Financing in Atlanta>Question Details

andy, Home Buyer in Atlanta University C...

Im a foreigner investor.could any one helping me understand better where would i face chalenges?is that properties so cheap? tax for foreigner?

Asked by andy, Atlanta University Center, Atlanta, GA Sun Dec 23, 2012

how about getting financing? what would be the % rates here?

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11
Buddy,this is really helping..thanks
0 votes Thank Flag Link Sat Dec 29, 2012
The status of a person in the United States makes different loan programs available depending on the length of stay that the person is allowed to stay in the country.

We will try to describe these options from least difficult to most difficult.

PERMANENT RESIDENT ALIENS

These people are able to apply for a loan in exactly the same conditions as any US citizen. Loans to these customers are purchased automatically by Fannie Mae and Freddie Mac. The person must show us the ?green card? issued to him by the Immigration and Naturalization Service (INS). Sometimes the bank will ask for an authorization to contact the Social Security Administration ( SSA) to confirm the social security administration. These borrowers have access to all loan programs, first mortgages, second mortgages, home equity lines of credit and mortgage insurance. Borrowers must have a valid social security number.

H1B VISA HOLDERS

H1B visas are issued to international workers who come to the United States for a definite period of time. Usually between three and six years. Normally banks treat these applicants as permanent residents, in some cases they will ask to see a petition to extend the residency permit. Interest rates and conditions will be similar to those offered to US citizens. The SSA will have provided these applicants with social security numbers.



WORK PERMIT

Known as the Employment Authorization Document ( EAD) the work permit is given to students, fiancées of US citizens, foreign diplomats, special workers. Fewer banks are willing to provide a mortgage to these persons due to the short term they are allowed to stay in the country. Other banks state that they are only concerned that the person is in the US legally and will provide a mortgage under normal conditions.

FOREIGN NATIONALS

It has become very difficult to obtain mortgage financing for foreign nationals in the last year. Fannie Mae and Freddie Mac have removed those options from their offerings. Most national mortgage lenders that provided foreign national mortgages no longer offer them. Several banks in Florida still offer loans to foreign nationals who are buying property in that state. The borrower usually has to put 25% as down payment and provide proof of employment and credit in his native country. They must provide a tourist visa that allows them to visit the US and the home they buy in the US will be considered a second (vacation) home for them. It is unfortunate that this kind of financing is so restricted at this moment. Investments by foreigners at this time of a glut in the housing market and a weak dollar would open up many options to sell homes.



ITIN MORTGAGES

For many years the Internal Revenue Service ( IRS) has provided non US citizens with Individual Tax Identification Numbers (ITIN). These numbers are used by the IRS to track (and be able to tax) income from dividends, savings, commissions and other income generated in the US. The ITIN does not allow the person to live or even be in the United States, it is only a medium for tax control. Some companies however are using the ITIN to identify their customers in credit transactions and thus reporting them to the credit bureaus. A limited number of national banks offer mortgages to ITIN holders. Some banks will use the ITIN number when assigning customers checking, savings accounts and CDs. Some local and regional banks offer mortgage loans to customers with ITINs. These customers provide a history of employment, sometimes alternative credit documents ( utilities, insurance bills, retail accounts, cellular phone bills) and bank statements to qualify for a mortgage loan. At one time loans for these customers only required 3% down payment, now most programs require between 10% and 15% down payment.


Fred Yancy, Broker
Crye-Leike Realtors
(678) 799-4663
http://fredyancy.crye-leike.com
0 votes Thank Flag Link Sat Dec 29, 2012
Hi Andy,
Let me keep this short. You have gotten a lot of advice in the previous answers but non seems very encouraging. Let me cut right to the chase. Here is a Private Money Lender that deals regularly with Foreign Investors. They can at least answer your questions and probably finance your purchases. Their contact information is:


The Westmoore Group, LLC
http://www.westmooregroup.com
Ph: (646) 801-6190
Fx: (646) 619-4291
The Westmoore Group, LLC is a licensed lender in the State of Georgia and operates under the license #30544.

