Any company can provide LLC formation and bank account opening services for foreigner(non-us resident)? Which I would like use for investment property

Asked by Daishu, Phoenix, AZ Sat May 7, 2011

Hi All, I'm a foreigner(non-us resident), and would like to buy investment property near Phoenix AZ. As my understanding for tax purpose, I'd better establish a LLC and open a bank account under the LLC, is there any company/consultant can provide such kind of services? As I know, the key problem for me is I have no local permanent address for registering and a LLC member with SSN which are pre-requisites for LLC formation and bank account opening.

Please advise.

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13
Fred Shocklie, Agent, Peoria, AZ
Mon May 9, 2011
You have certainly received a lot of information and I am totally surprised that Keyt Law was not recommended to you for an LLC formation. Here is the website. http://www.keytlaw.com/

You will see that there is tons and tons of legal information for an investor specifically investing in Arizona. I have used this firm myself and received very comprehensive information. I think he has the most comprehensive website out there. And more importantly, he is geared to working over internet.

If you are looking for an agent that works with investors as well as internationally, please contact me. I also have designed my business to work over long distances. I also can refer you to an excellent property manager.
Web Reference:  http://www.morechoices.net/
1 vote
Christy Walk…, Agent, Phoenix, AZ
Mon May 9, 2011
Section 8 can be a good way to guarantee rents, althought it doesn't work for all investment strategies. Hiring a good property manager that highly qualifies your tenants can provide a similar security but allow you to have more selection when looking at properties. It's also possible to purchase properties that already have tenants established, which can help lower your out of pocket costs and reduce the probability of vacancy sine you know the tenants were willing to stick with the property despite the change in ownership.

I've worked with section 8 homes for about 8 years and our property management advertises applicable properties on their site, althought I've never personally rented any of mine that way. If you work with a great buyers agent (preferrably an Accredited Buyer's Agent) they can assist you with looking at all your options and choosing the best fit to reach your goals.
1 vote
Jason Webb, Agent, Glendale, AZ
Mon May 9, 2011
Daishu,

There are pros and cons to section 8. I personally never have done any section 8 on my own rental homes. I have managed some section 8 homes. I find that I usually have my homes rented long before the home could be approved for section 8. Right now the rental market is very strong and it is relatively easy to find tenants for clean well maintained homes that are listed at a fair rental rate.

If you are not here to view and inspect homes, you will need to establish a relationship with an agent who you can trust. You want to be sure that they are looking out for your best interests. If you have friends or family that have bought homes in the Phoenix area, ask for a referral to their agent if they were happy with the service. If not, interview a few agents to see if you can find someone who you feel comfortable with.

As Loren pointed out, you will need to have a local agent to represent you on the rental home. Maricopa county (most of greater Phoenix) requires rental properties be registered with a local contact (this is separate of LLC agent). This is usually your property manager. Therefore you should have a property manager lined up before renting. They can look after the whole leasing process.

Many property managers can also represent you on the purchase of a home. They will also be a good source of information on rental markets while searching homes. Most buyer agents will also have relationships with property managers or their firms often have a management division.
1 vote
Loren Hoboy, Agent, Phoenix, AZ
Mon May 9, 2011
Daishu,

I am going to join in on this conversation.

First, how you decide to hold title varies based on your situation. The answere varies based on your specific circumstances. You will find discussion on LLC and other ways to hold title at http://www.arizona-dream-homes.com/ArizonaCanadianHomeBuyers.html along with the steps to ownership. If you decide to form an LLC, you will need to select a "resident agent". There are companies that provide this service for about $100/yr. Your choice of forming an LLC or holding the property in your own name is often a question of the tax impact in your local country as much as the tax effect in the US.

As you note, Arizona law requires a local contact be provided for the tenant to call should they have problems. Corporate resident agents will meet the LLC requirements, but are probably not the right choice for a local address for a tenant to contact the landlord when his hot water heater springs a leak. Since you are planning to be a landlord from a great distance and want to consider becoming approved fro section 8 housing, I would suggest that you hire a qualified Property Manager. This give you the local contact address you need (with or without formning an LLC) and a way to serve your tenant's needs.

Your selection of a Buyer's agent is also critical. Here in Arizona a Buyer's agent represents your best interests , not that of the seller. Select one that is experienced working with foreign investors that will guide you through the process. Then pick a property manager that will serve you well and help you maximize your return on investment.
1 vote
Christy Walk…, Agent, Phoenix, AZ
Sun May 8, 2011
I'm sorry I wasn't clear in my response. Jason was correct in my assumption about using an LLC with financing. I often work with investors who prefer to leverage their investments and financing provides that opportunity. An LLC that has not been established to show credit and income can not "qualify" for a loan. However, an LLC absolutely can purchase in cash.

