All Forum Posts by: Tim Uittenbroek

@Brandon Hall - this is the exact info I was looking for. Thank you!

Thanks @Yonah Weiss! I'll reach out to @Brandon Hall.

Hi all,

I'm a non-resident investor and will shortly be buying my first properties in the US (NC in particular).

I'm looking for someone that can advise me on the best setup from a tax and legal standpoint.

The plan is to buy & hold and I will be buying with cash. I may potentially may want take on some debt further down the road once I've built up a decent portfolio (ie. in 5+ years).

What is the best structure to set up at this point?

LLC

- From my understanding I'll be subject to the 30% tax withholding (on gross revenue) for NR aliens

- Is this offset by the end of the tax year when I pay taxes?

- If so, at what tax rate do I pay taxes - at the personal progressive income tax level that US citizens would pay or a different rate?

- Is there a way around the 30% withholding - I understand I can elect to pay at US personal income tax level if I can prove my business is "effectively connected with a US trade or business"?

- I understand estate taxes will come into play once I "pass on" my portfolio

C-Corp

- Can avoid the 30% tax witholding for NR aliens

- Possible double taxation when taking money out of the company through dividends/salary

- Shielded from estate taxes

I'd love to consult with someone that could talk me through the advantages and disadvantages of each and help me set up the appropriate structure given my situation.

I'm a new investor and possibly looking at Fayetteville for buy & hold. Seems like there are still deals available with decent numbers unlike some of the larger metro areas in the area.

The only thing that worries me is vacancies / occupancy. Just ran a quick search and Fayetteville, NC seems to rank at or near the top when it comes to the rental vacancy rates in NC.

http://www.civicdashboards.com/city/fayetteville-n...

Could anyone comment on that or is that something you simply factor into your numbers before going into a deal?

@Tierra Hawley Me as well please.

And to everyone... what's the overall consensus on Fayetteville, NC and longer term prospect? 

The reason I ask is that see a lot of folks mentioning flipping but less that are flipping but only a small amount buy & hold.

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!

@AJ Sherman I won't be around for the holidays but will be back early next year. Will give you a shout then and maybe yourself and @Jason Tham can meet up for another beer.

@Chai Sag I'm definitely not complaining about the income tax here. I'm able to enjoy those, but I thought as an American citizen you would get taxed globally so any benefit you would get in Singapore but get washed out by Good 'Ol Uncle Sam?

@Dmitriy Fomichenko & @John Huber - Thanks for the welcome!

@Anjana Vakil At least you'll be moving back so it should be easier to pull the trigger then knowing that you will be able to manage it as soon as you're back in the US. I agree with you that investing from abroad is always a bit more tricky, but not all of us are so lucky to have access to the US market from our doorsteps :)

@AJ Sherman Great to hear AJ. Good to see some fellow expats in Singapore on here. We should meet up for a drink at some point. I met up with Jason the other day and it was good fun. Would be good to get a group of us from Singapore together to see if we can exchange ideas. Where are you planning on investing in the US?

@Naveen Desai I'd say Cincinnati is a place where you can pick up some good value properties. I was there for about 10 months myself in 2012. Never pulled the trigger though. They're doing a good job revitalizing the downtown & OTR areas. 

How is your Bangalore investment working out? I assume there are restriction on foreign investment there as well?

@Maarten Stevens Good stuff. What are the numbers like in the Netherlands these days? I haven't been back myself for over 5 years at this stage.

I don't invest in the US at the moment but may do so in the future. At the end of the day it comes down to having a good partner on the ground that you can trust, but I agree it's always easier to invest somewhere if you're present locally.

@Engelo Rumora Sounds good mate. I'll give you a call next week. On the road at the moment.

@Engelo Rumora Thanks for the welcome. No worries mate, the time difference can be a killer sometimes. Let me know when works for you in the mornings and I'll give you a call in the evening from here.

@Anjana Vakil Wow, you've been quite a few places. How did you like Vietnam? Great place. I heard they have opened up the market somewhat as well. 

In terms of real estate in the Netherlands, I haven't stayed on top of that one to be honest with you. I don't have any property there and have been gone for nearly 7 years at this stage!

@Jason Tham Nice! You don't live in Ascentia Sky by any chance do you? Since that's where I live. Seems like we might be neighbors. We should definitely catch up for a beer. I'll PM you my details. Curious to hear how your managing your investments from half way across the world.