International Investor Success Stories

55 Replies

Hi, I would like to hear from Non US Citizens investing in the US on how they are going with their investment strategy, what strategies they find are most successful for them with being a remote investor and the hurdles they have had to overcome to achieve success?

Thank you

Hi Simon,

Not as yet! I have reached out and made some connections with a couple of other Aust investors just starting out. I am already investing, but looking to network with others to review what works for them or not.

Regards

Dave

ok. Have sort of been putting off answering this, as I have found it a mixed bag, but as no one else has commented....!

I am from Australia and first invested in a couple of 'turn key' properties in the U.S after attending a 'boot camp' over here. Everything that could go wrong did, and I basically lost all my money over a period of about 2 years. Could blame a lack of 'due diligence', but I really didn't know what I should have been diligent about, or how to go about it.

As they say however, you learn from your mistakes, and I thus learnt a hell of a lot!

Despite this experience, I could still see there was money to be made over there, but it requires a much more 'hands on' approach. Having no money left, I started playing around with tax liens (can be had for only a few hundred dollars, but you only get the interest), and tax deeds (where you actually get the property). Got a few blocks of land which have appreciated nicely, but found houses were too expensive for me in the markets I was looking in, and often required a lot of work.

Kept researching markets and persevering ( again learning a lot from my mistakes along the way!), and about a year ago, got my first house which I 'flipped' in 3 days for a 6k profit (paid 14k for the house, which needed a lot of work). Am on my next deal now, which I got under contract for $43k. Needs 20-30k for a full rehab, has an ARV of apx $110+k.

I am planning on organising the rehab on this myself, but I have made several trips to the area already, met and talked to people locally, and started building a network of contacts.

This project has taken a long while to get going, as I had to get finance for it (I think I mentioned I had very little money!), which is EXTREMELY difficult if you are not a U.s citizen. 'Find the deal and the money finds you' does not apply to non-citizens!

Generally:

The banking system is really hard to negotiate for non citizens- you are a 'foreign alien' and treated as such. Strong reliance on paper cheques, notary signatures and the time the post takes between countries complicates matters to a surprisingly high degree.

You will have to travel over there a LOT, particularly in the beginning. No amount of Google earth or internet searches replaces actually seeing and getting a feel for neighbourhoods / properties / areas in reality. Areas you thought would be great can turn out to be duds and vice versa. You can't trust other people for this - where you finally choose has to suit what YOU are looking for and you have to be comfortable with it.

Once you have settled on an area, you will need to make MORE trips to develop personal relationships with locals.

If you do all this, you will find people who are really helpful, and keen to see you succeed (and hear your funny accent!). My loan has come through the help of people I have met over there, as have many other recommendations / suggestions. This has given me the confidence to attempt my first 'remote rehab', although it will still probaby need another trip soon.

If finance was not a problem you could probably do this much quicker than I have (I had to save up between trips!), but you might also be more prone to not finding out everything yourself from the ground up. There is a hell of a lot to learn, as there is really no point of similarity between the way the u.s. And Australian real estate markets operate.

Don't know if this was the sort of info you were looking for, but hope it helps!

@Deborah Tuck

Sounds like you did a ton of due diligence. Nothing quite replaces being able to look around a neighborhood to really get a feel for things.

@David Gregory

I don't qualify for this post because I am a US Citizen. But I did invest while living in Korea, in a state I'd never visited before, with investors that I met online. So in that respect, I share a lot in common with foreign investors.

I didn't know about the area I was investing, I didn't have the ability to easily visit, and I had to rely a lot on internet resources to figure things out.

The degree of difficulty and risk go up as you try to do what I've done - and I suppose if you're a foreigner there might be a few more hurdles to overcome in terns of figuring taxes and withholding - but I did a lot of macro-level due diligence beforehand to pick an area that I thought had good potential to grow in the next few years. I wrote a post about the process I went through. Warning - it's +3,000 words long ^^

https://www.biggerpockets.com/blogs/6526/blog_post...

