All Forum Posts by: Tomas Buedo

Hi @Marc S.

It depends on your goals and the time you can / are willing to dedicate to investing. 

Buying a small multi will require to study a market, build a team there and then manage the whole process from getting a deal, to a potential rehab and overseeing the property management company you decide to work with. You'll definitely learn a lot more by going down this road and the growing equity on your properties will help you fund more deals (cash out refi...) but it will require time and dedication. 

Investing in a syndication requires work up front to vet the sponsor your investing with and it's very passive from then on. You're basically in the back sit enjoying the periodic payments and hoping for a juicy exit when the property / fund is liquidated. 

Why not do both? If you have the funds to do so I'd try both paths and figure out which works out better for you. Plus this is a way to diversify the risk. 

Hola @Bruno Morales

It is definitely doable, I just did a cash out refi on a property I bought remotely (from Argentina as well!) a few months back. As @Andrew Garcia mentions the best way is to open an LLC to create a US entity and there are plenty of lenders that do lend to foreign nationals. Things to take into account is that we usually get a slightly higher rate, closing costs (international background checks...) and a lower LTV. The best LTV I was quoted was 65% although some told me they found 70% for foreign nationals. I went with a 30 yrs fixed rate DSCR loan where the property numbers are what matter, not your personal credit.

Building a team locally in the market you are investing is a MUST and then managing everything from the distance can sometimes be a challenge but it's not impossible.

I'd suggest to select a couple of markets, build a team with at least a deal finder and a property manager and once you are confident enough to start making offers create an LLC in that State.

Reach out if you have any specific questions!

Good luck and nice to see more foreign nationals daring to make the journey on BP!

It should not be a problem, with a work visa you most likely have a SSN and other requirements (address, bank account...). 

If you plan on returning home in 3 years and believe that the syndication exit will come at a later time I would consider investing in the syndication through an LLC. Check with a CPA if that has some tax consequences but since an LLC is a pass thru entity it should not. Even though it's foreigned owned (by you) the LLC will always be considered a "US entity" and you can keep receiving the quarterly payments into the US based LLC account.

Hola @Fco. Javier Y.

As you mention that you plan on getting SFH and rent them long term I believe the best product for you would be a DSCR loan. Those are commercial loans based on the income generated by the property and it does not matter if you are not a US person. I'm a foreign national myself and am currently refinancing a duplex in FL using a DSCR loan, and doing everything without going to the US! Although this process is doable it also is more tedious and expensive and you'll most likely have to go to the embassy or use a local notary and then have the documents apostilled (if you are in a country where that is allowed) as @Caroline Gerardo mentioned.

@Steve Vaughan you can actually get 30yrs fixed on a DSCR commercial loan (I'm closing on one next week!) but rates are a bit higher than conventional loans for sure.

Since you are foreign LTV will most likely be capped at 65% and as for minimum loan amount, it will vary for each lender but I would say you'll have a hard time finding a loan smaller than 100K (meaning a property value of 155K+). Maybe you can find a lender that will group a few houses into 1 loan. There is a similar thread were you can find more details on lending to foreing nationals and feel free to DM me if you have any questions.

https://www.biggerpockets.com/...

Hola @J. Pablo Fernández!

I'm a foreign national myself and am currently closing on a refi for a property I purchased a few months ago. Big national banks won't give a loan to a foreign national, but if you talk to a smaller local bank you'll have more luck. DSCR loans as @David Garner suggests are the most fitted and as long as the property qualifies commercial lenders don't care about the fact that you are foreign national. The only difference is that most will only finance 65% LTV and not 75% or more if you were a US person.

As mentioned, I'm currently closing on a refi and have contacted several lenders that offered me terms, DM me and I'll gladly send you all their contact info.

Hi @Abdul Hafeez Jamali

As Ryan mentions it will vary depending on the deal. I'm a foreign national and I'm currently closing on a cash out refi for a duplex (commercial loan) and I'm looking at 5.375% on a 30yrs fixed and 65% LTV.
The rate, buydown, loan type... will vary depending on the deal you are looking at, but as foreign national I have not been able to find any broker / lender that will go higher than 65% LTV so that's most likely what you can expect.

Good luck!

Hi Marty,

Thanks for your input an reliving this thread!

I do have an account with Mercury but for a non RE related business, they are great.

I purchased a duplex last august in FL, did a complete rehab and both units are now rented. I'm currently talking to a few lenders to do a cash out refi. It's been a great learning experience so far and I'll be hunting for the second deal as soon as I'm done with the refi.

How has your experience been investing from NZ?

Hola Oscar!

Welcome to BP and thanks for posting about investing as a foreign national. 

I'm also a new investor from South America (Argentina) and I was right where you are a few months ago. I felt your excitement and confusion all at once! I actually got my first offer accepted today on a duplex in Jacksonville FL, so pretty thrilled about that!

1.5 / 2% rule in a B- / C+ neighborhood seems VERY unlikely, specially in today's hot market. Plus as an out of state (or country in our case) it will take some time until you can build a team and network and be able to find the best deals. Being far away and depending solely on others to manage the rental for you I would not go into a rougher part of town, numbers may seem great on paper but you most likely will have severe headaches. 

If you have 35/50K and you want to be more active I would suggest finding a property that needs some TLC but would still qualify for a loan. Though harder, you can get a loan as a foreign national (terms are usually 35% down and 5-6% interest rate). Once you fix it up and rent it, you can then refinance it to get part of your money back. That would be the BRRRR strategy.

Other advise as a foreign national is make sure you talk to an account BEFORE purchasing anything, taxation can be very different for non-us (Estate tax, FIRPTA withholding...). You most likely will be purchasing the property under an LLC.

If you want to be very passive you can always get into a syndication. 50K should be enough to get started and you leave the management of the asset to experienced investors while still getting the rewards of investing. I had a great talk with @Charlescarillo today about this, you should reach out to him if that's something you want to find out more about.

Hope that helps, feel free to contact me if you have any questions, I'm no expert, just a beginner like you but willing to help any way I can

Thanks @Jim Spatzenfeld Great resources

Thanks for the tip on C-corp @Jim Spatzenfeld. I figured the best way was to buy properties under an LLC. I guess being the foreign owner of a US C Corp I would also have to file a personal tax return in the US. I'll seek advice from a US CPA on this one before doing anything!

As for mortgage I know that some lenders do give conventional loans to foreigners, normally requesting a higher down payment, do you know if they also offer refinancing? My idea would be to do BRRRs, using cash to buy and rehab the property and eventually pull as much of that cash out.