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Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71I would have to agree with this article. After many many months of due diligence on our company and the inventory that we supply to our clients we were able to get a local commercial bank in Dallas to lend to our foreign national clients. It was not an overnight process and took plenty of face to face meetings with senior bank executives and finally the bank board for approval.
For a foreign national, finance is hard to get…no doubt about that. But look at this realistically. Banks took a hiding on the residential property market. The issue they face is that your asking them to take a bet on someone who doesn't even live in the USA, someone who likely has zero experience or background in property investing. Someone who likely doesn't have a clue where good neighborhoods are, someone who probably has no idea on buying foreclosures or what is a quality refurbishment is needed by a bank and would most likely be out on their own with property management. There is a lot more to consider then just your income, assets etc to decide whether they want to take you on or not.
Our foreign national buyers have exclusive access to the real deal…foreign national finance from a commercial bank. It is real…we have closed plenty of loans so far. Basic terms are 30% downpayment with a rate of 5.75%. Loan terms are either 15 or 20 years depending on the loan amount and a 1% origination fee. Currently limited to Dallas but shortly will be available for Houston and hopefully San Antonio as well
Prior to this finance coming on board I agree with what Nigel & WI stated. Products for foreign nationals were either way to expensive or promises that would never come to fruition. Private finance did came from around 9.5% but you needed to refinance or repay it in 3 years so it was only a short term solution. You have to be wary of private finance or finance provided directly by the company selling the homes….good chance you will pay too much for the home.
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71Sab,
Are you planning on visiting the USA to open the bank accounts ? If not you will find it hard to get one opened from Australia. From experiences that my clients have suffered during the process…I would say Wells Fargo would be one to stay clear from.
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71Hi Sab,
Your probably going to get a few opinions flowing on where & why but I'll start with my opinion. One of the features of incorporating or forming an LLC is that you do not necessarily have to form the company in the State where you do business (in your case this means buying property). When deciding on which State to incorporate in, there are basically 2 choices:
1. The state where you live or where you carry on business
2. Wyoming, Nevada or Delaware (thought I'd throw in another state people sometimes mention)For the majority, incorporating or forming an LLC in your home state or where you do business is usually the easiest and least expensive option. This is because virtually every state has laws that require you to "re-register" a Delaware, Wyoming or Nevada company in the state where it is actually doing business. For example, if you form a Nevada corporation but your physical business (buying properties) is located in Colorado, the state of Colorado will want you to "re-register" as what’s called a "foreign corporation" (a company that was not originally incorporated in Colorado). This is especially true if you intend to get a bank account and business license. In most cases, registering as a "foreign corporation" or LLC will subject you to all the same taxes and fees as an in-state company. So you will probably have not avoided any taxes or fees, plus there is the added expense of registering as a "foreign corporation" in your home state and any annual fees in both states.
Delaware is where most large corporations (Fortune 500, Nasdaq, etc.) are incorporated. The reason for this is that Delaware’s body of law is more business-oriented and they have a large and advanced business court system to handle complex legal litigation. It is the state of choice for both large corporations, foreign corporations and many fast-growing or high-potential companies.
Nevada has popularity for both large and small businesses. This is due to Nevada’s very pro-business climate, low-tax mentality and the lack of an information sharing agreement with the IRS (all other States share company information with the IRS). Also, shareholders in Nevada corporations are not public knowledge (though Officers/Directors and Members of LLC’s are).
Wyoming also has a very business-friendly climate and features some benefits compared to a Nevada entity including lower filing fees, lower annual fees, and more
As far as taxes….an LLC is a flow though entity meaning once all the income and expenses are taken into account the outcome or difference flows through to the members or shareholders which would need to lodge a tax return with the IRS.
Hope this assists.
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71If it were me…I would leverage the $100K into 3 good quality A grade homes in better neighborhoods. Better quality area's & homes will attract a better quality tenant and if/when US homebuyers start buying their own homes again these will be the area's where you will see the demand.