I also help organize a meetup out here in Korea. The website is in my signature.

We help bring together investors who are looking to invest overseas and give them a chance to network with other investors. Our members are pretty evenly mixed between US Citizens and non-US Citizens. One of our lead organizers is from the UK.

The area we invested in - my partners and I - has been doing well. Our investment on paper is probably worth about 50-80% more than what we paid for it at this point. Even though I was looking for cashflow, the property has been appreciated a lot more quickly than we anticipated and right now we're actually looking to find another market because the deals are harder to come by.

The Problems I've Encountered:

* At the purchase, we knew there would be some Cap Ex costs that we needed to do: Roof and pipe repairs. We thought we'd have to time to make those repairs and we'd pay for them through rent collected. Turns out we had to do those repairs sooner than later. So while we were anticipating additional capital outlays and we had enough to cover them, we had hoped to pay for them later.

* Pipes under the house leading to the street burst. This was an unexpected $1,700 repair. The city covered half the costs and after talking to a few GCs, it's not a repair that you can necessarily check for ahead of time, but something you might want to just have on your Cap Ex expenses long term.

* We ended up replacing windows which we hadn't anticipated.

* We did some interior work - tiles and cabinet - to make it more presentable. 

* We switched Property Management Companies - Normally, this wouldn't be that big a deal. But the previous PM had already placed a tenant (we inherited the tenant). So when it came time for her to move out, there was some damage that the previous PM had not documented well, so we weren't able to charge the tenant and this ended up costing us a few hundred dollars.

* Things will often take longer than you anticipate. For our windows, we were delayed because the ones we wanted (that matched the existing ones) were not readily available. 

Right now, we're getting the place ready to rent out and looking at between $900 - $1,000 in rent. We know a place nearby that's not in as good of an area rented out for $975, so we're optimistic.

The market we chose was voted as one of the top 25 hottest markets in Florida. So we think there's still room for the price to run even more.

My advice to any international investors - 

1. Start macro.. Really look at employment and population trends. 

2. Then start to narrow down your search grid. 

3. After that, look micro and get as much info as you can about the place. 

4. Read the City Minutes to find out about the community. 

5. Read CAFR report (mentioned in the blog post). 

6. Read local area newspaper reports. 

7. Find out the names of all the subdivisions. 

8. Use Zillow not to tell you the absolute price for the areas - but instead to give you a sense of 'trends' in the area. Where are the expensive houses? What neighborhoods are nearby? How much do they cost?

9. Create a Google Map of the area and pin things so you have a sense of where everything is

10. Then.. after you have a few candidates areas in mind, contact PMs. Ask about the area and tell them what you see. Ask for their opinion.

11. Contact investors on BiggerPockets in the area - ask them their opinion. (You might try contacting investors first.. but you never know if they are giving you 'the whole story.' Better to have a sense of an area first and then ask specific questions. - For example: ..I noticed that there were a lot variance in price along Smith Ave. What do you know about that street? - plus as someone who's helps other investors regularly, I'm always more eager to help those who have already done some legwork.)

12. Contact realtors

13. Continue to network with the investors you meet on BP. Try to arrange a Skype call. Send them research on the area. This is part of the 'feeling' out process to see if they're interested in partnering and if they might make a good candidate. Both parties can kind of 'test' the water with each other.

14. Always be aware of what value you bring to the table. Of course, money is one thing. But you can bring other value as well - ability to research well. Ability to organize projects. Ability to take notes and send them to everyone. The more 'value' you can add to a deal, the better your terms with the other investor and more likely you will be to find someone willing to partner.

15. Look for ways to align incentives. If they're bringing money to the deal, that's one way. Other things to look for: Do they have online credibility? What types of accountability do they have? What recourse do you have if things go sour? What referrals or credibility do they have?

16. Multiple exit strategies. The more ways you can monetize, this investment the better. The ROI is one way. How about blogging about your experience? How about starting an investment club?

