All Forum Posts by: George Bailey

Got it. OK thanks for the info @Hai Loc

@Hai Loc thanks for your reply. Interesting, so you have the option to pay off the principal every five years? Do you think the rate you received was competitive with the rates for US residents or do you think it was slightly higher?

Hi all! 

I am new to the BP community and looking for some advice from you friendly people! First, let me quickly give you some background. I am British and have been working in the US for almost 2 years. I am currently on a work visa (L1B to be exact) and at the start of the employer sponsored green card process. 

My plan is to house hack a small 3/4 unit multi-family next spring/summer, preferably with a 5% down conventional loan along with some PMI (assuming the figures work). Why the wait? 2.5 reasons (1) I want to learn as much as possible before diving in i.e. research, building out a local network & team etc. (2) I am at the start of my green card process so I want to ensure that it is well underway beforehand! (2.5) I am tied into a lease until next summer (I could easily sublet).

My questions for you are:

1) Is it possible to attain a conventional loan on a work visa (I believe it is after some research but I wanted to check with the community) and does anyone have experience in doing so?

2) What can I do in the meantime to increase my chances of the bank saying "yes" when the time comes (if different to a US resident)? Generally, will 2.5yrs of US credit history be enough in my specific case (assuming everything else is in check)?

Thank you in advance!

Hey Siwei! 

Your question is specific to each individual. I looked into an LLC and came to the conclusion that it was more hassle than it's worth for myself, who is at the very start of the real estate game and yet to build an asset base worth sueing for! Most investors starting out will have very little equity in their first few property deals making it less worth the lawyers time to go after them. That being said, it can of course happen and once I grow and get more properties under my belt I may look into an LLC then. Ultimately, like @Mark Ainley said, work with your attorney/account to come to your own conclusion but I can highlight a few points which may be of help. 

- The main and obvious pro is Limited Liability (its in the name) - if you get sued, the suer only has access to those assets contained in the LLC (assuming everything is set up correctly and air tight)

- LLCs can be tax efficient when comparing to a corporation and setting up one individually is relatively easy as the income flows through, but with friends (like in your case) you would have to explore a multimember LLC which requires its own business return (more paperwork)

- Acquiring a conventional loan could be difficult. Most banks wont lend to finance an LLC property. You will most likely have to go down the road of commercial lending where rates and fees are higher

Maybe having your attorney draw up a contract between you and your friends and taking out a very good insurance policy would work instead like @Ali Boone suggests.

I hope this helps. I am speaking from learnings and not experience so do double check with others, including of course your attorney! Either way, LLC or no LLC, good luck and let me know how it goes (especially if you end up investing in Chicago)!

@Henry Lazerow this is great information, thanks for spreading the knowledge! I met up with @Brian Nguyen yesterday and took a look at his new place, he was singing your praises! Great work.