Hi everyone [
]Good to find such an interesting and highly interactive site, I’ve just spent the better part of 2 hours pouring through all the previous forum messages [^]
I understand everyone here is being proactive in their wealth creation through real estate. Given that we all want/prefer positive cashflow from our rental properties it can be difficult to purchase desired properties, or at least properties in a desired location.
I am currently working with a partner on ways to increase cashflow (mainly through tailoring properties to students and renting them per room), but thinking right out of square – has anyone looked into using US finance?
The current interest rates and terms are much more favourable (as low as 2% variable and 4% fixed for 30 years!). Can anyone offer any suggestions on how to purchase Australian property using foriegn lenders.
Can it be done? I believe there must be a way, whether it be through a money partner in the US, having the money lent to a company rather than individual, or through the use of something like a Nevada Corporation. After all, if I were a US bank and someone came to me from Australia with a sound investment that put my money at very little risk I’d be jumping at it!
I would love to hear any stories, warnings, facts or advice on this issue. Also any money exchange details/costs/risks that could be associated if it is possible.
Imagine the possibilities if you could purchase all of your properties on a 4% fixed interest loan for 30 years!!
Thanks everyone [
]Hi Leigh,
Even though this looks really good at first it is infact very risky.
The risky part comes from the fact that you have no control over the exchange rate. For example if you had done that about 7 years ago when 1 aussie dollar was worth 0.7 US you would be crying now. (even though things look like they are getting better.)
For example if you took a loan of 200,000 AU (Which is the equivalent of 140,000 US at 1 AU =0.7 US)
a year later when 1 AU = 0.5 US your 200,000AU would only be worth 100,000 US (So you would have lost 40,000 US or 80,000 AU in one year.)I know that you could argue that you wouldn’t sell the property for many years etc… I am not saying it is good or bad just letting you know what the risk is. As you know it works the other way around too. You could make heaps. but it is a bit too speculative for me.
I never tried to get a US loan so I don’t even know if it is possible.
Hope this helps.
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APIM coming soon …*************
Thanks APIM.
I realised that the main risk would lie in the exchange rate fluctuating, and I am yet to look into this. Whether this has a + or – long term outlook I do not know. Honestly I have only just thought of the concept and have not had time to research it, that’s why I thought I might throw the idea to the Forum members, see if anyone has tried or heard of this before.
You are right in speculative though, and I would expect that’s how the banks may look at it too. One question which people may be able to answer for me though is whether or not there are regulations/policies which prevent the use of foreign monies being used for investment. I’m not sure what method NZ’s use to invest in AUST (and vise versa) or the Japanese in AUST but i’m guessing it may be along similar lines.
Thanks
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