All Forum Posts by: Colin G Murphy

Hi @David Fernandez

I´m not a qualified expert and you should certainly seek professional advice on this, but I have borrowed from non US residents in the past and my understanding is that a 30% withholding tax would apply. So if they are earning 5% interest on their loans, then 1.5% of that should be withheld and paid to the IRS, giving the lender a net interest rate of 3.5%. If they want to receive a net of 5%, then you would probably have to pay an interest rate of 7.1% and withhold 2.1% of it. 

If you have paid the overseas lender 5% and didn´t withhold anything, the IRS will still want that 30% when tax returns are being filed.

As long as they are in a country with a double taxation agreement with the US, then they should not have to pay the same taxes twice, but again, it depends on their location and personal situation and both borrower and lender should seek professional confirmation. You don´t want to mess this up and risk getting fined.

Either way, if you are borrowing money secured on US properties, then it is more straightforward to borrow from US lenders. But if they are happy with 5% then it can still be competitive for you to give them that and pay the withholding taxes because most local hard money lenders will charge much more than 7%.

Hi @Alan Byrne

I would follow @Thomas Downes advice and look at specific websites/services in Ireland that can help clarify the rules regarding house hacking and the owner occupier vs investor mortgage rules (and loopholes). 

The BP site is wonderful for general advice and for expert opinion on US rules and regulations, but not for overseas laws.

Hi @Mahesh Babu

Bidding for this property is currently only open to owner occupiers. You might be able to bid next Thursday morning if it hasn´t been sold. Nice looking home though and a decent rental area. If it was well renovated, you could probably rent for $1075 per month. If it was a basic renovation, then $900-$950.

Had a quick look at permits and there seems to have been a couple of roof patches in 2006 and 2008 but not full replacement, so you would want to verify that. Last AC permit was pulled in 1992 so that probably needs replaced. Then add paint inside and out, new kitchen, updated bathrooms, new carpets in bedrooms, new light fixtures, updated sockets and you´re probably looking at a budget of $8000-$9000 in cosmetic updates, $6000-$7000 for a properly permitted roof and $3000 for a new HVAC system. I´d recommend a fence ($900-1000) too as it´s a corner lot on a T junction and fences are important to renters with kids and/or pets. 

In terms of overheads, you should allow 5% of gross rents for vacancies, 5% for maintenance, $1550 for property taxes and $1000 if you want decent liability and wind/fire/theft insurance.

Work backwards from there and you´ll have your bid price. 

Hi @Ahmed Hamed

I´m also Irish but left the country many years ago. If you´re not living in Dublin, then I don´t really see any advantages to buying there from abroad. There are other markets (like Tampa, Florida where I operate) where cash flow is higher and prices and taxes are lower. 

Keep saving your money and keep researching.

Hi @Alex Balan

This post seems to have gotten a little sidetracked considering your question had nothing to do with cap rates. 

The good news is that there are decent 3/2 $100,000 opportunities that will rent for $1000 in Tampa. That niche is more or less my specialty - and I spend every day trying to buy more of them. Some we keep and some we sell post renovation to investors. We have had most success in West Pasco (New Port Richey, Port Richey, Holiday) and Pinellas County (which is a little more expensive). 

I would advise to you avoid smaller 3/2s under 1000 sq ft, AE floodzones (expensive to finance), homes with sinkhole prior investigations/repairs, homes near busy intersections and homes near large mobile home parks. If you have enough time you can definitely find deals. 

Very best of luck.

Hi @Isis Franco

I would recommend you at least get a 4 point from a licensed inspector. That should set you back about $100 and will provide accurate information on the age and estimated useful remaining life of the roof, plumbing, electrics and HVAC. For example, there is a big difference between having a 5 and 15 year old roof.

A contractor won´t necessarily notice any of that stuff, especially if they are focusing on cosmetic updates to kitchens, bathrooms and floors. 

I work in a busy and fast paced business which buys, renovates and resells homes to property investors seeking passive income streams. We are a core team of three that bought more than 70 properties last year in Pasco (Port Richey, New Port Richey & Holiday) and Pinellas Counties. We plan on buying a lot more this year.

I see a lot of people out there asking for "mentors" to help them get started in real estate investing. Well, this is a post asking for "mentees". I am looking for a couple of resourceful people who are natural hustlers and fast learners who will not mind driving around in circles in the areas where we are active - looking for vacant properties, mailing letters to owners, giving us a heads up on FSBO signs and generally sourcing off market leads. It is not really something you can do for a week and then take a break - I would like to meet men and women who are willing and able to do it over a sustained period of time, because that is the only way to become successful at it. You will need your own car and drivers license.

In return for spending a lot of time running around, you will get to spend some valuable time learning how the rehabbing and house flipping business works - you can accompany us as we analyse deals, submit offers, negotiate with sellers, plan renovation scopes, manage contractors and deliver a finished product to an investor. You will also get a generous percentage of the profit on any deals that you bring us. The harder we see you working, the harder we will work to teach you the business and make you successful. 

If this is of interest, please PM me with a little background information and lets schedule a call to discuss further. 

@Karina D., @Thomas Toeller, @Ricardo Naya, @Gonzalo Monte

I didn´t realise there were so many people in Madrid tuned into Biggerpockets that are interested in real estate. I have been living in Madrid almost 10 years, but have a full time property investment business in Tampa Florida that I run with two local partners (we buy and renovate 8-10 properties per month). How about we all meet up for a business lunch next week (28-29 Dec) to discuss local opportunities in Madrid? 

@gabriel duaso - would you be interested as well?

Welcome to the site @Martin Lee, always great to see other Irish people interacting with the investors here. It´s a great source of information, even for those buying outside of the US. 

Hi @Michael Haynes

I´ve been on the Networth Realty mailing list in Tampa for 18 months or so and have spoken to them on numerous occasions about various deals they´re advertising. Don´t think I´ve bought any from them yet, but they seem to be good people and solid wholesalers.

Like you say above, most of their properties need work - you just need to run your own numbers, do your own due diligence and make an offer that suits you.