Best of luck and Welcome to American Real Estate Investing.
0 votes Thank Flag Link Sat Dec 29, 2012
The "Foreign National" program is available to HB1 or J1 Visa or other employer sponsored visa programs. Minimum down is 35%. Rates are less than 7% on a 5 year balloon amortized for 30 years. This product is very liberal with regard to income and assets. The house may be purchased for primary, secondary or investment purposes. Although the bank does not pay the loan officer a commission or referral fee, no up front fees are allowed to be charged to the buyer as this product is governed by Fannie Mae.

Other types of financing: Called private equity funds or Hard Money, this money is available to just about anyone for any reason (Real Estate, Aircraft, Watercraft, business ideas, start up companies, etc), regardless of where you live.

Mental Challenge: Your challenge will be accepting high interest rates, high costs to close and costs up front. These products are intended to help you get financing of the property. It's your job then, to find out how to pay them off in 5 years or less.

Legalese: Start with a Limited Liability Company (LLC) and use a Federal Tax ID Number (FEIN or TIN). The best way to start, however, is by opening a Family Trust and using the LLC within the trust to buy the property. This will give you the best protection against law suits. Once you get your LLC and TIN, ask the lender to report your payment history to the credit bureaus (Experian, Equifax, TransUnion) in order to start building your credit history here.

Funds to Close: You'll want to make sure that you have at least 40% of the sales price in your pocket before getting started. Not all of the funds are used for down payment, however, they may be used for other fees. Remember, the idea is to buy and sell properties until you've saved enough money for higher priced properties requiring higher down payments or for paying cash.

Income: Hard Money does not require you to show income, simply they want to know how you are going to make the payment (renting out the property or selling it right away). We'll coach you on that.

Expenses: Some Hard Money lenders or brokers charge fees up front. It can range from zero to $30,000 depending on the scenario. Other costs may be at closing as high as 20% of the loan amount (it's actually illegal to charge more than 8% of the loan amount). The title company will also have fees at closing. You may also have to pay for an appraisal. Hard Money loans lets you choose the appraisal. Some companies allow the Realtor to assess the value.

Some differences in Conventional (Con) vs Hard Money (HM)

Con: Required to have: Score, income, proof of assets, Citizen/green card/Work Visa.
HM: No score required, no income, no proof of assets, No citizen etc required.

Con: Property condition needs to pass underwriting guidelines
HM: No guidelines to condition of property

Con: Lender can pursue you in case of default (all loans are recourse)
HM: Lender cannot pursue you in case of default if non recourse loan is chosen

Con: No adverse credit with foreclosure/bankruptcy in last 3 years
HM: Credit is irrelevant but may affect interest rate or down payment

Con: Up to 40 years amortization. No balloon of loan
HM: Up to 30 years amortization but balloons in 5 years or less

Con: Low interest rates, no prepay penalties, no unreasonable up front costs, low cost closings
HM: High interest rates, possible prepay penalties, unreasonable up front costs, high cost closings

Con: As little as zero down (USDA), closes in 21 or more days (due to refinance boom)
HM: As little as no money down, closes in 10 days or more (zero down takes 30 days to close)

Con: Loan closes in your name with social security number
HM: Loan can close in business name with Tax ID or in own name with Social number

Con: Min loan around $40,000 but most bank min is $60,000. Max is $5,000,000.
HM: No minimum (but higher rate) and no maximum

Con: Real Estate Financing
HM: Financing available for just about any product

Con Commercial is very difficult to obtain with all the requirements, but rate is much lower
HM Commercial is very easy to obtain with less requirements but rate is higher
0 votes Thank Flag Link Mon Dec 24, 2012
Hi Andy,
All traditional mortgages (i.e. FHA, VA, USDA and Fannie Mae/Freddie Mac for Conventional) are going to require certain citizenship status. You must be either a US Citizen, a Permanent Resident Alien, or a Non-Resident Alien. A Non-Resident Alien will require only certain Visa statuses and additional requirements.

You must have a verified 24 month employment history with 2 years of US filed Federal Income tax returns. A US credit history is also required. Anyone not meeting these definitions would likely be considered a Foreign National.

Foreign National lending is not currently readily available. Very few lenders offer such a program. Right now, the Foreign National financing that is available is generally only for higher loan amounts and for Second Homes and not Investment Properties.

