Lending for foreign investors

14 Replies

Hello,

I'd like to receive help to understand which are my options in order to get a mortgage, since I am not US resident.

Let's say that my target is to buy properties in Indiana and the value should be around 300,000$

I have understood I cannot access to bank mortgages programs. So which are my options? Is it better to go as private investor or to open a LLC?

Thank you in advance 

@Sandro Sossi my past experience with foreign nationals getting US traditional funding has been that it is hard to do so. Even with a LLC, the banks [usually] want a US citizen to personally sign until the LLC is seasoned and has enough of it's own credit to stand alone.

I've seen some lenders that claim to offer loans to foreign nationals [I think I already sent you that flyer to you] but their rates are at or over Hard Money fees and don't work for cash flow or long term projects.

I've worked with several small [and large] foreign groups that create their own fund or REIT to then invest as a group into our Indianapolis market.

Also, don't forget that your $300k that you mentioned will buy 4 or 5 good SFH rentals here and not just 1.

Originally posted by @Sandro Sossi:

Hello,

I'd like to receive help to understand which are my options in order to get a mortgage, since I am not US resident.

Let's say that my target is to buy properties in Indiana and the value should be around 300,000$

I have understood I cannot access to bank mortgages programs. So which are my options? Is it better to go as private investor or to open a LLC?

Thank you in advance 

Hi Sandro,

It is almost impossible to get a traditional loan from any bank.

There are many smaller financial institutions that offer lending products for foreign investors with quite decent rates.

As @Shawn Holsapple mentioned $300,000 can go a long way here on the Midwest.

I believe a net rate of return of between 15%-20% can be generated quite comfortably.

Grazie for reading and have a great day.

Originally posted by @Sandro Sossi:

Thank you for the feedback @Shawn Holsapple and @Engelo Rumora 

Does anything change if you buy the property cash and then with tennants paying ask for refinincing?

Thanks!

Pleasure Sandro,

If you establish a relationship with a local bank you eventually might be able to get an unsecured credit card which over time might lead to a potential mortgage.

Thanks and have a great day.

Originally posted by @Sandro Sossi:

Thank you for the feedback @Shawn Holsapple and @Engelo Rumora  

Does anything change if you buy the property cash and then with tennants paying ask for refinincing?

Thanks!

 Sandro

It does change in some cities. For example Buffalo you can pay cash rehab and tenant the property and a local bank can refinance the property. Obviously you have to know which bank because not all bank will do it for a foreign owner. These particular banks that refinance will only look at the asset and not the status of owner. They will use a trusted appraiser to evaluate the property and offer you terms. 

Chances are in other cities/states as long as the bank is local they may lend based on asset and neighborhood. 

Hope this helps

There are programs available to foreign investors the primary requirements are 35 to 50% down and an LLC, which can be setup in a few days.

Originally posted by @Aaron P.:

There are programs available to foreign investors the primary requirements are 35 to 50% down and an LLC, which can be setup in a few days.

 Hello Aaron,

I am interested in the program you did mention as I am looking for financing whilst being an foreign investor. Thx, Andreas

You need an ITIN and need to file taxes in the U.S. for most bank alternate loans. That means your first rental will have to be cash or private money.

I'm a Canadian resident investing in the US. My company is based in Chicago. Getting traditional bank financing from a US bank depends on a lot of factors including location, size of the loan, commercial versus residential, portfolio, experience, etc.

Generally it is very difficult. But there are a few options.

1) Find a local partner and have them be the principal signor and guarantor on the loan. I do this right now in 6 different cities across the US.
2) If you're Canadian, a few of the Canadian banks have programs for US investment through their US subsidiaries. But there are restrictions.
3) There are a few lenders that will lend internationally, but these are usually short term loans for bridge financing and construction.

Give me some additional details, and I can make some suggestions.

Victor Menasce
Author of "The Great Canadian TakeOver"
President of Ottawa Real Estate Investors Organization.

Originally posted by @Sandro Sossi:

Thank you for the feedback @Shawn Holsapple and @Engelo Rumora  

Does anything change if you buy the property cash and then with tennants paying ask for refinincing?

Thanks!

 That is maybe an idea, but seems to be difficult to handle for me if I am not in the US

Originally posted by @Keith Anderson:

You need an ITIN and need to file taxes in the U.S. for most bank alternate loans. That means your first rental will have to be cash or private money.

 Hello Keith,

thanks for your input. That is maybe the best way to start. I buy a cash flow RE with cash, do all the admin stuff that is required, e.g. file tax etc, and in parallel try to find a local partner.

Andreas

Originally posted by @Sandro Sossi:

Hello,

I'd like to receive help to understand which are my options in order to get a mortgage, since I am not US resident.

Let's say that my target is to buy properties in Indiana and the value should be around 300,000$

I have understood I cannot access to bank mortgages programs. So which are my options? Is it better to go as private investor or to open a LLC?

Thank you in advance 

 Hello Sandro,

maybe we join forces as it seem we share the same challenge. From what I see and I have to agree with most of the replies, that it is very difficult to get a normal bank loan. Maybe a good way to start is to find a local partner who will prime.

Andreas

Originally posted by @Aaron P.:

There are programs available to foreign investors the primary requirements are 35 to 50% down and an LLC, which can be setup in a few days.

 Hello Aaron,

would you pls share some add details about those programs? I want to investigate it.

Thx, Andreas

@Victor Menasce Hi. Your point 1 is interesting. My mother is French, living in France, with funds in France. I am a US resident and own 1 multi-family already. I'd like my mother to buy a property in the US with a conventional loan I am ready to guarantee. I will renovate and manage the property for her and send her the net cash to France. Any bank financing issue here? Any tax implications sending money abroad?

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