Hi. I’m a real estate investor from Norway, looking to set my foot in to US market. Anyone from international investors can share their experience? I have questions:

How do i buy house without social number?

I read that it’s possible for foreigners to get ITIN number.

Is there any tax on funds you transferring to US from Europe?

Is it difficult to open bank account?

@Paul Jovaisa

You need to apply for an ITIN if you are a foreigner without a social security number.

The US will not tax you on funds you bring into the country.

There are some things to be knowledgeable about when investing in the US

FIRPTA - Foreign Investment Real Property Tax Act. You basically pay a tax on gross receipts when you sell the property. This forces you to file a US tax return to potentially get a refund.

ECI(Effectively connected income) and FDAP(Fixed Determinable Annual Periodic) - basically these are the two options your rental income will be classified as.

You also want to research if there is a US tax treaty with your home country. This will dictate how your income will be taxed.

You may be required to file an annual tax return with the US Federal government and the state where the property is located in.

Good luck with investing in the US!

@Paul Jovaisa

Hi Paul,

I am also a foreign investor from Europe feel free to contact me in private :)

Good luck bro!

Originally posted by @Paul Jovaisa :

Hi. I’m a real estate investor from Norway, looking to set my foot in to US market. Anyone from international investors can share their experience? I have questions:

How do i buy house without social number?

I read that it’s possible for foreigners to get ITIN number.

Is there any tax on funds you transferring to US from Europe?

Is it difficult to open bank account?

Hi Paul, 

It's all possible! Check out Transferwise borderless account which can be opened from outside the US.
 

Many international investors underestimate (or don't even take into consideration) the elevated compliance costs associated with doing business across borders.

You may want to determine what those professional fees may be, both for a US legal and tax professionals and professionals in your country of residence, and make sure your ROI model can absorb them before you proceed.

Sometimes it's better to invest in your home country if you don't have the economies of scale to absorb all costs.

This is the number one mistake I see international investors making when venturing into US real estate and businesses.  The fees will eat you alive if you don't have scale.  And if you don't have competent advice, the penalties and interest from the IRS will be worse.  Many foreign investors find this out too late.

If you're going to invest directly in real estate (not in a syndication), I wouldn't recommend investing in the US unless you're going to move in at least 250k USD of capital, 500k would be better.  Just my opinion, for what it's worth.

Best of luck.

@Basit Siddiqi

Thank you so much. Really useful information here.

Would appreciate if you have time to answer one more question. Can foreigner use 1031 exchange?

@Shay Yehuda

Hi thank you, i will do that.

@Paul Jovaisa

Yes foreigners can use the 1031 however they’ve recently changed the rules.

You need to do a simultaneous exchange if you want to avoid FIRPTA.

If doing the regular or reverse 1031, you will still need to deal with FIRPTA.

@Paul Jovaisa

We work with foreign investors and there are a couple banks that my partners use when investing and when borrowing money against their properties (DM me with more questions). Have you narrowed down any areas in the US that you are interested in investing in? Do you want to purchase a single family home or multifamily?

@Nat C.

Thanks I’ll try to look in to it.

@Charles Carillo

My business partner living in South NJ, so we looking around that area. Want to start with single house maybe duplex fixer upper. Not having expectations to refinance it as it’s gonna be my first project in US, don’t think banks would work with me. But if everything goes the way it should, will do more deals. Specially now with COVID-19 US being hit so hard i would expect price correction.

@Account Closed

Yes if you can buy it for 2017 prices. Have few apartments in Poland neighbor country Lithuania. Bought it in 2015, average ROI on my investments 15%. But to compare with if I bought those in 2020 ROI would be around 5%.

@Account Closed

Difficult to say, but if you think about price differences in Western Europe capitals and Eastern Europe capitals it’s a big gap. I think at some time in the future those differences will equalize, specially with Eastern economies growing at much faster rate. Wages going up. But then again if it comes another economic crash... For me to really just on appreciation it’s a bit of gamble, I’m more of cashflow investor.

Originally posted by @Paul Jovaisa :

@Walter H.

Yes if you can buy it for 2017 prices. Have few apartments in Poland neighbor country Lithuania. Bought it in 2015, average ROI on my investments 15%. But to compare with if I bought those in 2020 ROI would be around 5%.

Very interesting. I did look at Lithuania and Latvia myself. Prices went up a lot, but I dont really understand the drivers for the price appreciation in those countries, specially in Latvia. Lithuania seems more dynamic, in my opinion. Did you buy with cash in Lithuania?

How are prices in Norway right now? Could you recommend a good real estate website to have a look at properties in Norway? 

Www.finn.no is the place to go. 

Opening a US bank account isn't easy, but possible for foreigners.  You will need to be there in most cases, and even then, make sure you know the bank policy and be able to show it to the clerks there.

You can PM me and I will share my experience. 

@Juan Pardo

I think main driver for price appreciation is economic growth. A lot of companies moving to Baltic states, salaries is rising. Affordability for real estate is at record highs. Also people moving from country side to bigger cities. Emigrants coming back from west.

After 2007 crash people was scared to invest in real estate. When I started buying properties around 2015 people was thinking I’m delusional with my goals. Now very same people starting to buy.

One property I bought with mortgage others cash. Sold last year two apartments which I bought in 2016. I paid for them around 100k in 3 years with cashflow including i doubled my money.

Norway has quite high prices and ROI is around 5% for cash purchase. But Norwegian krone is at record lows,47% down since 2013 against dollar. Good time to buy if you have dollars or euros. As some one mentioned before check out FINN.no this is only website for real estate.

Originally posted by @Paul Jovaisa :

@Juan Pardo

I think main driver for price appreciation is economic growth. A lot of companies moving to Baltic states, salaries is rising. Affordability for real estate is at record highs. Also people moving from country side to bigger cities. Emigrants coming back from west.

After 2007 crash people was scared to invest in real estate. When I started buying properties around 2015 people was thinking I’m delusional with my goals. Now very same people starting to buy.

One property I bought with mortgage others cash. Sold last year two apartments which I bought in 2016. I paid for them around 100k in 3 years with cashflow including i doubled my money.

Norway has quite high prices and ROI is around 5% for cash purchase. But Norwegian krone is at record lows,47% down since 2013 against dollar. Good time to buy if you have dollars or euros. As some one mentioned before check out FINN.no this is only website for real estate.

You bought at the perfect time in Lithuania! Really good move!

Which are the main real estate websites for Norway? How much would be an 80 sq mt apartment in Oslo, Toyen?

I have been to Oslo, Bergen, The Lofoten... absolutely loved the country. So beautiful!