they will have somebody who is a notary which is also acceptable. I then FedEx the paperwork back to the US for the seller to sign.

I have never sold RE from overseas.

Tim

[Elliot Mendoza]

Tim, I really appreciate the info. I'll have to look into this. Not sure where I'd find a notary where I'm at but it's something to go by.