There is merit with worldinvestors comments about not spreading your wings too far with too many cities….your then increasing your challenges that come along by having so many different companies to deal with (property managers etc). Concentrate on 1 or 2 and become proficient in those cities. The US is a big place….you will find other markets within markets to enable you to diversify.
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71Hi Richard,
For the benefit of any forum readers who may not understand some of the lingo….I think it's important for you explain to them the difference between qualifying for a "second home" loan versus an investment loan. Quite a difference.
I agree with Lawsj…..quite a few banks will entertain the second home loans for foreign nationals but investment loan approvals is pretty limited. We are fortunate we have a bank that we deal & refer clients to that will do investment loans for foreign nationals and have been keeping them busy with pre-approvals which we insist on before they try and secure any homes if using finance. They give us a pretty quick turnaround for a pre-approval and take about 72 hours. Once they select a home and go to contract it takes about a month by the time they could close on the deal.
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71Luke B wrote:worldinvestor wrote:Seriously, how could you possibly make an informed decision on whether this group is sourcing suitable properties when you have no information. A couple of street names and viewing zillow is just not going to cut it. Would you use the same criteria to purchase property in Australia?Also, zillow has some useful information but what I have found is that property estimates appear to be always on the high side.
WI
Seriously, i don't think you could. Apologies if my intent was ambiguous. mostly i was trying to see how much information I could extract. I recon I could have found the house had I enough patience.
I would be hesitant to run with these guys, I've made my decision to not use them, take from that what you will.
I did speak to them about finance though. what they told be is that they set you up with a llc and then using the ein number set up a hsbc premier account (though you'd need $100k USD to do it). you can then get lending via hsbc. they also mentioned some private lending at circa 7%, with the intent that you'd use that to build up credit then move to a national bank with better rates.
you could also just get a hsbc premier account in Oz, though the entry requirements are steeper.Caveat: I'm pretty new at this, so I may say something pretty daft
If they are telling you that you can go from private funding…build a credit rating and then move to a national bank….. they are wrong, wrong, wrong.
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71lawsjs wrote:These guys, it must be remembered, can read like a who's who of banned company directors in their home countries. These guys are the type who would have moved from roofing insulation to school halls, solar panels and then had the brains to discover real estate in dodgy US cities.You forgot to mention previous roles in selling two tiered real estate in Queensland
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71lawsjs
No disputing what you say…I have seen companies offer finance exactly along the same terms you mentioned….nice little earner for them on top of what they make from the property.
I just wanted to add however that there are some genuine finance offers available for foreign nationals….albeit rare. We have finance from a local commercial bank in Texas that lends 70% of the appraised property value over 15 or 20 year terms. Rates from 5.50%. Obviously the property needs to stack up to bank requirements.
Most finance offers as you say are private funds on short terms so come 3 years your stuck with a problem. is the case you mentioned in your last paragraph the one Jay was involved with in sorting out ??
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71labradorinlove
I have to tell you it doesn't sound like a good situation you find yourself in. I have a good friend who lives in Phoenix. He is a real estate agent, knows finance and is an investor himself and knows plenty of good attorneys. This guy is taking you for a ride for sure.
If you send me an email I will pass on my friends contact details to you to see what he can sort out for you. I think you know your going to have to eventually jump on a plane to Phoenix.
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71Just to get the original topic back on track…….Atlanta or Houston ??
Only two U.S. metro areas have had increases in home values since the peak of the housing market in 2007, and they're both in Texas: Houston and San Antonio.
According to Oxford, Miss.-based FNC Inc., Houston reported a 4.8 percent rise in home values, while San Antonio reported a 2.7 percent increase.
Nationally, home prices were down 3.5 percent at the end of 2011 compared with prices reported in December 2010.
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71jayhinrichs wrote:Peter how much down on these loans… Just curious…30%
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71Just thought I would clarify a couple of things since my last posting on this topic. I have had lots of questions from posters asking me about the foreign national finance we have for our Dallas & Houston investment homes.