I personally own an LLC for my own investment properties and believe they can provide value in many ways. However, for many investors we don't recommend an LLC if they intent to purchase only one property. My suggestion that you speak with an attorney and CPA was simply to help you define your strategy first before following the advice of someone who may not understand your goals since I don't belive LLC's are the best fit for everyone.
1 vote
Shannon Cunn…, Agent, Goodyear, AZ
Sun May 8, 2011
Hello Daishu -
We work with a great amount of investors, such as yourself and work to help with the process on a regular basis. We have a few cross-border accountants that we specifically work with for our Canadian buyers, so please contact me if you would like those contact specifically. Locally, Phil Salmon with Affordable LLC filings does a great job for our clients. His contact number is 480-225-2979. When you file for an LLC, you will be issued an EIN number, which should suffice for all purposes in terms of investing, property management requirements, etc.
You can open a US Bank Account in your personal name without having the LLC first, if you choose. This is a great idea to have the account if you plan to do any investing here, especially if the goal is to rent the properties. Most Property Managers (our firm included) require a U.S. based bank account in order to direct deposit your rental income each month.

If you would like any more information or assistance with acquiring properties or Property Management, please feel free to contact us, as we are happy to help!


Shannon Cunningham Smith
AZ PERFORMANCE REALTY TEAM
Keller Williams Professional Partners
p:602.330.3025
f:602.325.2297
Shannon@azperformancerealty.com
http://www.azperformancerealty.com
1 vote
Jason Webb, Agent, Glendale, AZ
Sun May 8, 2011
Hi Daishu,

Christy might have thought you wanted to use financing in your purchase. If you are buying all cash, LLC is not an issue.

For tax planning, it will depend on where you are from and tax treaties that your country may have with the U.S. There may or may not be a tax advantage. However, a LLC will probably provide extra liability protection. I would suggest you contact a tax accountant in both in your country and in the U.S. Check out http://www.keatsconnelly.com/ as they specialize in cross board taxes (mainly between U.S. and Canada).

FYI, foreign investors may also be subject to a tax withholding of 30% of gross rent. More information can be found at http://www.irs.gov/businesses/small/international/article/0,… . Also check out http://www.irs.gov/businesses/small/international/article/0,… .
1 vote
Daishu, Home Buyer, Phoenix, AZ
Sun May 8, 2011
Hi All, thanks for your warm-hearted answers and I would like to ask another question before action.

For a foreigner, most of the operations will be performed remotely. And it's hard for me to inspect properties before buying, monitoring rental status and maintaining it, so I'd better start with buying properties which can be leased under section8 and pass it to property management , which will assure the rentals from government though it may not profitable as other properties. Am I correct? And any company can provide this kind of properties for investors?

Please advise.
0 votes
John Baldovin, Agent, Avondale, AZ
Sun May 8, 2011
Call Jim Bates,he is a CPA and has a Tax service, he can give you advise and help set up a corpoation his number is 602-5470520
0 votes
Daishu, Home Buyer, Phoenix, AZ
Sun May 8, 2011
Chisty, I'm not quite understanding your words "but the LLC cannot be used to make the purchase without operating as a company that provides proof of credit and income through tax returns", since I know someone in my country already bought properties and operate under LLC and related bank account, though it's very simple for receiving rentals only.
0 votes
Christy Walk…, Agent, Phoenix, AZ
Sat May 7, 2011
It would be best to speak to an attorney for making these decisions. I have family from Canada who have purchased property here and found having an LLC did not benefit them so it would be best to research this before spending the time and money to establish one. If you establish an LLC you may transfer the property to it after the purchase but the LLC cannot be used to make the purchase without operating as a company that provides proof of credit and income through tax returns.

Once you have an LLC you may establish a statutory agent to act on your behalf and receive legal notifications. I would highly recommend establishing an SSN to build credit here in the US as it will eventually make purchasing much easier whether or not you choose to establish an LLC. I'd be happy to refer you to an accountant, attorney, foreign exchange company and other professionals that would be happy to assist you in your first foreign purchase.

Best wishes for success!
0 votes
Jason Rush, Other Pro, Phoenix, AZ
Sat May 7, 2011
Daishu, I do have contacts for establishing LLC, tax advise for foreign national property investors. Also a bank contact for establishing bank account for deposit of rent roll. We represent a number of foreign rental properties owners. Please feel free to contact me at your convenience.
Jason Rush
623.330.1513
Jrush@ONEprop.com
Web Reference:  http://www.ONEprop.com
0 votes
Carlos Ramir…, Agent, Mesa, AZ
Sat May 7, 2011
Daishu,

The hardest part is establishing your LLC, after it is formed you can go to any bank and open an account. Many places will offer you this services, but generally a good accountant will be able to do it for you and that will be your most affordable option. Althought if it gets too complicated you might want to use an attorney, which will most probably be more expensive. If you wish send me an email and I will provide with the contact information of some professionals who will be able to help you.


Carlos J. Ramírez, PC, ABR, CNE
RealtorCarlos@gmail.com
Associate Broker/Realtor, HomeSmart –
Certified Negotiation Expert (CNE)
http://www.SmartAZRealty.com
0 votes
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