17. Network with other international investors. If you don't know any successful international investors, I'd say that's the first thing to do - find a few. Everyone will give you advice - I know I got a lot. But unless they've actually done it, the value of the advice is often dubious. On the other hand, if you connect with successful overseas investors and spend time with them and surround yourself with as many of them as you can, you'll find your odds for succeeding will go up greatly.

Alright.. I hope this post is helpful. Feel free to reach out anytime.

@Deborah Tuck

@Daniel Ryu

Thank you both for your input.  I am Canadian and expanding our real estate investing into the US.  We are hitting financing hurdles but we are lucky because we know the area we are investing in very well.

I've connected with some very informative and helpful people here on BP.  It has already been a very valuable resource. 

It's nice to be able to get feedback and advice from like minded investors.

Thank you @Deborah Tuck. This is highly enlightening and just the kind of information on other Australian's experience I have been searching for. I really admire your tenacity in learning the lessons from your first experience and trying again. I might not have had the same courage in your situation.

These are all very interesting posts.

I have many clients overseas, from Malta to Europe, all over Canada, US. I think the more successful use "Buy and Hold" as a business model. It is difficult to "Buy and Sell" from overseas, as a Newbie.

With reality TV shows, and Guru's who promise the moon, it is important to manage expectations. There is no question we make serious money together, but it takes time, patience, and solid business strategy.

My most recent client is from FIGI Islands. He buys and holds, and dedicates a portion of his annual rental profit to orphanages worldwide. He just bought three properties in Florida with me. We actually partnered on one. He just received an envelope with his first checks.

I really liked @Daniel Ryu post. I would suggest you remember that you are seeking the lowest price for a valuable property, not "Highest and "Best", and you may be better served by someone who looks to your own interests than the interests of the Seller, in investment transactions. His suggestion of multiple exit strategies is good, but with rising values in Florida, I usually suggest Buy and Hold is an excellent strategy. My buyers from two and three years ago are wealthy investors now.

Perhaps, most important is "Do something!". Don't just read these posts. If you don't make at least one offer a month, what are you doing? I usually buy 2-4 properties each month. Guess how many offers I make?

Warm regards from Sunny Florida

@David Gregory

We are only working with overseas clients (predominantly investors from Hong Kong, Mainland China, Taiwan and Singapore) so I could you give a perspective on what type of experience these international buyers of US real estate have had/are looking for.

Success factors:

- The US is a large country and most international buyers only have been to a few cities such as NYC, SF, LA,... if at all.  Some believe that they should only invest in what they know and as a result, we see many of them continue to flock to these large metropolitan cities. In almost all cases, these international buyers focus on long-term capital gain.  In the words of one overseas investor, they are looking for "an anchor place" to put their money. For these investors, success is achieved when they buy a house in a prime location in a top tier city in the US.

- Over the last few years, we see more and more international buyers looking for second-tier and third tier cities in the US. Not only do they focus on capital growth but they are keen on cash flow as well. 

My personal advice around identifying an investment location in the US is to write down on paper what return you are looking for in the short term (annual cash flow) and in the long term (appreciation), the risk you are willing to take to get these returns, and your budget. Once you have written down those numbers (in essence your "investment goal"), you can be much more focused, and, I believe, more successful.

Challenges:

- Financing for overseas investors who are looking to buy US real estate is a challenge, but a few US banks have been opening up their financing to foreigners (albeit of course with some requirements). There is a significant amount of paperwork to be submitted but besides that, foreigners can now get financing for certain types of US real estate investments.

- The tax filing requirements for non US residents is cumbersome but once the overseas investors understand the obligations, they realize that, compared to other countries, the US market would still be an interesting location for investment.  For example, during a seminar organized by American Chamber of Commerce and Canadian Chamber of Commerce in Hong Kong two weeks, we put together 4 guest speakers to talk about overseas real estate investing. We compared investing in the US real estate market with investing in Canada, UK and Australia.  Many Hong Kong investors approached our US team after the seminar because the US returns (including the issues with US tax) were still attractive compared to other countries.

