International Investors for Domestic Deals

[James Letchford]

I was recently traveling abroad (Australia) for my day job and told some longtime friends of mine about the real estate investing I'm doing in the US. They were immediately intrigued by my approach/success and wanted to know if there was an opportunity to invest. I wasn't able to find anything in the forums that addressed my questions, so here's what I'm looking to be answered:

1. How can I legally accept foreign currency to do domestic deals?
2. Is there a special business structure that I need to form/adhere to in order to make this proper?
3. What are the tax implications for me and my foreign investors?
4. Is there anything else I should consider by taking on foreign investors?

Thank you in advance for your response(s).

[Andrew Postell]

@James Letchford some basic answers here that I hope can get you pointed in the right direction:

1. How can I legally accept foreign currency to do domestic deals? - You won't get paid in foreign currency.  The foreign investor will transfer funds to your bank, which will be exchanged at a certain rate, so that you receive US dollars.  If you are acting as a real estate agent for them, you'll have even less to do with it since they will wire their funds to the title company, who will disperse funds at closing to the appropriate parties.  Taxes are paid just like normal.  
2. Is there a special business structure that I need to form/adhere to in order to make this proper? - Nope.  You can use any structure that is already in place to receive money.  But consult your tax professional for any advice that they might give you.
3. What are the tax implications for me and my foreign investors? - That question is for them to find out.  They need to consult their tax professional on their end.  
4. Is there anything else I should consider by taking on foreign investors? - This will certainly depend on your role, what they want to do, etc.  So if they are using you as a real estate agent, and need money for loans, you'll need to find them a financing solution.  If they are just giving you money to invest, then a standard agreement would need to be in place for that type of relationship.  

Hope this helps in some way.  Thanks!