Newbie from Brussels (Belgium) looking to invest in the US

[Guillaume Elleboudt]

Hi everyone,

I'm a 26 years old wannabe investor from Brussels, Belgium. I have no background in real estate (I'm working as a lawyer) but ready to learn!

I'm currently renting my apartment and my family has advised me to buy my own apartment. However, I don't see it as a good investment. A nice (nice not great) apartment like the one I rent in Brussels would be around €200,000, to which you have to add about 15-20% closing costs (i.e. "registration fees" of 12.5% of the purchase price, notary's fees, bank's fees and mortgage fees). So that's about €1000/month (25 years mortgage) assuming I borrow the full amount. And if I want to rent it later, the rent would be around €750-800/month so it would be negative cash flow.

That's why I thought about investing (buy and hold) outside Belgium and came across BiggerPockets. My family think I'm crazy but I actually feel more comfortable investing in the US where I can find any information I need and research for hours and days (thanks BiggerPockets) than in Belgium where it's more complicated to find information on investing in real estate.

For now my plan is to read as much as I can, ask questions, discuss ideas and saving up in order to invest in about one year.

I know it's really complicated to find financing for foreigners in the US, that's why I would like your opinion about my plan:

I could borrow an unsecured loan in Belgium of approximately $40,000 over 10 years (approximately $470/month) + $5,000 out-of-pocket.

With that money I would be looking at buying a $40,000 turn key property (e.g. in Memphis or Kansas City). It's not a big deal if I only break even on my first deal as it would be a way to get into the US market.

Once I have a first property in my LLC, would it be easier to obtain financing as a foreigner? I'm thinking of a home equity line of credit or even conventional mortgage?

Another option could be seller financing.

Is my idea crazy and/or am I missing something? Any advice is welcome!

Thanks and sorry for the long post!

Guillaume

[Elizabeth Wilson]

Guillaume!

Bienvenue! That is an awesome goal. I lived outside of Paris for a while and remember folks talking about how expensive it was to buy a house. That was before my REI days so I didn't fully understand how much more expensive it was than here.

All those are perfectly reasonable ideas that I'm sure are done regularly by foreign investors.

I have a few suggestions for you.

1) is it possible to find "off-market deals" and not pay traditional closing costs like we can do here.  Foreclosures,  cash purchase, etc?  

2). There are tons of foreigners who come to Memphis to buy TK and other investments.  I regularly get messages from these folks asking about properties, areas or TKP.  I don't know any thing about how to best structure a deal for you but I know folks who do know.  I'd contact a couple of the big TKP in town.  I'm sure @James Wachob, @Chris Clothier, and @Alex Craig would all know how best to advise you regarding deal/business structuring.  (I'd love for ya'll to respond here so I could learn as well!)

 3) I'd aim higher than just breaking even.  I think there can be too many chances for unplanned expenses even with the best TK property.  Even if you have to save up a bit longer, that will pay off and give you a chance to learn more about investing and your chosen market.

4) Come visit us in Memphis!  Seriously,  it is the best way to learn a city and get to know other investors and providers in a market.  You will understand much more what your dollar or euro can buy.  You could also talk with local banks to see what they could offer.

Best of luck and please keep me posted.  If I can do anything else from here, send me a message!

ps. Votre anglais est excellent, mais si vous préférez écrire en français qui est très bien aussi (et il me forçait à pratiquer :)