Guiderei.com
Real Estate Investing Services
USA

(Translated using Yahoo Babel Fish)

Updated: October  2008

In order to understand the challenges for getting US mortgages for foreigners we need to explain how the USA mortgage system works. Skip this section if you like to see view your options.

Basic understanding

1. SSN – Social Security Number. SSN is not just a US ID assign to every citizen and legal resident. One of its main functions is to gather and hold financial information about the individual. Institutions, such as banks and credit cards companies, regularly report to three main credit bureaus on each and every SSN.  Each credit bureau computes the reporting data and assigns a score to the SSN. The score is based on how many loans one has, how many credit cards, payment history, and other parameters. Not all parameters are known to the public. The score reflects one’s financial strength. The higher the score the better your terms would be. Meaning, a higher score will provide you with a lower interest rate on a loan. A higher score will determine how much information one will need to provide when applying for a loan. There is no doubt the SNN is a fundamental block in ones financial life.
2. Foreign investor: someone who doesn’t have a SSN or doesn’t file taxes in the US. Lending institutions don’t have a way to verify, in the US, financial information about such person.
3. Lack of SSN. Until the 2007-2008 credit crisis lenders agreed to accept financial statements from non-US based financial institutions. Nowadays they no longer accept it. This creates a greater challenge for the foreign investor.
4. Possible Opportunities: Between 2003-2007 many US real estate markets have seen a significant growth in prices. Places such as Las Vegas, Phoenix, Orlando, Miami, Washington DC, to name a few.  Many buyers, owners and investors, purchased around the peak (2006-2007). During those years lenders were both lose and aggressive with their lending standards. Loans to unqualified borrowers where given left and right. When interest rate started raising many borrowers could not make their payments – that was the beginning of the bust.
5. distress seller:
1. Foreclosure
2. Short-Sale
3. REO
6. US Mortgage Uniqueness. Unlike most countries most USA mortgages are fixed for life. This means both principal and interest are not indexed to the cost of living. It means principal payments are actually eroded vs. the increasing cost of living (inflation).

Solutions for The Foreign Investor

1. Buy cash
2. Buy cash and then refinance at your on time
3. Buy with large down payment (if applicable)
4. Buy with a partner
5. Join a group purchase

Safe Purchasing

1. Use the internet for your due-diligence
2. Use a title insurance company to make sure you buy with a clear title
3. Call a local realtor and ask questions
4. Call a local property manager and ask questions
5. Use a USA based real estate investment company
6.  

Safe Holding

1. Use a local property management company

Purchase Process

1. Preparation:
   1. Open bank account
   2. Apply for TAX ID
   3. Transfer funds
2. Buying a Property:
   1. Identify Market
   2. Determine financing: cash investments or use of mortgage
   3. Set budget
   4. Identify area with the market
   5. Identify property/ies
   6. Conduct due-diligence
   7. Decide on a property
   8. Sign contract
   9. Apply for a loan (if applicable)
   10. Prepare for closing
   11.  Sign contact with property manager
   12. Close on property
   13. Miscellaneous post closing action  
3. After Closings
   1. Property manager will advertise and lease the property
   2. Leasing fee equal to approximately one month rent will be charged
4. Ongoing
   1. On a monthly basis property manager collects rent, cut out his commission and send the owner the rent
   2. Owner responsibility to pay expenses: property taxes, home owners associations, insurance, mortgage
5. Annual Actions
   1. File tax returns

About Us

We are experienced real estate investors who in the past eight years have invested in many markets across the USA, places such as San Antonio, Orlando, Dallas, Oklahoma City, Phoenix, and other areas. In the past five years we have helped many investor to invest in real estate through the different markets across the USA. We have worked with beginners, experienced and seasoned investors.

A large portion of the investors we worked with are either foreign investors or individuals that are new to the USA.

We understand the challenges facing any one who wants to benefit from the USA real estate market and its current market conditions and opportunities.

We Can Help - Services

1. Consultation: where to buy, how to go about buying,
2. Research: due-diligence assistance
3. Identify investments – we have investments to offer you
4. Be part of our investment group
5. Get referral to: realtors, property managers, certified public accountant (CPA), attorneys, etc.
6. Investment assistance and support
7. Portfolio management: accounting, reports, assistance with filing taxes, and more

Terminology ( by wikipedia)

Refinances

Title

Title Insurance

SSN

Tax Identification Number