RE Investing in the US from outside the country

Foreigners Buying in the USA
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RE Investing in the US from outside the country

Kristian Piippo
Oslo, Norway · Member since 2018 · 1 post · 0 votes

Hey guys, 

I am a 24 year old guy from Norway and very interested in real estate investing. Been listening to the BiggerPockets podcast for a couple of years now and would love to hear from any fellow foreigners who have invested in real estate in the US while not living over there. 

I previously went to college in NH and therefore have a few contacts there whom I could potentially partner up with on deals. Would love to hear from anyone with experiences on this kind of out-of-the country investing. 

Did you partner up with landlords or other investors? What kinds of loans did you get? Any loopholes you had to jump through being a foreign investor, etc? 

Thanks in advance!

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Richard J Reid
Investor · Namibia · Member since 2020 · 28 posts · 28 votes
6y

Hi Kristian

I am originally from Scotland but now live in Namibia. I have been investing in property in USA for over 6 years and purchased several residential properties all from a distance without ever having to visit them. I have used two different companies and set up a great team of people on the ground to manage my portfolio. So it's certainly possible. My advice is to speak to as many people as you can and ask lots of questions as well as getting references to verify people's services. I set up an LLC and registered for my ITIN number, I have an attorney an accountant, and a management team of course this has additional costs but if you find good deals it can still turn a profit. Most of my deals have been private lending which comes at a higher rate but again you just got to make sure you work it into your deal.

If you have a history in NH that may be a good place to start searching for deals as you may feel more comfortable but at the end of the day, it's all about the team you build and finding good deals.

Good luck and reach out any time if you have questions. 

RJR

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  • Richard J Reid
    Investor · Namibia · Member since 2020 · 28 posts · 28 votes
    6y

    Hi Kristian

    I am originally from Scotland but now live in Namibia. I have been investing in property in USA for over 6 years and purchased several residential properties all from a distance without ever having to visit them. I have used two different companies and set up a great team of people on the ground to manage my portfolio. So it's certainly possible. My advice is to speak to as many people as you can and ask lots of questions as well as getting references to verify people's services. I set up an LLC and registered for my ITIN number, I have an attorney an accountant, and a management team of course this has additional costs but if you find good deals it can still turn a profit. Most of my deals have been private lending which comes at a higher rate but again you just got to make sure you work it into your deal.

    If you have a history in NH that may be a good place to start searching for deals as you may feel more comfortable but at the end of the day, it's all about the team you build and finding good deals.

    Good luck and reach out any time if you have questions. 

    RJR

    3Reply
  • Yotam Tavor
    New to Real Estate · Israel · Member since 2020 · 1 post · 0 votes
    6y

    @Richard J Reid thanks for that ☝
    Could you estimate how much, percentage-wise, having this configuration adds to your expenses?

    I've set up LLCs before, so I know that side of things, but curious about the average costs of a management team to pilot from abroad. Would you say that it's another 5%? 10% more? less?

    Thanks - trying to gather data so I'm able to make better decisions.

    0Reply
  • Jerel Ehlert
    Attorney · Austin, TX · Member since 2014 · 890 posts · 759 votes
    6y

    If you don't partner, you have to hire agents (as in principal and agent, not broker-agent) to act as your "man of business" in the States.  You also have to consider foreign investor withholding taxes.

    0Reply
  • Charles Carillo
    Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
    6y

    @Kristian Piippo

    What types of properties are you interested in purchasing? When we work with foreign investors we suggest they open a US LLC (through a CPA or Attorney). This makes the investing process much easier. DM me if you have any other questions.

    1Reply
  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 4k+ votes
    6y

    @Kristian Piippo

    If you a foreigner investing in US real estate you have to be aware of the following items

    ITIN - You may need to apply for an ITIN before you can invest in US real estate

    FIRPTA(Foreign Investment Real Property Tax Act) - The sale of US real estate normally results in withholding requirement at the time of sale.

    ECI(effectively connected income) / FDAP(Fixed Determinable Annual Period) - This is the way your rental income will be treated form a foreigner's perspective

    Tax Treaty - Is there a tax treaty between the US and your country? If yes, that may provide you some benefits/reduced withholding rates, etc

    [email protected]917-280-8544
    Basit Siddiqi CPA4.880 Reviews
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