I have access to foreign investors. What would you do?

[Allan L.]

I have access to a lot of high net worth people in Asia looking for investment opportunities. 

I don't know what percentage of them would be interested in U.S. real estate but I was wondering if anybody has advice on how to approach them. 

[Jonathan Twombly]

@Josh Caldwell

You need to be careful about taking foreign money for a number of reasons.  First, if you are planning to get mortgages, it will increase your workload with the bank, which will need to know all of the people in the ownership chain under the "know your borrower" laws.  The burden of background checks, which the banks will charge to you, will be greater when the investors are overseas.  I know this from experience, as some of my investors are from Japan.

Second, there are some major tax hassles involved under FIRPTA and FACTA.  If you have foreign investors, you need a "blocker".  In other words, they must set up a domestic corporation through which to invest to "domesticate" their investment.  The issue here is that the US government does not want money flowing from your deal back to a foreign country where it cannot be taxed.  So, these investors will need to establish a US entity that is subject to US taxation.  Otherwise, you will need to do withholding from the distributions you pay them, and you will have to withhold at the maximum rate.  This is an administrative headache and your foreign investors won't be too happy about the withholding either. 

There are a lot of issues involving foreign money.  Please do your research.