The rate is 5.50% if you want a 3 year ARM. This rate is the floor and is linked to the Wall Street Journal Prime Rate. Conditions built into the loan approval are that the rate can't go up by more then 2% each 3 year reset
For a 5 year ARM the rate is 5.75%….same loan conditions apply.
If the loan amount is over $100K then the loan is amortized over 20 years….less then $100K the loan is amortized over 15 years instead.
We like to get a loan pre-approval in place before you purchase a property. The bank takes around 48 hours to give this and have a pretty simple list of requirements. Contact me if you have any questions or require more information.
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71And from a similar type of source……..
Top 10 Cities for Moves
Daily Real Estate News | Wednesday, February 15, 2012More people are flocking to the South, according to a list from Penske Truck Rental on the top moving destinations from last year.
Atlanta once again tops the list, which was compiled through online consumer truck rental reservations by Penske from 2011.
“As this list indicates, U.S. residents continue migrating primarily toward warm weather areas,” says Don Mikes, Penske’s vice president of rental.
Here are the top places the company says people are moving to:
- Atlanta
2. Phoenix
3. Orlando, Fla.
4. Dallas/Fort Worth
5. Chicago
6. Houston
7. Denver
8. Seattle
9. Sarasota, Fla.
10. Charlotte, N.C.
Interesting that Chicago makes the list since Allied Van Lines (previous post) has Illinois in the top 5 states people are moving from…….the only thing I can see is that Allied's report is on a state level and Penske's on a city level.
The common theme seems to be Texas & Florida
http://realtormag.realtor.org/daily-news/2012/02/15/top-10-cities-for-moves
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71emma171 wrote:If you KNOW that that information is NOT available to you without paying for it in your own country, and no one is telling you otherwise the "hush hush, I will let you in on a big secret about how to learn the US market…..buy my system for just 6k and you too can learn these secrets" sounds very appealing….. Why? BECAUSE YOU DON'T WANT TO GET RIPPED OFF… You want to do due diigence, you just haven't a clue how to get it otherwise… I met 2 people who had literally done crash courses amounting to over (LMAO) the price of a property "studying" how to invest in the US…. And these are people who have collectively 12 properties in Australia and neither of them had even been told about Zillow or Trulia or Redfin! Easiest thing to sell on the planet is fear….. I don't care if people buy or not but dear Heavens let's give them the tools to decide without them being ripped off……Emma,
You raise a very good point and I had never thought of it that way. I was always confused & questioned why people pay fee's for memberships etc to buy in the US but the way you put it…of course it makes sense…they feel they are getting some sort of protection and let in on a big secret…guess it's a safety in numbers attitude !! plus as you point out…in OZ we don't have the same free information around like they have in the US
From a Texas perspective and the fact we are a non disclosure state….sites such as zillow, trulia & redfin are not reliable and if you dig into their website disclosures it tells you so with Texas and 10 other non disclosure states. They cannot list a sale price when it was sold…it can only tell you the last list price (part of non disclosure)but that's a start… plus it has all sorts of interesting facts & figures anyway to at least give you some idea. At least you can have a look at comparables,taxes etc.
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71You will get no arguments from anybody when it comes to comparing the banking system in the US versus Australia. In some ways they are advanced yet in other ways 20 years behind the times. I kept an article from USA Today when I was over in Dallas on of the trips last year. It stated "the venture announced on Wednesday by BoA, JP Morgan & Wells Fargo will allow customers to transfer money electronically from their checking accounts to another persons account. Initially customers won't be able to transfer unless the person your paying has an account at one of the 3 banks but by next year they plan to open it up to all institutions" WOW…how advanced is that !! What a joke….but at least it looks like technology is catching up.
The issue with Wells Fargo and needing to be at a branch to send a wire transfer happened to one of my clients as well but he ended using the bill pay system for what he needed where they sent a cheque…said up to 10 days but took 4.