- Time difference is and will remain a challenge. Overseas investors (especially the ones in Asia) are facing more than 12h time difference with the US. This is a bit of a problem as the properties are located in the US, the acquisitions and closings occur in the US, the property management is done in the US, etc. This means that overseas investors need to find local teams that they can trust during every step of the acquisition and management of the property. Making trips to the US to meet with local teams is expensive and time consuming and in most cases, overseas investors won't do it (just think about the impact on your ROI by traveling to the US for just a week). Based on feedback we have received from overseas investors, most sales people coming to Asia to sell new developments in the US only know the building they are selling and the positive factors in the neighbourhood. Clearly, they are not incentivized to give you a true picture of the area or the long term factors that an overseas investor needs to consider.

- Time requirement to make a US investment is another factor to consider. Clearly the more research the overseas investor is doing, the better off he/she will be. However, there is a balance between the time it takes you to do research and complete a transaction, versus the return an investor can make on a property investment. In essence, every day you put into research is an investment cost that lowers your ROI (relatively to a property investment in your local neighbourhood in the country you are currently living in - which you probably know well)

These are just the main factors that we continue to hear from overseas investors but hopefully helpful to you. Good luck

Originally posted by @John Turner :

@Deborah Tuck

@Daniel Ryu

Thank you both for your input.  I am Canadian and expanding our real estate investing into the US.  We are hitting financing hurdles but we are lucky because we know the area we are investing in very well.

I've connected with some very informative and helpful people here on BP.  It has already been a very valuable resource. 

It's nice to be able to get feedback and advice from like minded investors.

The group I help organize is focused on International investors and lot of us are buying in the US market. If you're interested in learning more, check out my signature. It's free to join and we have a closed FB group to help our members talk and ask questions. 

Best of luck!

Originally posted by @Joseph Ball :

These are all very interesting posts.

I have many clients overseas, from Malta to Europe, all over Canada, US. I think the more successful use "Buy and Hold" as a business model. It is difficult to "Buy and Sell" from overseas, as a Newbie.

With reality TV shows, and Guru's who promise the moon, it is important to manage expectations. There is no question we make serious money together, but it takes time, patience, and solid business strategy.

My most recent client is from FIGI Islands. He buys and holds, and dedicates a portion of his annual rental profit to orphanages worldwide. He just bought three properties in Florida with me. We actually partnered on one. He just received an envelope with his first checks.

I really liked @Daniel Ryu post. I would suggest you remember that you are seeking the lowest price for a valuable property, not "Highest and "Best", and you may be better served by someone who looks to your own interests than the interests of the Seller, in investment transactions. His suggestion of multiple exit strategies is good, but with rising values in Florida, I usually suggest Buy and Hold is an excellent strategy. My buyers from two and three years ago are wealthy investors now.

Perhaps, most important is "Do something!". Don't just read these posts. If you don't make at least one offer a month, what are you doing? I usually buy 2-4 properties each month. Guess how many offers I make?

Warm regards from Sunny Florida

I was worried that the property prices rising in FL (in our area) might be part of a bubble, but I think our area has enough fundamentals to keep going up. 

We actually had a good discussion in our FB group about 'when to sell' - some of the metrics I was looking at:

* Purchase price to median income (when it gets to 3x)

* Rent to Current value ratio (when it drops below .5%, might be able to find a better use of money in another area). 

For now, we're looking at longer hold - maybe up to 5 years (or when some of those metrics are hit).

Overall - a good problem to have ^^ When to lock in your 'earnings' 

Great thread! Thanks @Deborah Tuck , @Daniel Ryu , @Joseph Ball and @Sam Van Horebeek for the info.

I'm an Aussie (non-Citizen) living in California on a work visa and as such I essentially fall into the same pool as a citizen with regards to financing, legal and tax. So to date I've had no problem getting conventional loans for buy and hold investments, although this would certainly change if I were to move back to Oz and relinquish my residency in the US.

