Introduction of a first-time investor from overseas

[Gregor B.]

Hello BP community!

My name is Gregor, I'm in my mid-30s and from Austria/Europe. My interest in US RE was awakened back in 2008 during our road-trip through Florida when my wife and I travelled to the US for the first time. I remember as it was yesterday, when we were so impressed by the huge houses with the pool screens next to the canals in Cape Coral. "How awesome it would be to own something like that. But let's be serious, there's just no way to ever own something like that." So we did not spend any more thoughts on that (back then) unrealistic dream. This year we spent our holidays again in the US and this time, I started being more serious about it, registered here, listening to podcasts such as the BP money show (which helped me a lot with bringing structure in my financial houshold – thanks to @Mindy Jensen and @Scott Trench), reading RE/finance books, etc. What discouraged me was when I realized that foreign investors need to overcome a lot of hurdles with respect to RE investing in the US. Since I don’t want to quit my journey before it has even begun, I want to ramp things up by bringing structure to my plans and starting to actively engange with the BP community after being registered for quite some time.

So, what am I currently facing with respect to my RE journey and what are my investing plans and goals? Since I’d be investing from overseas, everything seems to be a bit more complicated:

• The biggest hurdle I’ve to overcome in this context is definitely the financing part, which seems to be an adventure on it’s own for foreign investors – a lot of lenders do not lend to foreign investors, some only lend to foreign investors, who are not first time investors, etc.

• Once I can tick off this part of my checklist, I have to connect with a CPA, who has experience with working with clients from outside the US.

• After this is done, I guess I can serioulsy start to think about buying a property. In terms of properties, I figured that turnkey properties are the way to go for me. In a picture perfect world, I would like close on my first property within the first half of the next year.

• From the first deal onwards, my goal is to build a cash-flowing rental property portfolio with properties located in different markets.

• While doing so, with the gained experience and knowledge, I want to help other people, who may be in the same situation I was initially in, with their journey.

I’d be happy to connect with people/companies here at BP, who/which are working with foreign investors or can recommend contacts in this regard (lenders, CPAs, turnkey property companies, etc).

What can people/companies working with me expect from my side? I consider myself as someone, who wants to make life easier for my business partners and give something back. That means that I put as much of an effort as possible in my projects and highly value my partner’s time and business – which is especially important, when dealing with people, who are working/living thousands of miles away and in a different time zone.

I hope, these few lines work as a proper introduction and help to jump start my journey.

I this context: all the best, best regards and enjoy the rest of your Sunday!
Gregor

[Matthew Song Loong]

Welcome, my fellow neighbour :-)

I recently had to check on some house prices in Vienna for my business plan. Rent is pretty low there, I believe...

Anyways, I hope the States will be more profitable to rent out, I believe it's rather hard in our local area...

Cheers,

Matthew

[Lassy G.]

@Gregor B. Hey Great to have you at BP. I am also from Europe ( The Netherlands 🇳🇱) with almost identical story. I just returned from the United States. I am still struggling with the jet lag :) . Welcome to BP. There is a lot to be learned here. Great community where people like sharing and helping each other.

[Gregor B.]

@Matthew Song Loong

Hi Matthew!

The prices/rents for houses/apartments in Vienna and the areas around it became ridiculously high in the last couple of years. An 860 square foot apartment in one of the outer (blue collar) districts of Vienna costs about $350.000+ nowadays and rents for about $1.100+ - the prices for lots start with about $250-300 per m^2/10.7 square feet.

So, it‘s super tough to make the numbers work here - unfortunately.

[Charles Carillo]

@Gregor B.

@Lassy G.

@Matthew Song Loong

It is great to have you on BP! We work with a number of foreign investors. If you are interested, I can help make the introduction to a CPA and lender that both specialize in foreign investors. Send me a PM.

[James Wise]

Originally posted by @Gregor B.:

Hello BP community!

My name is Gregor, I'm in my mid-30s and from Austria/Europe. My interest in US RE was awakened back in 2008 during our road-trip through Florida when my wife and I travelled to the US for the first time. I remember as it was yesterday, when we were so impressed by the huge houses with the pool screens next to the canals in Cape Coral. "How awesome it would be to own something like that. But let's be serious, there's just no way to ever own something like that." So we did not spend any more thoughts on that (back then) unrealistic dream. This year we spent our holidays again in the US and this time, I started being more serious about it, registered here, listening to podcasts such as the BP money show (which helped me a lot with bringing structure in my financial houshold – thanks to @Mindy Jensen and @Scott Trench), reading RE/finance books, etc. What discouraged me was when I realized that foreign investors need to overcome a lot of hurdles with respect to RE investing in the US. Since I don’t want to quit my journey before it has even begun, I want to ramp things up by bringing structure to my plans and starting to actively engange with the BP community after being registered for quite some time.