I have a personal account with Patriot Bank USA and thankfully all I need to do is email a signed letter and they send funds back to Australia within 24 hours of my letter so not all banks are bad !!
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71jayhinrichs wrote:Texas Cash Cow Investments Australia wrote:We have finance available for foreign national buyers. Rate of 5.75% with a 30% down payment and 1% origination fee. Funds are provided by a commercial bank in Texas. Repayments are amortized over a 15 or 20 year term depending on the loan size and/or property. A maximum of 5 properties or $500,000-00 in lending per entity. And we have have many clients successfully funded so we know it's the real deal.
It won't assist you getting any equity from your Kansas City property as lending is restricted to the North Texas area's and are quite specific due to Fed laws. To my knowledge this is about the best you could get or expect for a foreign national. Other then that some borrow from hard money lenders but pay upwards of 11%++ and they are typically only short term loans of 3-5 years so your stuck come 3-5 years in trying to refinance it.
Nothing better then leverage to increase your cash on cash return !!Texas cash cow:
great loan product are they financing thier own foreclosres or a small commercial bank that really likes their local market.? thats as good as a US borrower full doc could get. bodes well for those areas I think
Hi Jay,
No it a reasonably substantial commercial bank that has been getting bigger buying out smaller banks and that has committed a few million dollars to a loan programme for our clients after doing some huge due diligence on our company and inventory we sell to investors. Once that is exhausted we will all sit down again in front of the bank board and see if they will commit to another round of funding. They have a lot of confidence in the market we are dealing in. I agree Jay…..a lot of US borrowers are lucky to get these sorts of terms although most of our US clients get funded by another bank on 20% down payment terms from 4.75%
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71cam0479 wrote:AUSTRALIAN PROPERTY INVESTOR IN USA
I have an Australian family trust, that is the managing entity of a LLC in Florida. How do I get an EIN? The SS-4 form requires an ITIN, but the W-7 form to get an ITIN requires an EIN.
You don't need a ITIN to get an EIN for the LLC. The IRS will allow it without the responsible party having a SSN or ITIN
Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71We have finance available for foreign national buyers. Rate of 5.75% with a 30% down payment and 1% origination fee. Funds are provided by a commercial bank in Texas. Repayments are amortized over a 15 or 20 year term depending on the loan size and/or property. A maximum of 5 properties or $500,000-00 in lending per entity. And we have have many clients successfully funded so we know it's the real deal.
It won't assist you getting any equity from your Kansas City property as lending is restricted to the North Texas area's and are quite specific due to Fed laws. To my knowledge this is about the best you could get or expect for a foreign national. Other then that some borrow from hard money lenders but pay upwards of 11%++ and they are typically only short term loans of 3-5 years so your stuck come 3-5 years in trying to refinance it.
Nothing better then leverage to increase your cash on cash return !!Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71kingsr wrote:Hi Peter,That's very nice of you to offer. I will keep that in mind for when I hit Dallas. Can you pm me the details of the places to stay in Dallas and what the discounts actually are?
Would be good to meet with you and your team and see what you have on offer.
Cheers.
More then happy to. You will need to change your member contact details as it says you do not accept emails.
The places are close by to our office so we can arrange to pick you up, go to the office and meet the team, spend a day or so out having a look at properties and area's we deal. You would also get a chance to stop by our Property Management office to meet the Property Managers and ask them questions. Then after that we drop you back off to your hotel. My preference is the Holiday Inn when I stay. Can't beat the $6 breakfast for value !! Our corporate rate gets the room at least $30 a night cheaper there.Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71kingsr
If your stopping by in Dallas then I can give you names of places to stay where you can use our corporate code and get discounted room rates…the offer comes with no catches or obligations. Qantas fly's direct from Sydney to Dallas a few days a week and I guarantee Homeland Security is friendlier in DFW then LAX !!
- Atlanta
