So I sold a property to some Australians....
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
And the profit margin was acceptable and I have to say these guys were an absolute pleasure to deal with. I want to sell them more and have to find ways for these folks to get financed on small investment properties - like 15-20k US a pop for purchase. I'm not even sure where to begin to look for something like this. Any suggestions from anyone else from over the pond who's managed to do this?
Hey, here is how we got several out of the country investors funded.
1) We contacted a "local" portfolio lender. (In our case it was a local credit union.)
2) We set up the out of country investors with an attorney that could/ would handle setting up a company for them to purchase real estate here in the USA.
3) We than took the newly set up company to the portfolio lender and qualified for a portfolio loan.
4) Sold properties to the investors (company).
I have really simplified the process, but it took some time and lots of efforts. But the numbers worked and the out of country investors were able to purchase and get financed.
Any questions, just ask and I will answer. But here on this discussion.
Thanks,
Hey Tim, do you know how they financed their deal? I imagine the routes are the same (banks, mortgage, private, alternative, etc) but I'm curious if their lenders were foreign or American. I imagine either would work if they have the contacts and can secure credibility and qualify.
Shana,
These guys had 60k in US dollars lying around which is how they did it. After talking to them, I'm getting that it was more of an equity deal for them and they figured they'd have their savings account in US houses rather than bank dollars. I'm just trying to figure out something for people who have no US credit (as if that's honestly worth something anymore).
Tim
There are several foreign national loan programs still around. One lender deals primarily with Eastern FL while the other lends the following:
50% LTV for CA, FL, NV, NJ
60% LTV for NY
$400k minimum value though.
Tim,
We have been looking for the same and finding funding for those small amounts is hard enough as a citizen, let alone a non-citizen. I have my lender working on some avenues and if anything comes out of it, I will let you know.
Please do the same if you beat us to the punch.
hi tim
add me to your list
if you look at my profile I am here in sydney and I am looking at the same as your last client.
not sure if the way we are looking at it is the same as your last client.
I would be very interested in what structure athey bought in
and how they put the buying entity together.
what and who they used for their legals and tax as we can mirror the way they have done it.
I think funding is not the major issue as there will be lenders to lend if we buy right.
we are a start forward type of buyer.
and usually very straight shooters.
we have a way of buying the 35 to 99k properties and then we call them pooled loans not sure what you call them a bit new at your neck of the woods.
I would like to get into the buy hold refi and use the same lender to fund into australia but thats a bit down the track.
the more info on the structure the better at this stage and if that requires us to buy a property to learn we will
I have many cheap assets for sale all throughout America. What I want to do is find some investors who lend money to look at the assets I have for sale in order to "prepackage" deals for buyers. This way the investor can create the type of paper asset they are looking for backed by an asset with plenty of equity. This provides limited downside for the person financing the deal. I think that kind of structure can work for foreign nationals. Any ideas?
Hey, here is how we got several out of the country investors funded.
1) We contacted a "local" portfolio lender. (In our case it was a local credit union.)
2) We set up the out of country investors with an attorney that could/ would handle setting up a company for them to purchase real estate here in the USA.
3) We than took the newly set up company to the portfolio lender and qualified for a portfolio loan.
4) Sold properties to the investors (company).
I have really simplified the process, but it took some time and lots of efforts. But the numbers worked and the out of country investors were able to purchase and get financed.
Any questions, just ask and I will answer. But here on this discussion.
Thanks,
James,
Thank you for the advice. I did find a local credit union. I will inquire with them as to what they can do.
Tim
hi all
vadim
you need to ask to make me a collegue and I will send you thru what we are looking at doing and we can look at your property no problem
cross wind
very interesting as we are looking at nearly the same except we are using llc in each state and the structure is very similar we have been working on it for about 3 weeks now and its as close to our structures we have here and I think it can work
hi tim
I am learning your banking structures but it seems to be very similar if not the same as ours and yes we do commercial funding or borrowing here so we understand the type of loan system we want to do
and what you call pool loans we call syndicated or umberella loans between lenders so the loans stay in place just a larger bank sits at the top and pools all the different bank loans together under its banner
I am trying at this stage to find out the credit unions and the smaller banks lending criteria mainly for refinance not for purchase
here we have very different lending criteria for refi as against purchase
we do % of purchase price or val which ever is the lesser which is the same there
we have a higher % for a refi and that seems the same there
want I am trying to find out an this will be different for different lenders
how long from purchase can you refi
here for resi its 6 months but for comm its straight away
we are looking at 60 to 70% lvr or what you call lvt.
(t is total in yours r is ratio here)
but the same for calcs
anyone here that has banks that will lend to groups out side of US would be great( I will keep looking)
and for taht matter any lender that wants to lend into Australia again would love that add to my list
oh and time I think we are a very layback group and are very similar system so you will find that the Australian investor is very at home investing in the US
thanks all
There were some threads in the past 48 hours from lenders who focused on out of country buyers buying US properties - I have no idea if they are legit or not - but try the search - I know I didn't dream this - the past 48 hours.
James, can you give some details about the deal you mentioned above:
1. Did the foreign investor have to put more equity than normal to get the deal done? What % of the value?
2. What type of property was it and what was the total value?
3. Do you think local lenders would prefer doing commercial / apartment buildings as opposed to single family houses for foreigners who buy through a new U.S. corporation with no credit but plenty of equity?
Regards,
Vikram
It takes a little bit of work but an Australian can get credit through a US Bank. It starts with getting a Tax ID.
I found this book that makes it as easy as a simple step by step guide. You can check it out here.
[link removed]
MJ
I am also an oz buyer and I have managed to get some assistance from a US lender. Below are my queries and her responses. It is certainly possible! Even easier if going through an LLC.
- what level of deposit would br expected under an LLC structure? For me, around 70-80% lvr would be fine but if I could borrow 90% that would be preferred.
A: Please note the underwriting guidelines are changing every other day. Therefore, the answers I provide would be very general. Typically, banks want to see at least 15%-20% down payment for investment property. Although 20% or more would be ideal. Since you are a non-resident, some banks might require more down payment from you because of the risk. Although every banks is different, I am certain that no banks would lend on 90% LTV (loan to value).
-Am I able to borrow for multiple properties through 1 LLC?
A: Since it will be a brand new LLC, unfortunately, you will not be able to borrow for multiple properties through one LLC at this time. However, once your LLC has been established for a while and has been generating income, essentially, you will be able to use this LLC to borrow more money and buy more property in order to expend your empire. At least, that is the current regulations but some banks might have their own underwriting guidelines.
- I see alot of fixed rates being offered in the US. While I have no problem with this, in Australia usually fixed rate mortgages carry penalties for additional repayment or early repayment of the entire loan. Is this the case in the states?
A: Although this is the case in the US; however, it varies by banks and by programs. Generally, pre-payment penalties (if you pay the loan off early) only apply to those ARM (Adjustable Rate Mortgage) programs. It hardly applies to fixed rate programs, but it's always good to pay attention to such details. By the way, I have your best interest so I will never offer you programs like interest only payment or loans with pre-payment penalty. Unless it makes sense to your financial goal.
- I can provide payslips and bank stmts plus tax returns if need be. Obviously these are all Australian sourced. I do not currently have a us income or asset source.
A: These will be the financials we would request from you.
- is there a minimum loan amount for your lenders? Depending on property value and your responses to the above, I am looking to borrow around 70-80k.
A: There is no minimum loan amount for my lenders.
Hope this helps!