For anyone looking to invest in the US, I would echo the comments above about knowing and visiting the market you intend to invest. This coupled with strong property management will be the key to success over the long term.

Originally posted by @Daniel Ryu :
Originally posted by @John Turner:

@Deborah Tuck

@Daniel Ryu

Thank you both for your input.  I am Canadian and expanding our real estate investing into the US.  We are hitting financing hurdles but we are lucky because we know the area we are investing in very well.

I've connected with some very informative and helpful people here on BP.  It has already been a very valuable resource. 

It's nice to be able to get feedback and advice from like minded investors.

The group I help organize is focused on International investors and lot of us are buying in the US market. If you're interested in learning more, check out my signature. It's free to join and we have a closed FB group to help our members talk and ask questions. 

Best of luck!

 Done. Thanks. Always looking to learn.

Originally posted by @John Turner :
Originally posted by @Daniel Ryu:
Originally posted by @John Turner:

@Deborah Tuck

@Daniel Ryu

Thank you both for your input.  I am Canadian and expanding our real estate investing into the US.  We are hitting financing hurdles but we are lucky because we know the area we are investing in very well.

I've connected with some very informative and helpful people here on BP.  It has already been a very valuable resource. 

It's nice to be able to get feedback and advice from like minded investors.

The group I help organize is focused on International investors and lot of us are buying in the US market. If you're interested in learning more, check out my signature. It's free to join and we have a closed FB group to help our members talk and ask questions. 

Best of luck!

 Done. Thanks. Always looking to learn.

Welcome aboard!

There's a spreadsheet on how to do a quick analysis of properties in our shared files, in case you don't have anything. 

And there's also a replay of our last meetup if you want to check out some of the things we covered for our members, as well as some info on our next meetup.

We'll broadcast that one live as well so even if you're outside of Korea you can watch it or catch the replay later which we'll post in our FB Group.

Feel free to reach out or ask a question any time!  

Originally posted by @David Gregory :

Hi Simon,

Not as yet! I have reached out and made some connections with a couple of other Aust investors just starting out. I am already investing, but looking to network with others to review what works for them or not.

Regards

Dave

Good work on the 'Already Investing' David. We're still in the 'Research' phase of it all and getting closer every day. 

What strategies are you using? Flip/BuyNHold/FixNFlip? 

Also, the rest of you have come in with some amazing advice! No matter how many people i've talked to (it's a lot), there's always something new to take away. 

So thank you all for sharing your experiences with us as I know it takes more than a few minutes to write some of these posts!

Hi Simon,

I currently own a Note which is doing fine and have invested in providing funding for another investor for renovation, which is turning out to be a negative experience, as it is 3 months overdue for payment and commencing legal action. Watch this space!

@Daniel Ryu , @David Gregory , @Simon Baker , @Deborah Tuck , @Helen Rolls , @Aaron Mercer

Great thread for those of us in the international space looking to network and share experiences.

Just a bit about myself - I'm an American (married to an Australian) now spending most of my days here in Oz and still investing in different cities in the U.S. with various ground partners, including with other Aussies, in a wide variety of types of real estate investing such as notes, buy and holds, flips, and new developments to name a few.

As previously mentioned in the thread, there are quite of few people offering real estate investments, many of which are extremely visible and active online. With that said, due diligence, both quantitative and qualitative analysis at the micro and macro level is key to ensure the investment matches your specific goals. Part of the due diligence process for me is to go thru all the possible scenarios of things that could go wrong and see how you would address those issues.

What if you have to evict a tenant?

What if you have to replace your property manager?

What if something happens to your partner?

How do you hold contractors, agents, etc. accountable?

What if a performing note stops performing?

If you are able to address all the issues, and the investment still makes sense and meets your goals, then continue on the due diligence process. I can’t stress the importance of due diligence, even more so when investing remotely, as in the majority of real estate investments, the profit is actually made on the front end when you acquire the asset, as opposed to the disposition. 

Knowing what questions to ask is essential, looking beyond the numbers. 