So, what am I currently facing with respect to my RE journey and what are my investing plans and goals? Since I’d be investing from overseas, everything seems to be a bit more complicated:

• The biggest hurdle I’ve to overcome in this context is definitely the financing part, which seems to be an adventure on it’s own for foreign investors – a lot of lenders do not lend to foreign investors, some only lend to foreign investors, who are not first time investors, etc.

• Once I can tick off this part of my checklist, I have to connect with a CPA, who has experience with working with clients from outside the US.

• After this is done, I guess I can serioulsy start to think about buying a property. In terms of properties, I figured that turnkey properties are the way to go for me. In a picture perfect world, I would like close on my first property within the first half of the next year.

• From the first deal onwards, my goal is to build a cash-flowing rental property portfolio with properties located in different markets.

• While doing so, with the gained experience and knowledge, I want to help other people, who may be in the same situation I was initially in, with their journey.

I’d be happy to connect with people/companies here at BP, who/which are working with foreign investors or can recommend contacts in this regard (lenders, CPAs, turnkey property companies, etc).

What can people/companies working with me expect from my side? I consider myself as someone, who wants to make life easier for my business partners and give something back. That means that I put as much of an effort as possible in my projects and highly value my partner’s time and business – which is especially important, when dealing with people, who are working/living thousands of miles away and in a different time zone.

I hope, these few lines work as a proper introduction and help to jump start my journey.

I this context: all the best, best regards and enjoy the rest of your Sunday!
Gregor

 Welcome to the site Gregor. Financing is gonna be tough, you're right on the money there but it isn't impossible. Check out TD Bank. I've seen them do several loans for non US citizens.

[Justin Windham]

@Gregor B.

Welcome to Bigger Pockets!

This is a great place to learn and network. A lot of forum members are very knowledgeable in their respective fields related to real estate investing, whether that is real estate sales, wholesaling, flipping, rentals, lending, self-directed IRA and Solo 401k investing, or tax and legal guidance.

Discounts on some products and services are offered to BP members: https://www.biggerpockets.com/perks/pro

The site has quite a few tools that can be helpful for new members. I like the search features: https://www.biggerpockets.com/search

Alerts can be really helpful too: http://www.biggerpockets.com/alerts

[Gregor B.]

@James Wise

Hi James!

Thanks for mentioning TD Bank. Just looked it up and as far as of what I could see, they offer loans to Canadian citiziens. I‘ll try to get in contact with this bank and ask if they offer a loan program to non-Canadians as well.

BR and thanks

Gregor

[Gregor B.]

@Charles Carillo

Hi Charles!

Thanks for your words and your offer for helping me to be introduced to your contacts. I dropped you a PM.

BR and thanks

Gregor

[Gregor B.]

@Lassy Gnini

Goedendag Lassy!

Thanks for your kind welcoming words. It‘s good to know that other investors from outside the US were/are facing the same challenges.

Since you are back from the US and only suffering from the jetlag, I guess that you have already mastered the first tough steps of your real estate journey? :)

Could you share some tips how you tackled the mentioned challenges?

BR and thanks

Gregor

[Lassy G.]

@Gregor B.@Matthew Song Loong

Hello fellow investors

It was a learning experience to visit the states with the eyes of real estate investor. You need to do some research before leaving. However the reality can be different than you read on internet. States have differentes regulations which can lead to mismach information. The best investment I made was my trip. i learned a lot.

1. Networking: I am sure i am not telling any secret when i underline the value of networking. Many American investors have had email contact with counteless foreign investors via email but at some point of time these email led to nothing. So they are cautious with foreign investors. Emailing is nice but meeting other investors and talking to them is priceless. The old fashion way is the best according to me.

2.I had some challenges opening a bank account: the requirements for many banks was to have some kind of US ID as a primary identification plus your foreign passport

3. In Amsterdam and correct me if I am wrong, the real estate market is defined by neighbourhood. We have bad and good neighbourhoods. In many US cities good and bad is defined by blocks and streets. One street might be good and the street after that is bad and you don't wanna be there.

