Questions on Investing from Abroad as a Foreigner

[Tim Uittenbroek]

Just for my interest, a couple of questions with regard to investing in US real estate as a non-US citizen from abroad. Also, if there's any recommended ways of going about this, please let me know and why that is the preferred route. 

I would be interested in hearing from those that have gone down this road before. I have a couple of ideas in my head for some things I may like to do, but would like to flesh it out a bit further.

1. What are the tax implications? I'm assuming there is still a need to file a US tax return on both rental and capital gains income. 

2. Is there an optimized structure that will minimize taxation? Setting up an LLC in the US?

3. I understand that upon sale of a property there is a 10% withholding tax for foreign investors. Depending on the actual capital gains/losses experienced on the sale,  I assume this is refunded in the subsequent tax return? That could mean a significant amount of cash is tied up.

4. Is there any way of managing exchange rate risk?

5. How does one typically go about the management of the property (collecting rent, conducting maintenance, etc..)? I assume this is typically handled through a property manager. What % of rent do they typically ask? I assume it's around 10%. That could translate to as low 50 bucks per month in some instances - would a property manager really have an incentive to manage a property for that monthly fee? I realize most have a portfolio of properties they manage, but it still sounds like a lot of headache for 50 bucks.

6. Is there any chance of finding "undervalued" properties as a foreign investor (I imagine this would only be possible with a very good local partner) or would turnkey really be the only option?

7. What sorts of financing options are available within the US (if any) for foreign investors?

Thanks in advance!