It is important to deal with the right people. It is a nightmare if something goes wrong and you are 20 hours away by plane. I use a top tier accounting firm who put together the structures for both my clients and I. I deal with property managers who are also investors. I also have a financial planner who co ordinates things on the ground for me.
However at this point I only buy the properties myself when I am there.Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Michael,
Lucky you heading over to chase the dream. I have just starting looking inti the same thing. Have you investigated starting a LLC to purchase the properties under. I am thinking of starting one in Delaware. One bit of info I am haveing trouble with is the US tax number. If the company is a partnership between 2, do I need 3 tax numbers or just one for the company?
Good luck with the trip I look forward to hearing the results.
Paul
Paul,
I encourage you to read our blog which should assist you with this and various other questins you may have. I would encourage you to use a incorporation or formation company to set this up and they can apply for EIN (tan numbers) for you.
Limited Liability Company is a separate entity in terms of liability BUT in the eyes of the tax authorities it is a "pass-through tax entity".
Profits of an LLC are not subject to Corporate Tax Return at the LLC level. They are added to the owner's taxable income. If the owner is an Individual, the LLC's profits are subject to Individual Tax Rates and if the owner is a Corporation, profits will be subject to Corporate Tax Rates.
LLC must report to its members (owners) their share in the LLC's profit using Form K1. Each member will add his/her share to his/her taxable income. Individual Member will file Individual Tax Return (Form 1040) , Corporation Member will file Corporate tax Return.
This makes me feel like the llc and members will all need EINs. I have not set one up yet as I am looking at trusts at the moment also.
Financiers do not look favorably on LLC so just be sure that is the best holding entity for you before you open it.
Why don't you drop me an email and I can keep you up to date with this type of info as we ad it to our blog. I have about 20 people now with whom I share all inf with and happy for you to join the group.my email address is [email protected] and the blog is usaforeclosures.blogspot.com
Paul,
yes you will need the 3 – when you set up the LLC it will have its own and then both members have to lodge a form W7 with the irs which is the application for Individual Tax Identification Number.
We will put this on the blog plus other info we discover over the next few days.
cheers
Michael,
Fortuitous timing! I have had my eye on the US as a positive cashflow paradise – not without it's pitfalls mind you. I am now following your blog with great interest – I firmly believe that there is a great opportunity – though as many have already stated, a number of hurdles to overcome. I would love to come along but, alas, I am in no position to head over at the moment.
I'll be watching your blog with keen interest. I guess this is more of a 'go get em' post… so go get em!
– Jim
Jim,
Don't worry – we are off to cause havoc. Thank you for your forum contribution.
about to post some LLC and taxation info – happy to put you on our email list if you want to drop me your email address.
Hi Michael,
I have recently been communicating with the staff from http://www.usproperties.com.au . They have offered me a property for $98,500 and the return will be approximately 13% nett the first year (outgoings paid by company for first year). They do all the leg work and basically all you have to do is say yes, sign and the deal is done. It makes it all very easy but I am sure there is a significant mark up on the property plus the fees the company is charging. I thnk there are better opportunities than this – do you agree?
I just find all the information about forms, tax rates, and getting the documentation in order, very overwhelming.
Is it possible for a real estate agent to organise the sale? I am definitely interested in going to the US in February with a friend of mine who is also very keen. Do you think 98,500K is too much…the property is in Vegas.
Cheers, Lana
Lana,
Love to answer your question – I need a bit more info first though.
What type of property is it? e.g 1 bedroom unit or 4 bedroom, 2 bathroom house with a double garage?
Is there are currently a lease or is USproperties.com just paying the rent as part of their guarantee?
What is the address of the property and I will be able to tell you what they paid for it. Even the suburb would assist in me answering your question.
Are the outgoings just property rates or does that include tax returns? What are the rates on the property?
Are you buying it in your own name or an LLC?
Don't forget you are going to be paying 7% interest on the money you borrow here to buy it and after next year there wil be taxes dues of probably $3-5000.
If you are only making $12800 per year – then deduct $7000 in mortgage interest then council rates you will be left with nothing.
See if you can find out the info I have requested and Bronwyn and I will be able to work out if this is a reasonable deal for you.
I love sites that say our team and then do not talk about anyone. You have no idea of who you are dealing with.
Anyway I am leaving for Texas on Friday.
Should have my old team back on track in a week.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Nigel,
Good work mate.