What are the key metrics/numbers?

How were the numbers calculated?

What assumptions were made?

And so on....

The U.S. is quite a different place than Australia in so many ways. For instance, the U.S. has 50 states each their own state laws, as well as local/city jurisdictions.

As Daniel Ryu mentioned, by finding the right network, it is possible to invest remotely and still complete the due diligence process thru trusted relationships. As I get on in my years, I find myself more focused on building scalable systems and processes to streamline my investing business. In my younger days I was more hands on which helped me learn. I will say the decision to be hands on and be physically present at your investment properties would be a personal choice based on your own comfort level and goals.

Another key point is to manage the relationships you’ve established in your investments by communicating frequently. If if you’ve subscribed to a turn-key solution, there is still the need to communicate and hold your managers accountable by remaining engaged.

I’d be curious to gage the interest in U.S. real estate here in Oz as I am considering starting a group similar to what Daniel Ryu has done in Korea to build a forum for sharing information and experiences.

For those in Oz, I spend most of my days in NSW and ACT and am always up to talk real estate investing to share the successes and mistakes over a coffee or beer.

Cheers,

Dash 

Originally posted by @Dash Siva :

@Daniel Ryu, @David Gregory , @Simon Baker , @Deborah Tuck , @Helen Rolls , @Aaron Mercer

Great thread for those of us in the international space looking to network and share experiences.

Just a bit about myself - I'm an American (married to an Australian) now spending most of my days here in Oz and still investing in different cities in the U.S. with various ground partners, including with other Aussies, in a wide variety of types of real estate investing such as notes, buy and holds, flips, and new developments to name a few.

As previously mentioned in the thread, there are quite of few people offering real estate investments, many of which are extremely visible and active online. With that said, due diligence, both quantitative and qualitative analysis at the micro and macro level is key to ensure the investment matches your specific goals. Part of the due diligence process for me is to go thru all the possible scenarios of things that could go wrong and see how you would address those issues.

What if you have to evict a tenant?

What if you have to replace your property manager?

What if something happens to your partner?

How do you hold contractors, agents, etc. accountable?

What if a performing note stops performing?

If you are able to address all the issues, and the investment still makes sense and meets your goals, then continue on the due diligence process. I can’t stress the importance of due diligence, even more so when investing remotely, as in the majority of real estate investments, the profit is actually made on the front end when you acquire the asset, as opposed to the disposition. 

Knowing what questions to ask is essential, looking beyond the numbers. 

What are the key metrics/numbers?

How were the numbers calculated?

What assumptions were made?

And so on....

The U.S. is quite a different place than Australia in so many ways. For instance, the U.S. has 50 states each their own state laws, as well as local/city jurisdictions.

As Daniel Ryu mentioned, by finding the right network, it is possible to invest remotely and still complete the due diligence process thru trusted relationships. As I get on in my years, I find myself more focused on building scalable systems and processes to streamline my investing business. In my younger days I was more hands on which helped me learn. I will say the decision to be hands on and be physically present at your investment properties would be a personal choice based on your own comfort level and goals.

Another key point is to manage the relationships you’ve established in your investments by communicating frequently. If if you’ve subscribed to a turn-key solution, there is still the need to communicate and hold your managers accountable by remaining engaged.

I’d be curious to gage the interest in U.S. real estate here in Oz as I am considering starting a group similar to what Daniel Ryu has done in Korea to build a forum for sharing information and experiences.

For those in Oz, I spend most of my days in NSW and ACT and am always up to talk real estate investing to share the successes and mistakes over a coffee or beer.

Cheers,

Dash 

Best of luck in starting your group. I'm sure it will be a great resource for investors.

Feel free to reach out anytime to discuss organizing meetups or investing.

By the way, I did an interview with a Nicky Roche. She has a podcast - "Small Business Drivers." She's in the property management business in Australia and I think she might also be interested in joining a group that helps investors invest overseas.

http://smallbusinessdrivers.com/36-dan-ryu-on-netw...