All Forum Posts by: Wade Chilcoat

https://youtu.be/ygdQmu4q24s

Here is a great update on the current Milwaukee market. I’m using Marcus to sell off some properties and I’ve been really impressed with his intel on the local market. 

@Ashish Acharya

Hi Ashish,

Thanks for the detailed response. Because I am making between $40k-$75k each year in the stock market, I was looking into having my RE losses eat into the capital gains I am earning in stocks. It looks like I would need RE professional status to do this and getting a local RE license and working as an RE agent seems like the easiest way to obtain this qualification from the IRS. 

I will talk to my accountant later this spring to get his take on things (after tax season), but I just wanted to get an idea now of what I should be focusing on before the big move back to the USA next year.

Hi everyone,

My wife and I currently live in South Korea and plan on moving back to the USA in early 2019. Right now we own 9 turnkey SFH's and plan on having 24 by the end of the year, maxing out our 20 Fannie Mae allotment in the process. Because our W2 jobs, rental income, and stock sales may put us above the $150k threshold for real estate deductions for married-filing-jointly, I am looking into getting "real estate professional status" designation by the IRS in order to write off of those interest payments and depreciation. However, because I do not manage my properties myself, I can't in all honesty claim that I actively work >750 hours per year on my rentals to satisfy the IRS requirement.

I am finishing an MBA in finance right now and when I return to the US I was wondering if I could get a job with a commercial real estate company or private RE equity company being hired as a consultant through my c-corp. This would satisfy the IRS rule of having a 5% or greater ownership in the company which actively conducts real estate activities through which one can claim RE professional status. The upside for the potential employer would be that they would save a ton in to having to pay me any benefits, and I could earn a steady income while still claiming RE professional status.

Does this sound feasible? As I see it my only other options would be to buy some local rentals and do the property management work myself to get the 750+ hours per year or get a RE license and be a RE agent. However, I would prefer to put my newly minted MBA to better use and have steady outside employment.

Any insights or suggestions would be greatly appreciated!

Thanks,

Wade

Hi Josh,

The banks look at income from my job here in Korea in lieu of having a W2. The process becomes more complicated because multiple documents need to be translated into English, but at that the end of the day I have yet to be turned down for a mortgage. If you already own some cash-flowing rentals, the banks will take that into consideration as well.

I recommend using a turnkey company for investors living abroad because they provide a great resource for helping you find lenders who have experience dealing with ex-pat investors. In addition, they become a valuable team member to make phone calls and send emails in local time to help verify everyone engaged in the process is doing what they should. Sure, using a turnkey is not as profitable as doing everything on your own, but if you are a longterm buy-and-hold investor I think the profitability difference becomes negligible over time.

Thanks, @Eric Gabriel. 

With the interest rates being near historic lows we are trying to lock-in all of our loans before the rates begin to climb again. She will file her second US return next spring, so perhaps we can start house hunting next summer. 

Where are you in Korea? I am in Daejeon but go to Seoul every now and then. Send me a PM if you'd like to meet up sometime.

Hi Everyone,

I am a US citizen who is married to a Korean national. My wife just obtained her US permanent residency earlier this year, and we would like her to qualify for her allotment of 10 Fannie Mae mortgages when we move back to the USA in the spring of 2019. I currently have three traditional mortgages and should get my final seven by the end of next year from the pending sale of my NYC apartment. My question is: how we can set things up so that my wife will best qualify for Fannie Mae's when we return to the USA?

Here is some additional information:

1) I added her name last year as a joint account holder on my credit card to help build some credit history

2) She was issued a US social security number when she worked several years ago in NYC as a nurse upon finishing nursing school at CUNY

3) She has held a "Citibank Korea" checking account for several years

4) She currently works for an international pharmaceutical company here in Korea making decent money (~$USD50k per year)

5) We have filed our taxes separately for fiscal year 2016 and will do so again for 2017 and 2018 so that she will have 3 years of tax returns on file

6) We currently own 7 rental properties that are all held in various LLC's which are managed by our c-corp. All of the LLC's are in my name except for one which is in her name, but she is vice-president of the c-corp.

Should I have all of the income generated by the c-corp be paid to her so that her income becomes more attractive to lenders? Given our current situation, how easy or difficult will it be for her to qualify of all of these loans?

Thanks,
Wade

Hi @KreightonReed,

I'm happy to hear that you all are starting to accept them. I hope the rest of the industry follows your lead. I tried using that particular service in the past, but they could only validate US driver's licenses at the time and not passports. I believe they have since then updated their software to accept US passports. 

I used a similar service before for other types of documents without any problem, but it is the title companies that would often refuse to accept digital signatures. For some Indy property I was purchasing, I even called the county clerk's office in Indiana where the gentleman I spoke to confirmed that Indiana accepts e-notary signatures, but the title company still wouldn't budge.

This creates a big hurdle for us international investors as oftentimes the only solution is to use the notary at the US embassy, but you must schedule at least two weeks in advance, and they are only open during business hours (for $50/per signature nonetheless). For those of us that live on the other end of the country and have full-time jobs, this can be a logistical nightmare.

Some of my ex-pat friends here in Korea suggested that I try a local Korean notary, as several of them needed to have marriage documents and other such non-RE related matters notarized. The local notary wanted to charge me about $5,000 USD because their fee is based off a percentage of the property value....crazy!

My hope is that some of these title companies learn to embrace the 21st Century and start accepting e-notarized documents. In the meantime, an American notary could probably finance a "notary tour" of Asia charging $30/signature- still cheaper than the embassy.

Hi @Marco Santarelli and @Steve Olson! We will be talking soon about Indy or Birmingham/Montgomery...

This may be a warning to all of you out there considering investing in a co-op: be careful because you cede all control to outside parties.

I listed my New York co-op last March as my research indicated March was the ideal month for sellers in Queens. We listed for $280K, had an offer for $270K that same week which the buyer later retracted, but then had another buyer lined up a week later willing to pay asking price- even better! 

Long story short, I had been requesting the 2016 financial statements on the building since April 29th....I just got them last week, 15 weeks later. The buyer was unable to secure any financing until the bank had the financials, which I was promised were coming "very soon" or "next week" for the last three months. Luckily, the buyer has the patience of a saint and really loves my building (her friends had lived there) or otherwise she would've run away months ago.

I really wanted to play hardball and get my closing attorney involved to send nasty letters threatening legal action, but she warned me that if we got too aggressive the new building owner could just refuse any new buyers that wanted to get approved by the co-op board. We are still waiting for the declaration of insurance, but at least the largest hurdle has been cleared and we should probably close in late October or early November. 

My wife thought I was nuts for selling my NYC apartment for some modest SFH's in the midwest, but after seeing the ordeal I have had to go through just requesting simple documents from the co-op board, she's happy we are getting rid of it. This deal has taken almost three months longer than it should have, all the while my unit has been sitting empty while I am still on the hook for $450 in monthly co-op fees.

I'm not saying to avoid dealing with co-ops completely, just realize what you are getting yourself into before you take the plunge. 

Hi Daniel,

Do you know how I could get in contact with the investors' group in Seoul?

Thanks,
Wade

Hi Ali,

We have six in Memphis and one in Indiana. Later this fall I am looking at buying some more Indy or getting into Alabama depending on market conditions at the time. I have been working with Norada for my turnkeys and they have been great holding my hand as a foreign investor. 

From what I have been reading, California is a very tough market for gaining passive income through cashflow, so I can see why you would be interested in investing out-of-state. Any advice for a newbie?