The United States of America is one of the best places for a foreign national to invest in real estate. The government is stable, taxes are relatively low, and there are legal protections in place to protect buyers from being taken advantage of by sellers. Follow the steps below to improve your chances of making a profitable investment in real estate in the USA:
Step 1: Consult an accountant or tax lawyer
Owning real estate in the USA has the potential to create tax liabilities for foreign investors. Local, state and federal (national) governments all impose different kinds of taxes on property owners. Before buying property in the USA, you should consult an expert on American taxes and on taxes in your own country to make sure you understand the relevant laws.
Step 2: Select one part of the USA to invest in
The USA is a large country. There is no national real estate market. Instead, each city or region has its own market, with prices rising or falling based on local factors, including employment, availability of credit, and quality of local services and amenities, among others. You should choose one area to invest in, in order to make managing your property easier. If possible, select an area that is easy for you to travel to, since you will probably want to visit your investments at least once per year to ensure that your managers are doing a good job.
Step 3: Select the type of real estate to buy
Real estate assets are divided into residential (single family homes and small apartment buildings between two and four units), multifamily / large apartment buildings, retail, office, industrial and raw land. Each of these types of assets has its own advantages and disadvantages. In general, residential real estate is the safest asset class for new investors, since the government has put in place many regulations to ensure that buyers of homes are not cheated by sellers. Buyers of other types of real estate do not receive the same type of protection.
Step 4: Select a real estate agent to assist you
You will need a real estate agent to assist you in purchasing properties in the USA. Fortunately for you, in most parts of the country, the agent representing the buyer is paid by the agent representing the seller, so working with an agent will not cost you money. You should select an agent who has experience with the type of asset you want to buy in the area in which you want to buy. To find a reliable agent, contact the National Association of Realtors, an organization which only includes honest, reputable agents.
Step 5: Select a management company
As a non-resident owner, you will need a management company to manage any properties you purchase. Your manager will lease your property, collect the rent, and make any necessary repairs. As with selecting your agent, it is very important to choose a management company with experience managing the kind of assets you are buying. A company that specializes in office buildings will most likely not know how to manage a portfolio of single family homes. Ask your agent to recommend some management companies to you. Contact them and ask them to submit a proposal for how they would manage your property. Make sure to ask for and check references from other property owners with whom they work.
Step 6: Make offers
Once you have an agent and a good management company, you are ready to begin making offers. You may have to make offers on many properties before you find one that you like at a reasonable price. Do not allow your emotions to overtake your rational mind. Understand in advance what you are willing to pay and be ready to walk away if the seller is not willing to take your price. Don't worry--you will eventually find the deal or deals you are seeking!
Wednesday, April 14, 2010
Monday, April 12, 2010
Tips for Buying Foreclosured Properties
Buying foreclosed properties can be extraordinarily profitable for smart investors. However, there are some "rules of the road" that you need to obey in order to maximize your chances of making money. Here they are:
1. Find your own properties to buy.
Too many investors rely on real estate brokers to find them properties to buy. Ever wonder where agents get their listings? They contact bank asset managers who are in charge of getting the banks' properties sold. You can get in touch with the asset managers yourself and cut out the middle man by getting your hands on this list.
2. Do not rely on the bank for information.
Foreclosed properties are owned by banks, not people. As such, the law usually doesn't require the banks to disclose problems with the property to a new buyer. You get a great price, but you need to do all your own research. Do not rely on what the bank or its broker tells you - do your own homework.
3. Make sure you're actually getting a good price.
Whether through stupidity or greed, some brokers who work for banks price their properties incorrectly. Do not assume that, because a property is owned by a bank, it is a good deal. You need to compare the price to prices of other, similar properties in the area to ensure that you aren't taken to the cleaners by the bank's broker.
4. Hire a professional inspector.
Unless you are a very experienced contractor or handiman, you absolutely must hire a professional inspector to come with you to inspect the property before you buy. Anyone can spot an old bathroom or a lack of closets. But it usually takes an expert to detect foundation, roof, plumbing and electrical problems. Unfortunately, these are usually the most expensive problems to fix! So make sure you have someone along who really knows what to look for.
5. Meet any tenants.
The second you close on a property, the bank's tenants become your tenants. You want to meet them before you risk serious capital buying the building they live in. You want to know if they are reasonable, respectful people who will take care of your property. If they're not, you want to know if you will be able to get rid of them quickly and cheaply. If not, move on to the next property - it's not worth your time.