4. Be careful with the cheap houses see on trulia or zillow. Ask yourself why US investors are non buying these houses. Because you will not make no money (good property manager find these street or blocks too challenging, they don't want to go there and good tenants just don't want to live there too). As foreign investors we will need those property managers to run our houses. Boots on the ground are very important.

Any experience you guys might want to share???

[Jordan Sinclair]

Originally posted by @Lassy G.:

@Gregor B.@Matthew Song Loong

Hello fellow investors

It was a learning experience to visit the states with the eyes of real estate investor. You need to do some research before leaving. However the reality can be different than you read on internet. States have differentes regulations which can lead to mismach information. The best investment I made was my trip. i learned a lot.

1. Networking: I am sure i am not telling any secret when i underline the value of networking. Many American investors have had email contact with counteless foreign investors via email but at some point of time these email led to nothing. So they are cautious with foreign investors. Emailing is nice but meeting other investors and talking to them is priceless. The old fashion way is the best according to me.

2.I had some challenges opening a bank account: the requirements for many banks was to have some kind of US ID as a primary identification plus your foreign passport

3. In Amsterdam and correct me if I am wrong, the real estate market is defined by neighbourhood. We have bad and good neighbourhoods. In many US cities good and bad is defined by blocks and streets. One street might be good and the street after that is bad and you don't wanna be there.

4. Be careful with the cheap houses see on trulia or zillow. Ask yourself why US investors are non buying these houses. Because you will not make no money (good property manager find these street or blocks too challenging, they don't want to go there and good tenants just don't want to live there too). As foreign investors we will need those property managers to run our houses. Boots on the ground are very important.

Any experience you guys might want to share???

 Hi Lassi,

Some good points there. 

I was able to open an account with 2 forms of foreign ID (passport and credit card)

[Gregor B.]

@Lassy G.

Thanks for your insights!

ad 1: Especially the networking part seems to be very crucial. I guess that this is also something, which might be even tougher for first-time foreign investors as they don't have any reputation and/or history. I completely agree with you, that talking face to face beats the email-ping-pong-game every time. My approach is, that if it's not possible to travel to the US to meet the business partners then at least a Skype/Zoom video-call should be held on a regular basis.

ad 4: That's the reason why I'd like to go with turnkey properties to make my first steps in RE. Although they are higher priced and have lower yields compared to the BRRRR-strategy for instance, this model ticks most of my personal checkboxes while reducing some significant risks. And, I have to be honest to myself: I should learn to walk before I even think about running, meaning that the most important part for me at the start is to gain more and more experience. And once I'm comfortable with doing what I'm doing, I still can think about changing strategies.

[Lassy G.]

@Gregor B. Thank you @Jordan Sinclair

Turnkey could be a way to invest in real estate. It can save you a lot of time and give you the benefit of leveraging from your turnkey provider knowledge.
Most of the time they know the market better if they are local. However you also need to be cautious about turnkey companies. Real Estate is a business. Some investors have given a bad name to our industry.
What i want to say is even if you decide to buy turnkey don't forget to do you due diligence regarding the turnkey firm. Do some research on internet about the company, read reviews.
But not only about the company, do some research also about the area you are purchasing your investment property.
Check the numbers too. Turnkey providers always tend to always have better numbers. So do your own math.

[Jennifer S.]

@Gregor B. welcome to BP and best of luck on your journey! I'm based in the UK but have done property in the US and UK. It's great that you are seeking out accountant references. I have been astounded how much tax can matter, even if I haven't wanted to be tax led. Having studied investments I always wanted to let the investment proposition lead and tax follow but tax can wipe out much of your gains, or on the flip side there can be big tax advantages. 

If you are mobile within Europe you may want to research Portugal's program where your non Portuguese sourced income is not taxed there. I am not sure how that works for EU citizens--I have been learning about the Portugal option from US citizens who have achieved FIRE (financial independence retire early). It sounds like there is a blossoming expat community in Lisbon, some of whom also have real estate investments in the USA. 

If you're tied to Austria maybe google the FIRE movement there in case there are meet ups. I have been pleasantly surprised that even in fairly high cost London there is a FIRE movement. The reason I mention all these meet ups is it might be a way to meet people who have a similar situation to you (onshore EU investing in USA)