Out of Country Investing?

Question

Out of state investing seem to be very hard, out of country is it a mission impossible?

Send your tips!

- Would you invest?

If yes, where and in what kind of property would you invest?

- Turnkey or not?

- Rehab or “ready”?

- How to build a proper full local team that you can trust from abroad?

- Loans or cash?

How to find a lender for foreigners?

Jennifer S. · Answer

@Amedeo M. not sure on foreigners getting those rates in the UK. I will let you know what I find out. There is also going to be an additional cost to borrow via an LLC which is needed to be able to deduct mortgage interest.

However, (from memory), currently you can do furnished lettings and get the mortgage interest deduction without an LLC but I wonder how long that will last given the upcoming pressure on government finances.

I might start to look into that opportunity though, since it has become very difficult to travel abroad at the moment. Assuming the lifting of the current lockdowns, people still want some place to get away from time to time. Even for this opportunity though one has to be neutral to positive on the overall UK economy and currency.

Ujwal Velagapudi · Answer

I've found that financing within each country is unique, and can be difficult, which is why it just has to be cash only. For example, Japan, tends to be this way.

Other countries you do have to deal with their local governments, regulations, corruption(!), etc. which will be so foreign to non-locals, going well beyond just trying to gauge if the property itself is worthwhile. It's comforting knowing all the laws we have here, being able to use English, have legitimate contracts, etc. but it's not the same in all countries. A contract can be useless (sometimes it is in the US too :) ).

Currency exchanges, inflation concerns, especially in emerging/developing nations.

I've considered it, and have seen it from others, out of country can be OK, but I see the risk higher than the reward. If you're going to get X% returns in another country, can you not get X% return within your own country, or even within a 2 hour radius of where you live?

For me, it was more the allure of traveling so much and I just thought it would be amazing to have a property in all the cool places I've been able to visit. So it came more from a personal desire, since financially they were very comparable (at best) investments to what I could find local to me. I realized I'd rather just make a safer investment locally, something that I could work on scaling easier here, and then just slowly have one or two small properties out of country more as a personal residence/timeshare sort of asset than a true investment.

Jason Wray · Answer

You can use a foreign national loan where they have both credit score/No credit score program.  Your going to be maxed out at 75% Max up to $1Million.  Over $1MM up to $5Million but at 60% LTV.  Rates vary based on loans size, and terms selected.

Amedeo M. · Answer

@Jennifer S.

I think it depends where and what kind of property class you are searching.

Not sure in UK figures are any better.

Maybe in Manchester and another couple od places can see around 6/7% before expenses. But I don’t know about loans there..

Amedeo M. · Answer

@Ujwal Velagapudi

I agree with you but there are countries where you have a return before all the expenses of 2%, 3% if you are lucky.

Add expenses, loans, taxes and is better to buy stocks.

Out of country is hard and sometimes figures are not the expected but when you start at 10/12% even if you go wrong 30%/40% is much better than in your own country.

Also, in many places they give you one loan up to 70/80% one time only. Then is 50%.

In US it seems hard to get a loan as foreigner but is possible. Yes at 6/7% and sometimes 8% and need to put 30% down. But I believe it’s all about “the overall deal”. If you buy well you can make money. My two cents.

Jeremie Torres · Answer

Even weirder in the Philippines. I'm in contact with a high school friend, let's call her J, who is now working for one of the biggest developers there: Ayala Land.

Foreigners cannot buy land + houses unless you're a Filipino citizen or your spouse is a Filipino citizen. So for most foreigners, they can only buy a condo. J has been sending me listings of condos offered by her company and have it rented out or AirBnB. A property manager definitely has to come into the picture as you can imagine Manila is literally is on the other side of the world.

Just as long as you're making US currency, you're a king/queen in the Philippines lol. You can buy a condo very easy. The newest high-scaled ones go for about the same you would pay here in the US but last I checked, the majority of investors don't target high-scaled properties. The popular spot is of course by the US Embassy in Manila. High rises condos are sold for an amount that would clock in about $400-500 monthly payment.

No capital for downpayment? No problem, you can amortize it believe it or not and own the unit outright and get it rented/AirBnB right away. Direct message me if you'd like to talk/chat with J just to kinda see the ropes. You certainly won't have to buy, you'll just get to have some insights at least.

Have you seen the youtube video from Alux of the best overseas country to invest in? Highly recommended. You never know when you venture into Asia. Great spot for vacations too if you're into that kinda thing.

Amedeo M. · Answer

@Jennifer S.

Can foreigners get loans 2/3% in Uk?

Jennifer S. · Answer

@Amedeo M. yes I hear you- numbers are tight everywhere but if I can borrow in the UK at 2-3% (albeit floating) that makes a difference to 6.5-7% for a US loan for US property. If I was based in the US and could access good rates, maybe some off market deals, I'd do US

Jennifer S. · Answer

@Amedeo M. I had a place in Boston that I sold and looking to reinvest in other markets. But at 6-7% interest rates and today's prices for houses, it's hard to make the numbers work in the markets I had been interested in. Maybe I will turn back to UK opportunities. I have another holding outside the US that cash flows ok because I bought it some years ago.

Amedeo M. · Answer

@Jennifer S. Are you investing in turnkey or what?

Where?

Out of Country Investing?

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