How to set up our RE business?!

[Sascha Weinberg]

Hi BP,

it has been a long time since I last posted on here and things have changed for me personally as well as professionally. My businesss partner and I would like to finally start investing in U.S. real estate and we are looking for some advice and opinions due to our situation (in the following).

We live in Germany and are both German citizens, we have no credit in the US and do not own any properties there yet. We are looking to get into the business of buy and hold (maybe BRRR) with a focus on cash flow assets, preferably in markets like Cleveland, Kansas City, Indy etc.

Now come the problems/obstacles J

• 1) We plan to set up a corporation (not LLC) for the businesss, since there are major tax implications if we were to form a LCC. Also, we do not plan to buy in our own name. This setup might give us quite a headache from a financing perspective, but what way should we go here? Are portfolio lenders the best way to go, commercial lenders or something completely else?
• 2) Background: My business partner is in the real estate business from almost 20 years and really successful here in Germany, but I would assume that does not help with anything once we start new with a corp, does it?
• 3) We would start with a low six figure amount in cash, what would be a reasonable expectation in terms of loan amount? Would we be able to secure loans in the 75% LTV area or is that not realistic?
• 4) We also thought about starting out with JVs with someone local, would that make a difference in terms of securing a loan (given that we would be in the deal with a corp)?

Thanks in advance to everyone reading this, questions, comments and replies are much apprectiated!

Continued success to everyone!

Sascha

[Natalie Kolodij]

There are also major tax implications for having a corporation for real estate in the US. 

I would strongly suggesting working with a CPA who specializes in both international taxation and REI to ensure you don't end up in a tight spot.