I was just reading similar BS on buyers agents web sites.
I am planning to set up one as I just discovered one agent trying to sell a unit he bought for $40K in Las Vegas to an Aussie client for almost $100K. – not cool.
All we need to do is offer good stock at a good yield and save our mates from buying overpriced crap from "professional team" websites.
Need a business partner?? Try to catch up with you when you return to see if we can help each other.
Michael
H
What I am looking at doing is offering a buying service. People will even be able to come over and see for themselves.
I will only buy properties that I personally inspect. I want to assist people to build a portfolio in America. I am not a running a factory line. It will be personal service.Over the years I have read a number of horror stories so called buyers agennts selling there clients into third rate investments in slum areas. The current experts are selling there clients into Detroit. Forbes magazine lists Detroit as the most dangerous city in the United States. They also have the number one murder rate in America.
But guess what its cheap.
You can buy well and build long term by looking at the whole picture and not just be attracted by cheap prices.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Hi Michael
Good luck with your adventures.
Have you got any research material on the vacancy rates in these areas, current levels of inventory (empty properties), take up rate per month and general direction of property prices?
The US Census publishes regularly on vacancies and home ownership – it would be interesting to see what is happening in the areas that you plan to invest.
All the best.
Chris White | Pillar Property
http://www.pillarproperty.com.au/
Email Me | Phone MeThe Property Investment Specialists
Michael,
Thanks for you help and ideas, I will be looking at your blog and see how the trips goes and to source current info. I have the forms for the IRS an will lodge in OZ.
Nigel,
I am looking a testing the waters and purchasing 1 cheaper property to start. Looking at doing this with out traveling to the US to start. I know this is a bit risky, but I am look for a goo web site to do this through. I have looked at a few aussie sites but they all want cash up front before they talk to you.
Once the one property work outs I will plan a trip over to get more. If you are going to provide this service shortly I would love to have a chat.
I have looked at a few UK property investment sites which seem to be better than the aussies. I guess you have that problem of distance though.
To any one that has bought property of the web,
Any feed back or experiences on investment companies would be good.
The comment about HSBC is correct, you can open a bank account from OZ, however they have increased the cost to $200. Most be popular now.
I have also looked at companies online to start a LLC you can get it as cheap as $135 USD to start in Delaware.
Paul
Has anyone tried these guys?
http://www.loanmarketgroup.com/
On there website it states they offer finance for overseas property.
Paul,
Have you selected an area in which you want to purchase? I have also been looking to do a cheap one initially but mine is actually for an office for when I go over.
A good free site to begin with is http://www.housesforsalelists.com – but naturall ythe best deals never hit these sites.
I am very happy with Georgia and Florida for some cheap deals.
If you are interested in more info drop me an email at [email protected]
I have a few charts on vacancy rates, etc that you may wish to browse over to assist with your decision.
B,
Haven't heard of them – sounds unlikely if they are Australian based that they will loan against US security solely but we will give them a bell in the morning.
Cheers
Emailing agents in the US and not even getting a response?
If they do reply – is it just to inform you that the property is under contract?
I have been up until 3am each night and now I have cracked how to do it.
6 offers in yesterday and I can get anyone's offers lodged immediately in Georgia.
Drop me an email if anyone is interested in assistance on this front.
[email protected] or happy to chat 0412509995
OK people,
A lot of people have told me they are having trouble getting agents to return emails or phone call.
Most of the agents that work with foreclosures have been spoiled and they just put a sign up and sit and wait for an offer to walk in the office door….they are not interested in answering phone calls or doing anything that would be considered above and beyond to sell the property.
I have circumvented this issue by directly employing an agent in the US to work directly for me, submitting offers and doing the paperwork. He will leave them enough voicemails and send them enough emails to where it is in their best interest to actually do their job and answer my questions.
I have a brilliant solicitor to do the settlements for me for about $700 dollars.
you – just have to look at problems sightly differently sometimes.
If anyone needs help with the process or agents let me know.
Also for those interested,
http://www.bankinginus.com have a special on Delaware LLCs for $95 plus rego fee.
If anyone is looking to get organised – check them out. You have to fill the forms in yourself and send them off but a far cheaper option i think.
Also assistance with bank accounts. Once again they don't do it for you but will help keep the costs down for getting up and running for US property acquisitions.
You will find that on the ground service is poor. That is why I am travelling there tomorrow to meet with the people face to face. If you d not do this you are wasting your time.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
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