Regards,
Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
rodney.mason@prospectmtg.com
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia with over a decade of lending experience.

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing.
0 votes Thank Flag Link Mon Dec 24, 2012
If you are planning to purchase properties with cash, there are no restrictions. You will need to show valid i.d. at closing that your title company or closing attorney will specify in detail.

If you are planning to obtain mortgage financing, you must meet the following guidelines:

Permanent US Resident: You must have a valid social security number and a permanent resident alien card.

Non-Permanent: A passport and Visa evidencing that you have legal entry into the US for temporary residence.

Resident: Acceptable visas not limited to E series, G series, H-1B, H-1C, L-1, P-1, R-1, TN, V series AND a valid social security number.

Foreign Nationals: Not allowed.

Happy Holidays,

Morgan Campbell, Mortgage Banker
NMLS#957183
Envoy Mortgage, LTD.
229-563-5903

Apply online at ValdostaMortgages.com
0 votes Thank Flag Link Mon Dec 24, 2012
There aren't any specific tax challenges for investors. Your challenge will be obtaining financing. I work with many foreign investors, if you have any further questions please feel free to contact me or visit my website at http://www.georgialeasepm.com
0 votes Thank Flag Link Sun Dec 23, 2012
Bruce is the man.

Properties are not "cheap" but many have tremendous value for their price - it's all in how you work it.

Now, the $10.00 pending sale in Grove Park - that's cheap - see the web reference...

I have a 24 page "Foreign investors, real estate and taking title in Georgia" document that I'll email you if you want it.

I specialize in Intown Atlanta and Decatur - if you want to buy close to the city center, where demand and density are increasing yearly, call me.
0 votes Thank Flag Link Sun Dec 23, 2012
Andy,

The primary challenge is finding a qualified broker to locate, renovate and manage your property. There are many people offering turnkey investments. What that means is they buy something for 15K spend 10K fixing it and sell it to you at 75K but guarantee the rents for the first year and offer below market management fees. Stay away from these people.

I represent over 50 overseas investors. They purchase the property, pay for renovations. I handle the renovation, leasing and management for reasonable fees and when the property sells at a profit, I share in the profit. If there is no profit to the investor, there is no profit for me. This assures the investor only the best properties are purchased, and they are leased and managed to maximize the investor's return.

There are many models out there, finding a trustworthy representative and a model that makes money is the primary challenge. There is no attractive financing for investors that do not have residency status or US citizenship.


Bruce Ailion,
RE/MAX Greater Atlanta
An Atlanta Real Estate Expert Serving Clients Since 1979
RE/MAX Hall of Fame – REALTOR Phoenix Award
CRS, CRB, ABR, MSRE, CDPE, CIAS, e-PRO, ESQ
Certified Residential Specialist
Certified Real Estate Broker
Accredited Buyers Agent
MS Real Estate and Urban Affairs
Certified Distressed Property Expert
Certified Investor Agent Specialist
Certified Internet Professional
203K Certified Specialist
Attorney
2050 Roswell Road
Marietta GA 30062
404-978-2281 Direct
404-386-3682 Assistant Robin
678-760-6266 Buyer’s Agent Adam
770-973-9700 Office
bruce@locationlocationlocation.com
http://www.LocationLocationLocation.com
0 votes Thank Flag Link Sun Dec 23, 2012
Any taxes for non-residents/ non-citizens are set by the municipality or county in which the property is located. These taxes are applicable when the property is sold by you.
0 votes Thank Flag Link Sun Dec 23, 2012
There are no special challenges for a foreign investor to buy a property. Prices are so cheap today as many US buyers are still uncertain about the 3 year housing rebound. If you're looking to get a loan to buy a property, that would be extremely difficult to get from a US lender. You may have to go get private financing for 40-50% of the price and pay 10-12% interest. It's just easier to pay all cash, especially when the homes are so cheap.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Sun Dec 23, 2012
Hi Michael, tx for your info..will come back to you for others questions if there is..many tx
Flag Sun Dec 23, 2012
Hi Michael, tx for replying..another questions is how about tax? im looking at Atlanta area..
Flag Sun Dec 23, 2012
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