Just a quick point to make here – I don't know exactly how your taxes would be affected as a non-American, but most foreign investors find it easier to buy using an LLC. Simple tasks such as connecting utilities and getting bank accounts opened up (unless you already have one) will be much easier with an LLC. You will need to obtain an ITIN number (personal tax ID) and an EIN number – company tax ID, but pretty much any incorporation agent or individual willing to spend some time can do so.

Liability – this can be minimized with the right policy even for an individual but an LLC can certainly help you.

Taxes – LLC's pass thru their income to the owners and the profits have to be declared on your 1040 – Individual return. As far as what I know, this tax is then offset against your Australian tax, but you need to pay US taxes on US income, although (in our experience) you can write off more expenses thru an LLC than as an individual.

State registration – Above posters are right in that a Florida LLC can own property in Nevada etc, they just need to register with each states Division of Corporation that austhorises them to do business in that state. This is a really simple process

Quit claims – Yes you can quit claim for a nominal fee from yourself to your LLC, or vice versa, as long as there is nothing in your mortgage that would prohibit that – but for a cash purchase, no problem.

[email protected]

I agree with Kevin's post above, that the E2 is probably the most suitable in a case like this.
Just be advised that the E2 visa does not have a path to permanent residency or U.S. Citizenship, and needs to be renewed, if I am correct, every 2-5 years. Once you sell your business, you need to leave the United States, no matter how long you have been in the country for. I know of a restaurant owner in Miami we used to do business with who came over on an E2 when he was 23, ran the restaurant until he was 54 when he sold it, and had to leave the country within 90 days. At that point – he had no other "home" to go to, as he considered himself American, but that's the law.

For those owning a business overseas – moving to the US using an L1 (transfer/exec) visa is a better option (my personal opinion, I am not a lawyer) as this one is supposedly a bit more straight forward, does not require a large investment, and can lead straight to a Green Card.

I suggest you follow Kev's advise and seek legal advise in this case, as US immigration is VERY complicated!

[email protected]

@ Nigel:
I don’t want to sound like a broken record here, but every single city in the U.S. will have many different markets, all with different characteristics. We operate nationwide and have done so for the last six years, and Michigan is one of the states where our investors have the most success. I can also personally assure you that none of the deals we sell (or enter into for ourselves) are in areas where “nobody lives” but in areas that are really no different from other areas in cities across the country.

@ Dan:
Yes Oakland County is great and a beautiful place to be, we’re actually considering moving up there in a while!
How many deals – well, we got into Michigan middle of last year, and it’s higher than 20 and less than 99

[email protected]

Dan,
Thanks a lot for your views – like you said, it makes a lot of sense when someone from the city itself comments on the post.
Fully agree on the negative coverage vs. what is actually going on, I’ve been to Detroit quite a few times and I’ve been positively surprised, both by the opportunities, but also by the pride that still exists of being from Detroit.

You mention Dearborn and surrounding areas, we have also invested (mainly in rehabs for quick resale) in areas like Oak Park and other more affordable parts of oakland County as I just see them as more of a “safe bet”, are you familiar with those markets also?

[email protected]

Hi Kimberley,

I think 6 weeks is certainly enough to get a feeling for what the markets are doing, and what properties are available.
Off course, you always need to do your due dilligence and make sure you are not paying too much – it’s important to look at comparable sales, rentals, and like James rightly pointed out – to decide what you really want to get out of it.

Just like James, we are an investment firm with 6 years experience just in the US markets (we previously did also US + international) and we always try to get the investors “profile” right. Basically if you want income, there’s one set of areas to look at.
If you primarily want growth, there are other areas. For a mix of both… well, another set again

I do applaud you for going out there to explore for yourself, let me know if we can assist – we are based in the U.S. but we also have a local office in Australia.

[email protected]

Hi Angel,
Just responded to your email – there’s plenty of things we can do in that department

Hi Angel,

I guess the first thing I’d need to point out – and I really don’t mean to sound patronising or like a smart ass – is that Buffalo, Syracuse, Rochester etc are VERY different from the New York most people know. You’re a good 6-7 hours away from Manhattan and New York City once you get up there, and the market is very different.
Even though the state has a large growth in population, this is mainly focused on the Metro area of New York City and the nearby counties of Westchester as well as Nassau and Suffolk counties on Long Island. Many people based in Upstate New York are leaving – or trying to leave – in the same fashion you hear about people leaving Michigan etc.
There are some jobs in the Albany area, due to this being the state Capital, and this area might not be bad although prices are higher.

To answer your question on crime – it’s pretty bad, but it’s certainly no worse than parts of Detroit, Newark, NJ, Philadelphia or any larger city with areas of poverty. I wouldn’t be so worried about this, but property crime can be an issue, although we didn’t have more (or less) problems in NY state than anywhere else.
In my opinion, the main thing we look for is capital income, and there are higher yields in many other areas, which also offers a better Section 8 program. In New York State, it’s not quite as generous as many other areas.

One of our focus areas is Indianapolis – it will have the Superbwl next year which has seen a large influx of Federal dollars to “clean up” many areas of the city, property is cheap (you get a good rental for around $30K) and there are still some good businesses located in Indy, as well as a lot of Government jobs, being the State Capital of Indiana.

I hate to sound like a broken record, but we are still quite active in areas of Detroit – I need to point out though, it’s just small sections where we’d buy, which is far from what you might see and hear in TV. The yields are always in excess of 14%, and like DetroitDan has said on some posts, you need to really know Detroit, but once you do, in my opinion there’s nothing like it in the US for income.

We are also active across a number of other midwestern states – let me ask you, is income your main driver, or are you looking for a mix of income and growth?

[email protected]

Hi Angel,
Let me ask you, is there a specific reason why you want to consider Syracuse and Western NY markets?
I am (somewhat) familiar with the areas as we did a few deals up there with some clients of ours, the yields are good, although property values can be a problem as there is not a very vibrant resale market.
There are other areas across the Midwest (not just Detroit..) that offers , in my opinion, better prospect of both high income, as well as capital preservation and possibly also capital growth.

[email protected]

TH,

That’s a good question, and I think you could probably do something like that both on a rental and a “seller finance” deal.
It might be a better idea to increase the deposit you are asking for, say you did 1.5 months + a security deposit (so on a $1500 rental, you’d get $2.250+ whatever you wanted for appliances) than to put it down as a separate item. Most rental agreements are just really standard contracts (happy to send you one or two that we usually deal with) and as soon as something deviates from what people are used to, alarm bells seem to go off!

Unfortunately, you also need to keep in mind that some tenants are just really short for cash which might affect their ability to pay a large deposit to be able to move in.

Another thing to consider is a Lease to own contract, in my experience those homes are usually looked after very well, as the condition of the property is absolutely crucial 2-3 years down the line when it comes to applying for a mortgage.

[email protected]

I have to second the question asked by Troy, and I have also raised the same question with regards to someone on this forum (don’t remember the post) that was offering assumable financing in Texas.
My first question is, how do you deal with the bank assuming the loan – in our experience, they are usually not that happy with that, and
second: if, as the case was with the Texas program, there is a $20K payment made, who makes that money? If the current owner is letting you take over his mortgage payments, most likely he is in default or close to anyway, so you’re really doing him a favour by assuming the mortgage.
I know the second question doesn’t apply to you, but just in case somebody picks up on it…

[email protected]