6. Get a lawyer to check the title.
Foreclosures can be very messy legal proceedings. As an investor, you want to be sure that you are buying clean, clear title to the properties you are investing in. Otherwise, you will have serious problems when you go to sell. The only way to be sure that title is ok is to have an experienced real estate lawyer review the preliminary title report generated for you by the title insurance company handling the transaction. It may seem like a big cost, but hiring a lawyer can help you avoid losing massive amounts of money buying unmarketable title to foreclosed properties.
With these tips in mind, you ought to be able to avoid the worst problems associated with buying foreclosed properties.
1. Find your own properties to buy.
Too many investors rely on real estate brokers to find them properties to buy. Ever wonder where agents get their listings? They contact bank asset managers who are in charge of getting the banks' properties sold. You can get in touch with the asset managers yourself and cut out the middle man by getting your hands on this list.
2. Do not rely on the bank for information.
Foreclosed properties are owned by banks, not people. As such, the law usually doesn't require the banks to disclose problems with the property to a new buyer. You get a great price, but you need to do all your own research. Do not rely on what the bank or its broker tells you - do your own homework.
3. Make sure you're actually getting a good price.
Whether through stupidity or greed, some brokers who work for banks price their properties incorrectly. Do not assume that, because a property is owned by a bank, it is a good deal. You need to compare the price to prices of other, similar properties in the area to ensure that you aren't taken to the cleaners by the bank's broker.
4. Hire a professional inspector.
Unless you are a very experienced contractor or handiman, you absolutely must hire a professional inspector to come with you to inspect the property before you buy. Anyone can spot an old bathroom or a lack of closets. But it usually takes an expert to detect foundation, roof, plumbing and electrical problems. Unfortunately, these are usually the most expensive problems to fix! So make sure you have someone along who really knows what to look for.
5. Meet any tenants.
The second you close on a property, the bank's tenants become your tenants. You want to meet them before you risk serious capital buying the building they live in. You want to know if they are reasonable, respectful people who will take care of your property. If they're not, you want to know if you will be able to get rid of them quickly and cheaply. If not, move on to the next property - it's not worth your time.
6. Get a lawyer to check the title.
Foreclosures can be very messy legal proceedings. As an investor, you want to be sure that you are buying clean, clear title to the properties you are investing in. Otherwise, you will have serious problems when you go to sell. The only way to be sure that title is ok is to have an experienced real estate lawyer review the preliminary title report generated for you by the title insurance company handling the transaction. It may seem like a big cost, but hiring a lawyer can help you avoid losing massive amounts of money buying unmarketable title to foreclosed properties.
With these tips in mind, you ought to be able to avoid the worst problems associated with buying foreclosed properties.
Sunday, April 11, 2010
Buy Foreclosures with Other Peoples' Money
Over the next few years, millions of homes in the United States will be foreclosed on by banks. This is very sad for the owners. It's also the greatest buying opportunity in the history of American real estate.
Millions of homes are changing hands at very low prices, sometimes for as little as $10-15,000. Many times, you don't even need to renovate or remodel the homes to make a profit. Just buying them cheap and then holding on to them until prices rise is sometimes enough.
Some savvy investors have bought a foreclosure / REO property or two recently. But maximizing profits means buying as many of these properties as possible. And that takes using other peoples' money.
My good friend Adam Davis has been making money buying foreclosures since the crisis began. He's doing it in Detroit, which is just about the hardest place to make money in real estate in the country.
Adam has pulled together his strategies for doing foreclosure deals with other peoples' money. If this is the kind of opportunity that interests you, I'd suggest checking out his course: Adam's course
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Millions of homes are changing hands at very low prices, sometimes for as little as $10-15,000. Many times, you don't even need to renovate or remodel the homes to make a profit. Just buying them cheap and then holding on to them until prices rise is sometimes enough.
Some savvy investors have bought a foreclosure / REO property or two recently. But maximizing profits means buying as many of these properties as possible. And that takes using other peoples' money.
My good friend Adam Davis has been making money buying foreclosures since the crisis began. He's doing it in Detroit, which is just about the hardest place to make money in real estate in the country.
Adam has pulled together his strategies for doing foreclosure deals with other peoples' money. If this is the kind of opportunity that interests you, I'd suggest checking out his course: Adam's course
Bookmark & Share
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