Discussion for property investing in the US

Hello all

I couldn't find a thread on this topic. Has anyone invested in the US before? HSBC has just approved a mortgage to be used & I would like to look into this topic.

 

Would like to hear more about your HSBC loan you got. What lvr, interest rate, duration etc?

I enquired through Lima One and they were happy to fund me as a non american. Obviously the above metrics are a bit higher for us 'aliens'.

 

Hello, I only received a phone call from HSBC Premier in San Fran this morning and noted that they approved the amount of (70% of 350k). In my email exchange with HSBC, I suggested that I wasn't sure about the property that I was going to purchase. So what I did was I looked up a small town house in Philly. That costed US$ 350k. My co worker recently bought one at that price. I told them that the house might be a lot higher depending on the location. They were fine with that as long as it is not a new project (as Hsbc won't approve any loan on new project) but I need to submit another form with some sort of local council's certification (?). Hsbc said that as an alien (non resident), the initial deposit required is 30%. So I won't be submitting that loan application form until I have done the DD in Philly after Feb.

Tax is really a concern for me as it drives down the expected yield %.

Tim

 

Get an ITIN first, that'll save you a bunch on tax as it means the PM doesn't have to withhold a percentage.

70% LVR sounds great!

Phily sounds great too. I think its going places. Atlanta has been going for too long, dont think there's any steam left in it. If you read the biggerpockets forums, a lot are looking at phily or midwest cities. Some of these have massive employment hubs.

 

Go for search on Somersoft, there's a 700 -odd post sort of like this 20 US properties in 4 1/2 years

 

@tc8


Other markets to look at it

Chicago
Detroit
Las Vegas
Jacksonville
Pittsburg
Few places in Ohio



It really Depends on your strategy and what/where bank is willing to lend you!

For us - it's manufacturing growth strategy. Hard work but pays off $$$$$ if played it correctly.

 

In order to obtain ITIN - one needs to file IRS return or have substantial reason to apply one (few pre requisite)

Not easy obtaining ITIN for first financial year!

If setup correctly - PM won't be able to hold withhold tax - PM will disburse rent - Benficiery LLC will have to file tax return when its due (end of dec) and finalise tax liabilities with IRS.

 

Tim

I have started a thread on my experience in Atlanta, started buying in 2011/12 now holding 13 properties in Atlanta. If interested do a search and my houses are also on media to view photos

US is a blast, property markets are going nuts, I am loving it



MTR

 

Hi tc8, noticed you're in based out of hong kong as well

Wondering if HSBC USA is able to say whether or not it affects your credit score in HK?

 

thanks everyone - looks like i have lots of reading to do. one question - i will be working in NYC for a week soon - what do you guys think about the studio/ one bedder apartment there? my Aussie friend (with very good employment income in Australia) applied mortgage thru Wells Fargo in the US, and the application was denied early this week (not sure why though). i actually did everything thru HSBC in Hong Kong...

Tim

 

let me send an email to my bank manager and get back to you

 

do you currently own a house in HK? wondering if that might be one of the reasons if the ultimate lender is from HSBC HK for your US property? the loan I assume is in USD? what rate?

thanks, similar to you I also occasionally go to NY (in fact I have plans in the long run to be based there) so naturally looking at possible property when the time's right (remember 3 rate hikes are being priced in the market right now)

sorry for all the questions!

 

I don't own any property in Hong Kong...but have little bit of cash in Hong kong and australia, and some in Hang Seng bank. I guess Hsbc view my employment income and total cash balances and make that call. How things are different with my Aussie friend who has an Australian property but was denied by Wells Fargo.

I'm sorting out my personal residency issue with HSBC (asking if there is any difference if I were to apply the mortgage using my Aussie or HK residency). I'm not a tax resident for Aussie tax purpose. I'm also asking them if I can put the property under a LLC. So I won't be able to find out anything until they have formally given me a go signal. Yes the loan would be in USD. I didn't ask about the exchange rate as hkd is pegged anyway.

Living in NYC for good would be my dream (or Paris for that matter) but a very expensive one.

When I retire, I plan to stay in a few locations if possible (staying agood few months here and there). It might make the most tax sense if I just maintain as a hk tax resident in the long run and leave the cash concentrated in a Hong Kong bank account. This is the topic I will have to research some more. My mates and I were discussing this topic last week but I haven't thought through this one yet. He is a hk tax resident but thinking of moving somewhere (most probably NZ).

Tim

 

yeah im thinking this is the key here - using a local US bank with overseas based income

as opposed to HSBC - using HSBC HK relationship with HK based income for a USD mortgage; question remains is whether it would affect my HK credit score.... did your bank manager get back to you?

 

common sense would tell me to use your HK residency

 

Spoke to her this morning. She said it won't, But this comes from someone based in Sf. I'm still very uncertain. Guess will have to see if this loan will appear on my credit report.

Got also another answer to my earlier question re LLC vs individual, she said Hsbc won't lend me if the Property is owned by an LLC

 

Care to explain why? She asked me to use my Aussie passport since I don't have any hk passport (only have a hk ID card). Mind you that There is no tax treaty between hk & the US, so thereisnt any treaty captial gain protection. Tough call since I am only paying HK taxes.

 

Heard this one before, also another lender won't lend to LLC if member is a trust, needs to be individual
About risk I assume

 

thanks tc8 - that is what I thought since you're dealing directly with HSBC in San Fran

I guess if you have an aussie passport you cannot use your HKID for the US mortgage since HKID is not a form of proof of nationality (you'd imagine US would have super strict AML laws to prevent you from not using a passport and borrowing money!).

Yes I think it is more about tax treaties and effective tax rates (e.g. hk 17% vs aus) .. and also what happens if you decide to move back to aus in the future.

 

Does having an ITIN cause you to be a tax resident for US tax purpose?