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Updated 6 months ago, 05/29/2024
First investment property as a foreign citizen
Foreign citizen currently living in Miami.
Any recommendations in general?
How to get approved for a loan?
Should I buy with an LLC?
Open for any suggestions
Hey Stefano Vrolijk,
Speak with a local mortgage broker and get pre-approved for a loan. I also recommend that you attend some local real estate investment meetup groups. You'll be able to meet seasoned investors that can direct you in the right direction.
Stefano
You need a team, buying a property is the easy part.
as a Foreign citizen there is a tax FIRPA that you may have to pay and is 15% of Sale price.
Need an accountant, a lawyer and a relator that understands that.
Join investors group and kee learning here best blog
Luis Maqueira
Hi @Stefano Vrolijk, my team and I help foreign citizens purchase investment properties all the time. I'd be happy to provide some recommendations and suggestions for your situation as a foreign citizen living in Miami.
First, it's important to have a good understanding of the local real estate market, including pricing trends and neighborhood dynamics. I recommend doing your research and looking at properties online. This will help you make informed decisions when it comes to buying.
When it comes to getting approved for a loan, the process can be a bit more complicated for foreign citizens. Generally, lenders will require you to have a substantial down payment. You may also need to provide additional documentation, such as proof of income and employment, and may need to have a co-signer who is a U.S. citizen or permanent resident.
In terms of buying with an LLC, it can be a good option for some foreign buyers, as it can provide additional liability protection and potentially offer tax benefits. However, there are also some downsides to consider, such as higher fees/interest rate. It's important to consult with an attorney or an accountant to determine whether an LLC is the right choice for your specific situation.
You can reach out to me and my team who can guide you through the process and help you navigate any challenges that may arise. Good luck with your search!
@Stefano, there are a host of lenders that can lend to foreign nationals. Expect to pay a slightly higher rate and make a larger down payment than what you see on lender's websites with regard to their rates, points and LTVs. Some lenders have a greater appetite for foreign national loans than others. Working with a good loan officer or mortgage broker can help you to get your file set up in a way that presents you in the best light to underwriters. Hope this helps. good luck!
- Brian Fung
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Quote from @Stefano Vrolijk:
Foreign citizen currently living in Miami.
Any recommendations in general?
How to get approved for a loan?
Should I buy with an LLC?
Open for any suggestions
Do you have an ITIN number? For how long have you lived in Miami? You may need to provide an LOE for your current living situation, since many DSCR lenders will want to verify you won't live in the property.
If you are qualifying as a Foreign National, you will need to close in an LLC. Depending on your credit score in the US and credit trade line history, you could put as low as 25% down. However if you have no credit history in the US, be prepared to put at least 30-35% down at a higher rate.
- Erik Estrada
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- 818-269-7983
You have to work with a team that is investor-friendly and has experience working with out-of-country investors like yourself. That includes real estate agent, mortgage broker, title company/attorney etc. Plus they have to be trust-worthy and with trackable experience. Consultations with a local investor-friendly agent and lender as well as attorney-owned title company would be very beneficial in this case.
@Stefano Vrolijk it all depends on your credit history, whether you have an SSN/ ITIN and how much you can put down. It's definitely possible to get a loan as a foreigner but the rates will be high(er) and the downpayment required will be as well. Probably 8%+ mortgage interest at 40% down to make a safe assumption. If you're looking at Miami, let me know, about 30%-40% of buyers here are foreign and a lot of them get loans.
Hi Stefano!
You’re in an interesting position depending on how long you’ve lived in the U.S. If you’ve yet to build up substantial credit in the U.S. you can apply for foreign national specific loans that don’t take credit history into consideration when qualifying as in some circumstances you can get better rates and terms applying as a FN when your U.S. based credit history is in it’s infancy.
Securing financing upfront is paramount. I always recommend starting with a prequalification letter to get a solid view of your purchasing power before heading out into the real estate market. Miami is a great place to invest both for short and long term rentals and with condos, property management is simplified but be sure to ask about HOA fees as early as possible especially if you intend to go with a DSCR loan.
DSCR loans are usually what I recommend to ensure approval as your qualification is not based on your income but the projected rental income of the property.
Buying with an LLC is a great way to safeguard yourself and your property, highly recommended, however, if you're purchasing through an LLC that was not formed specifically for the purposes of acquiring your investment property, ensure you own more than 50% as LLCs can get complicated with multiple equal shareholders.
Let me know if you have any questions around financing- I’d be happy to assist!
@Stefano Vrolijk Hi! I work with investors from other countries and there are foreign national loans available. If I’m not mistaken you put around 50% down but I can connect you with a lender to get better info
Quote from @Khalid Bryan:
@Stefano Vrolijk Hi! I work with investors from other countries and there are foreign national loans available. If I’m not mistaken you put around 50% down but I can connect you with a lender to get better info
Hey Khalid - that sounds a bit higher than standard. From my experience its between 25-30%, mostly 30% though. I have many international clients in search of property but want to invest in the U.S. just need a realtor to guide them, so I'd be happy to connect and swap info. I'll send you a DM to connect.
Oh perfect! So glad you could provide a better insight. The only information I had to go on was with the last Lender informed me so maybe it was specific to the company they were with. They mentioned they didn’t need any income. Definitely looking forward to getting more information on foreign national loans when you can, but yes, I can absolutely help your investors out here in Florida.
You can give me their numbers and I will call them and keep you updated on our progress.