Hi Steve and "fishface"

I cannot offer any answers but hoping someone else can…

I was heading down the SMSF creation path in 2010 and was keen on the Australian federal NRAS scheme using SMSF but came across challenges with ANZ and other lenders so have "parked" the idea at this point.
In the mean time we investigated the US property market and have purchased 2 properties – (1x 5br and 1x3Br Town House). These are purchased via an LLC (a US Limited Liability Company) with my wife and I as "managers" – co-owners of the LLC.
 
I am still keen to put more into Super but concerned re the SMSF implications of purchasing foreign assets – ie US property implications of taxation on a SMSF vs other ownership. Trustee implications etc.
 
We would love to build a portfolio with some set aside as "now money" but other segment insulated by the Super legislation. Unfortunately the Australian Super benefits/tax concessions are not mimicked by the US-IRS as they have different schemes that we as non-resident aliens of course do not qualify for.

We are seeing a lot of complexity arising from setting up the LLC and bank accounts in the US for each property outside Super as we have done for the 2 purchased in 2010 let alone adding the ATO/SMSF compliance hurdles.

Hopefully there is a simpler way that is all of the following
        profitable/
        legal/
       compliant  and simple
                                                

Guys,

We set up our Holding LLC in Wyoming as the on-going fees were slightly less based on the recommendations from the US advice we received.   After setting up the Holding LLC and receiving an EIN (US IRS Employer Identification Number) we were then able to open a US bank account.

Currently we have "closed" on one property and in the process of another state by purchasing via another Property Owning LLC registered in the same state as the property that is then owned by the Holding LLC (WY) as a single "manager". We believe each Property Owning LLC will require its own EIN and bank account that will then pass back to the Holding LLC for total income reporting.

I have current concerns about the taxation complexities but you can opt to have your reporting date the same as our Australian taxation of June 30 and all LLC reporting is "pass-through" for both US and Australian taxation.

Various US attorneys are able to set up both the LLC and the associated bank account for around $700, lots of emails and scanned in ID to satisfy the individual state LLC formation requirements PLUS the IRS identification. 
                                              No IRS EIN equals NO bank account for the LLC

hi Maree,

Do you have access to equity in other property such as your home or other investment property that is not fully leveraged?

You may save on fees / hassles by using the BYOB concept (be your own bank).   This will require the same Bare Trust set up for the non-recourse loan within a SMSF but you provide th funds via an arms length loan to the SMSF.

Some web information with all the usual disclaimers can be found at EvolveMySuper  "SMSF limited recourse borrowings from related parties"  and TheDunnThing Video Blog – Understanding SMSF Limited Recourse Borrowing Arrangements

I am exploring the same concept but have opted for another strategy short term. 

TassieJH

British Buyer,

You can't leave Miami yet  ….. it would be like Horatio leaving CSI .
… but seriously folks  we have all gained a lot of US knowledge from your post and the dedication to the thread/journey.

I am sure other will agree that we would like to continue "reading the story" and stay tuned for more episodes on MIAMI (ad)VICE.

regards,
TassieJH

Zita,

after many weeks I have finally been granted access to my online Wells Fargo account that was opened from Australia BUT via the creation of a new US entity – an LLC.   The formation by a US firm included the introduction to the bank for a US$200 fee and they facilitated the IRS papers to receive the EIN.  (equivalent of our Aus tax File Number for use by the entity when you do not have a Social Security Number)

All up the creation of the LLC and associated paper trail was invoiced at around $700US.  I will be using this facility to be my holding entity for any rentals. 

TassieJH

Hi Martha,

I think you are in the "right place" but this is very much a start of a journey as yo have probably read in some other posts.  (an interesting read here Miami (ad)VICE )

Suggest you put together some concepts as to the size and location of the intended "deal" that will enable others to scope the opportunity.  You will then get some feedback on the basic research such as:
1/ your intended City / Suburb / Zip code demographics  – "great deal" but bad crime rate / unemployment / vacancy rates with no upside on jobs.   Versus overlooking Central Park REO for 50K 

2/ Intended entity structure to purchase – assume LLC that can have multiple "managers" (owners that can be a mix of individuals or other entities such as another LLC or Trust etc

3/ Concept for the asset – Buy – renovate – hold ….. who will manage and ongoing asset control / rent distributions   OR
   Buy-renovate-sell ….. some partners may wish to hold onto the asset which can then be handled by the managers selling down their share of the LLC or the individual units/flats are able to be sold off / retained.

These comments are starting points only …..
I am sure there are a few of us interested in what you are contemplating 

Hi Steve,

Great dialogue and insight from "the average punters perspective".  Most of us reading your travels are probably owners of a few properties in our home country but the hurdles and different practices we are all seeing / reading / experiencing with regard to the US as a country and the individual states is mind blowing.  In Australia we have fairly minor differences with the real estate laws, fees, taxes etc between the 6 states…. but in the US with 50 ….

Keep up the great diary.  I look forward to my updates on your adventure……with a great happy ending we all hope.

TassieJH

Jeff2tract,

I would be interested in making contact with your accountants for some services.

Please open your profile up to accept email contact.

thanks,

TassieJH

Onebiggumby,

I have received your email but no phone number to call you on or ability to reply via your forum profile.
Please enable private email contact via the forum or contact me via the contact mail with a phone number. 

regards,
TassieJH

Hi onebiggumby,

I purchased a Town House in "my name and nominees" in SA last December when I did not have a company structure.  After some quick introductions to a new accountant and conveyencer I THEN set about the establishment of the Trust and the Company.

Costs to change the contract were $100 handled by the conveyencer.  All other costs were from the accountant to set up the company and trust structure. (around $1000).
Expect a lot of hassle with the banks as it will affect the loan structure and increase costs as you will probably need Directors guarantees as $200ea. Plus Solicitors fees to approve your company trust deeds etc etc.