Financing for Foreign Investors

53 Replies

We have a lot of Foreign Nationals call us and ask about the financing options they have. 

If you are a foreign national who invests in real estate, which is your preferred financing option if you don't have the cash yourself already? Why is this your favorite option? 

I'm a foreign national, and I prefer when the loan is only based on the property itself and the cash flow it produces. It gets messy when it's based on my personal income and assets, since they're spread over several countries, some of which don't have any credit reporting system at all and very different financial and ownership systems. 

Alexander: I'm a foreign investor and I've been looking all over for financing. What are the rules for offering the financing to foreign investors? Do you look at documents, income verification or you base it on the property (that's the best).

I am also a foreigner looking to invest in multi-family complexes in the US. Being a foreigner (Canadian), will it be possible to get commercial financing only based on the cash flow of the property itself? I would be purchasing the asset through a US LLC .

Originally posted by @Rasheed Chahal :

I am also a foreigner looking to invest in multi-family complexes in the US. Being a foreigner (Canadian), will it be possible to get commercial financing only based on the cash flow of the property itself? I would be purchasing the asset through a US LLC .

Yes, it is possible to get financing solely based on the income of the property, and it is possible to obtain conventional financing as a Canadian.

The terms of what you can obtain depend on large part to the market, size of the loan, caliber of the property, and the historical financials. The truth is, it's easier for a foreigner to buy a larger property (1MM+) than a smaller one since the lenders (outside of the few local banks who can help) who will lend to foreigners aren't typically suited for smaller loans. Too much risk.

That being said, I see a LOT of foreigners who want to get into the value add game and buy an underperforming property and are seeking financing with good terms. This is not easy as most of the borrowers in this pool lack a track record of past performance, don't know the subject market, and the property has issues. None of which are attractive to any conventional lender.

Hope this helps.

Our firm has completed loans for foreign nationals.  We are typically looking at the asset.  We work on loans at 3 million and above for foreign nationals, but they do exist.

Mark

Be prepared as a foreign national if you want small value add even if you find a bank willing to fund the rates tend to be higher and the LTV lower.

The national with having to put a larger payment down then has to look at low cash on cash returns.

If a buyer is Canadian there are Canadian banks here in the U.S. in some states that will usually lend.

RBC Bank is one.

Some countries do not have tax returns and it's hard to see if the money was laundered etc.

Larger properties as mentioned are more optimal for foreign investors because the lenders know an experienced property management  company can be put in place. If there is a problem then the foreign national doesn't have to travel thousands of miles to handle it.

I haven't worked on smaller properties in a very long time. Value add,  crappy seller records, etc. equals many deals falling out and the ones that do close are a low commission. These days most of my deals are minimum 3 million and up. 2 million in certain situations.

There are definitely lots of options out there for foreign nationals ranging in ltv from 70 to 80 percent. The different variables in each deal allow for that ltv range. The higher the ltv the more stringent the guidelines may be.
~Jonathan

Originally posted by @Rasheed Chahal :

I am also a foreigner looking to invest in multi-family complexes in the US. Being a foreigner (Canadian), will it be possible to get commercial financing only based on the cash flow of the property itself? I would be purchasing the asset through a US LLC .

 In Seattle you will find that some local Banks actually have Special Loans for Canadian Citizens  ... because the Canadian economy and finance so similar to ours in the North West.  THERE IS NO NEED for you to pay hard money rates and terms when you can get 30 year Long Term conventional financing under 5.5%.  Of course the usual 30 year Hedge Fund Stated Loans are available too to any foreigner which is cash flow based lending...

BUT .....but I would recommend you check out the traditional Seattle portfolio lenders first.....They cater to Canadians. If you have good credit and income in Canada - some Seattle lenders want your business when you buy across the border here ...shoot me an email if you want a rate sheet and terms,...

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I have contacted Firstkey Lending last year and they do provide financing base on the asset for foreigners. I am not sure whether B2R will provide financing for foreigners. 

Originally posted by @Alex Franks :

Folks I have been selling to international clients for a few years. One company has done all the loans for our clients. Be a bit since we sold any properties. We made the jump to commercial side of things. They do 65 % LTV and not the best rates but was based on the property not the lender.


We had clients from Singapore, Malaysia, UK , Israel, Dubai , and Canada

If you would like to know more PM me

Alex

 Which company is it?

I cant pm you yet. 

invest in or around boston, this city has a very high rents and a constant stream of renters. Your vacancy rates will be very low and i know the city inside and out to help. Most renters are professionals, students with guarantors, or graduate students. There is also a large group of section 8 renters however they are being pushed further outside of boston because landlords know voucher limits and price their rentals just above them.

Originally posted by @Account Closed :

All of our programs are available to foreign nationals - our rehab/construction and 30 year program. We do require that you have a bank account in the US and a US LLC to close your loan under.

 What program is it?

Originally posted by @Rich Hupper :

invest in or around boston, this city has a very high rents and a constant stream of renters. Your vacancy rates will be very low and i know the city inside and out to help. Most renters are professionals, students with guarantors, or graduate students. There is also a large group of section 8 renters however they are being pushed further outside of boston because landlords know voucher limits and price their rentals just above them.

 What's the cap in boston area you mentioned?

@Xing Z.

I am not familiar with commercial leasing as I am with residential. With that being said if you invest at least 20% into a 3, 4, 5, 6 family in or around boston, you will see a great return of  10 - 15 percent.

From what I have found it is easier for Canadians than most other foreigners. I have a n Australian client looking for financing. Please feel free to contact me directly if you have a program that may work for them.

Originally posted by @Robert Adams :

From what I have found it is easier for Canadians than most other foreigners. I have a n Australian client looking for financing. Please feel free to contact me directly if you have a program that may work for them.

@Robert Adams

Look up peak lending

Tell then Alex refered you

JP or Shane Sauer good guys to now they have helped may of my Australian clients in the past

Alex

We work with Foreign investors seeking financing for Residential and Commercial properties. We can offer stated income loans or loans based of off the properties cash flow. These loans are investor friendly and there is no limit to the amount of loans a borrower can have financed.

Originally posted by @John Broussard :

We work with Foreign investors seeking financing for Residential and Commercial properties. We can offer stated income loans or loans based of off the properties cash flow. These loans are investor friendly and there is no limit to the amount of loans a borrower can have financed.

 Non residing non US residents? For what minimum amount? Period? Rate aprox. TLV?

Thanks.

Originally posted by @Rich Hupper :

@Xing Z.

I am not familiar with commercial leasing as I am with residential. With that being said if you invest at least 20% into a 3, 4, 5, 6 family in or around boston, you will see a great return of  10 - 15 percent.

 Hi Rich.

In Boston, where do you find the deals? What's the lower property cost you can find there that has a good cap rate with a low risk?

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