Forums / Property Investing / Overseas Deals / Financing for purchase of property in USA?

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  • Profile photo of DavidRDavidR
    Participant
    @dor814
    Join Date: 2016
    Post Count: 2

    Hi Everyone,

    I am pretty new to the RE investment game. I actually just purchased my first two buy and hold properties over the summer. I live in the US but I am originally from Australia.

    My sister works as a nurse in Australia and has saved quite a bit of money (about 120 00) and she would like to invest in the US.

    I am wondering if someone on here can provide some insight or guidance for a foreigner trying to purchase property in the US.

    My sister is looking at buy and hold property and will be using financing to purchase some property. Can someone tell me if she should be looking at trying to get financing from lenders in Australia or here in the US? How does this process work for foreigners with no US credit history or income? Would lenders in the US be willing to lend to foreigners living and working overseas and would Australian lenders be willing to lend for the purchase of an overseas property.

    Also, does anyone know if my sister will still be able to claim losses from her American investment property against her personal income tax? Obviously there are significant tax breaks if she was to buy in Aus but I am assuming that would not be the case if she invested here?

    Any information on this and how to get started in the lending process would be greatly appreciated.

    Thank you so much for your time.

    David

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Hi David,

    You’ll find limited info on this here – it’s mostly Aust based property investment talk here. In terms of lending, she will need to engage with a US based lender, Australian based banks will not lend on non Australian security (property). Most US banks aren’t too keen on non US citizens borrowing there for property either, so traditionally investors have either had to pay cash OR go to hard money lenders (private lenders) who charge 6%+ rates. I have heard of a few cases where some lenders are now considering it there, but haven’t seen any specific details which are reliable enough.

    I’ll leave the tax questions to one of the taxperts.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of RedwoodRedwood
    Participant
    @redwood
    Join Date: 2013
    Post Count: 340

    Hi David

    You as a Aussie can obtain a loan in the US.

    Matters have relaxed in recent years and I just hope you focus on due diligence before investing.

    I’m in the states this friday for 2 weeks rekindling and investigating my chess moves in the states. Things have changed, the economy has rebounded, defaults have expired and house prices have jumped as well as the crappy exchange rate has meant US is not not quite as attractive as before.

    Anyhoo i’m checking out some sweet spots, and some “different” types of investments in my trip including existing land developments to move to the next level.

    I don’t believe in ghetto investments, i’m focused on not just yield but growth too. Will be a good trip its been a while

    Cheers Ivan

    Redwood | REDWOOD | SMSF | PROPERTY | FINANCE
    http://redwoodadvisory.com.au
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    SMSF - PROPERTY INVESTMENT - WEALTH CREATION AND FINANCE SOLUTIONS

    Profile photo of emma171emma171
    Participant
    @emma171
    Join Date: 2011
    Post Count: 161

    Concur with Redwood although 2 options to consider would be a) a joint venture to keep USD USD if she can’t borrow on US interest rates although with full dox (2- 3years Oz tax returns) she should be able to get a FNAP (what the US calls a foreign national loan) or b) cash out refi of existing Oz property.

    • This reply was modified 2 years, 11 months ago by Profile photo of emma171 emma171. Reason: Typo
    Profile photo of aussieinvestoraussieinvestor
    Participant
    @aussieinvestor
    Join Date: 2003
    Post Count: 67

    As above….and in addition, be aware that she will essentially become a foreign currency trader when she has money tied up overseas. If she can get finance where she purchases (i.e.. USA), she can eliminate the currency fluctuation risk, provided she doesn’t transfer cash back to Aus unless the exchange rate works in her favour.

    The US gig is complex, especially when it comes to property management too. I suggest doing plenty of research before buying.

    All the best.

    Peter

    aussieinvestor | Digital Revenue Pty Ltd
    http://appliancewhiz.com
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    Profile photo of emma171emma171
    Participant
    @emma171
    Join Date: 2011
    Post Count: 161

    Property management = if you live in the US, as a brother you will be committing to going at least once a year to do a full property inspection. Manage the manager if you have one and get before & after photos of all repairs. I haven’t changed my mantra on this in 20 years…when your house comes up for rent…call it US vacation time but get 6 monthly inspections. Demand it. I am just leaving one of my ATL properties today that was vacant so scooted around them all, completely reno’d and updated this one..loved it and by Tuesday I will be back home in the Bahamas …well “home” when I want it to be :)

    Keep your $$ as mentioned in the country you are investing in, play currency when advantageous (love going Oz now) and build a nest egg….US is just cheaper entry point and faster to play in as no stamp duty.
    You are US so will save your sister the pitfalls and a lot of those pitfalls are just cultural differences of bring in the US you just have to assume it won’t get done unless you are physically present to ensure it does. Have fun. I am Oz but US/Bahamas based, my brother is Oz..both haha 20++ years US investing..

    • This reply was modified 2 years, 11 months ago by Profile photo of emma171 emma171. Reason: Typos
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