4 financing routes for international buyers
NEW YORK – March 7, 2017 – Have you been wondering if foreign buyers of U.S. real estate could be your local real estate market niche?
Entrepreneur, investor and founder of RSN Property Group Reed Goossens found that to be the case after immigrating to the United States from Australia, by focusing on closing deals for international buyers.
One of the reasons Goossens has been so successful working with foreign buyers looking for real estate investments is that he personally went through the process of purchasing property in the U.S. as an Australian citizen.
Below are just a few of the useful snippets Goossens shared in his podcast interview, including information on how to guide international buyers through the purchasing process and some potential financing options available.
Regulations and taxes
Purchasing property in the U.S. isn't as easy for an international investor as it is for an American citizen.
Fortunately, if you're familiar with the relevant regulations, you can help these clients make the necessary preparations and improve your chances of closing sales.
Contacting a good CPA is the best way to get the ball rolling. A CPA can apply for an Individual Taxpayer Identification Number (ITIN) on behalf of your client and can also set up a Limited Liability Company (LLC).
Your client can then use the Employer Identification Number (EIN) associated with their LLC to open a bank account in the U.S.
Even once your client has an ITIN, an LLC, and a U.S.-based bank account, there's still an additional hurdle to overcome: transferring money from an international account to fund the purchase of a property.
For this, Goossens recommends using a company that handles foreign-exchange transactions.
However, keep in mind that these companies are required by law to scrutinize large foreign transfers into U.S. accounts. If your client already has an established LLC, they'll have a much easier time getting their transactions approved in a timely fashion.
4 financing options
In the event that your international buyer client doesn't intend to pay cash, there are four potential financing options that may be available: