US Buying in Texas

I have a person there who can do everything, but that still needs a power of attorney. She is my closest relative and I can trust her like myself.

 

When I was a young boy my father sat me down and said "son, don't trust anyone, no one, not even me".

Saying that - I loaned my brother $50k to get through a settlement the other day.

Why don't you buy in the persons name who is a citizen?

 

I'm considering this. Will I get any benefits out of buying it in the name of a citizen compared to buying it in my own name? Is there any tax involved in passing the property from one relative to another in the States or if someone dies? I know that citizens can get a lower interest rate on LOC in the States compared to foreign investors, but I don't use the banks anyway, so no concern there.
By the way, thanks for your help.

 

Great timing. Austin's a great place... I'm very bullish on it.

 

So true lol I helped a dearest friend a few weeks ago as well. 38K

 

I believe as a foreigner you can buy one property in this State using US banks (believe considered a holiday home), interest may be around 3%? and as long as financials stack up ie service debt you may be able to borrow.
If you can source US finance then do it, alternatively the US citizen secure US finance, the rates are much lower. I have not done this myself but what I have heard from some investors so do your own DD.

 

I will purchase it using cash (I never borrow). The only thing I'm interested now is to know, is there a difference between purchasing it in my name or a US citizen (tax, legal, passing it to other relatives and so on). Countries are different and unfortunately I don't know much about US. That's the mystery I want to solve.

 

Agree with Wogitalia. However, if no income is generated on your US property, I don't believe you need to file a US tax return. You should check and do your own due diligence.

 

Hmm.....that isn't my experience. We purchased in a rental property prior to moving to San Antonio. Like you, we were cash buyers. We were able to complete the transaction totally online, with a few phone calls to make sure we understood the process. There is no need to hand over power of attorney.

 

Austin is awesome.......though traffic sucks big time. Hubby and I drive up as often as we can. It's just over an hour away from where we live in San Antonio.

 

NOOOOOO. Don't do it. If you are a cash buyer, you don't have to be there to complete the transaction. You can complete the transaction completely online, through e-signature, etc. There is no reason for you to hand over power of attorney.........or to buy in someone else's name. I'm sorry if I offend but that's crazy.

 

There are some amazing markets at the moment in US, many States/cities are booming at the moment. Its not too late if you have cash or have the right network in place

 

That's interesting. It sure looks different to what I have been informed of.

 

ew to unfortunate family circumstances I would need to purchase a property in USA (Texas) ASAP for my relatives, but preferably in my name. As an Australian citizen what pitfalls should I look at during the process?
I'm not planning to go there myself. I have a few questions to those who purchased in the States before.
1. Can I give my relative the power of attorney to purchase it without me flying there?
2. The property will not be rented out, at least not now - (do I need to hire a US based accountant, or I can do cash returns in US myself)?
3. I'm not planning to live in US - will I be a tax resident as a property owner there?
4. What taxes I might face except property tax after purchase as long as I'm not an American citizen?
5. Is it better to purchase it in my relatives name (a citizen by birth and lives permanently there) or it doesn't matter from taxation stand point?
6. I know you some of you have used a trust structure for your purchases, is there any advantages of this form of investing in US (in my case it's only 1 property)?

Hi Barnes ,
1)I initially purchased in my name no problem and did so over the net without any dramas.
To be safer though later i gave someone (an attorney whom i built relationship and trust with) my POA for future purchases in an LLC i set up.You can give power of attorney easily without going there but i wouldnt recomend it.

2,3 &4)you could do the tax returens yrself via the US system ,then you use that return in australia to claim a deduction or show profit here in OZ.(note: we have a double tax agreement with the USA)
5) i personally would buy in an LLC due to liability reasons as there is alot of suing encouraged in the USA
6) not that i am aware of but defiantely talk to your accountant
My experience in the realestate industry in the USA is there is alot of people telling you what you want to hear but when it comes down to it -often I wished they were just honest in the first place -so just use caution all the way through as you deal there but there are also some good trustworthy people too of course..

 

Thanks Luke for your help. Doesn't your landlord insurance cover suing abilities in US?

 

Yes but like in Oz if they can get you for something that is "landlords fault"(eg worn stairs or incorrect railing heights or whatever)the insurance may try get out of paying the claim adn landlords can be made responsible .
I have heard of a blanket cover insurance policy to cover this in the us but i didnt take it ,instead i used an LLC and tried to keep the properties managed well and maintained .

 

I buy it not for investing purposes, so after I will not need it I'll probably sell it or leave it empty. I don't like tenants.

 

Hi OiT
The bank will look at the security, what I have found is its dependent on which market (State) as well as the property. For example if the property is a C grade property in a bad area then it probably wont happen even with hard money lenders.
From my experience its a catch 22 with banks in US you need a credit score in US hard to do if you are not living in US etc or US citizen.
I assume as you live and work in US your scenario may be totally different from foreign investors.



MTR

 

You never claim on insurance unless the house burns down because you will probably find it almost impossible to insure again.

Been in US market since 2011, never claimed.

Landlord insurance is non existent.

Building insurance is very expensive but you still require this just in case.

Its a totally different beast to what we have here in Australia.

 

All my properties in US are in LLCs (3 properties per 1 LLC) owned by my Trust, this is what my lawyer recommended and so far so good.

Buying in US is a pot of gold as property markets are going from strength to strength at the moment. I have not seen a slow down as there is just so much demand and so many strategies that can work.

MTR