Newbie question – which US bank to open an account with?

“After using the BoA secured card for 6 months I got offered an unsecured Capital One Platinum card in the mail. You need to make sure your secured card is reporting to your ITIN credit file.”

Just because you receive an offer for an unsecured credit card doesn’t mean you will get one! We have visa’s, SSN’s and are living in the US but have been rejected at every try after having bank accounts and secured credit cards for over 18 months. They simply keep telling us without permanent residency (we are on E2 visa’s) they cannot lend as they are the rules. We have great relationships, business bankers and managers but their hands are tied and they have tried numerous things for us.

I’ve given it up as a bad joke and have concluded whatever we are doing we need to do with either our own funds or hard money lending. Secured credit cards do get your FICO scores ticking over but our Wells Fargo cards only reported to Experian and not the other 2 credit bureaus so it wasn’t as much help as we thought. The FICO score is only part of the puzzle that is required so don’t think a secured credit card is the answer.

Capital One are very happy to offer you a platinum Card and also more happy to reject you once you apply!

Hi!

I was planning to open an account Citibank in Miami, but the property its going to be in SW Florida, where they don't have any branches. Apparently they have a policy that if the property or business its not within 50 miles from the branch you can not bank with them!! Never heard of this before!

Does anyone have a bank/contact to recommend in the Ft Myers area?

Thank you!

CH

Hi Buzzer,

If you are an individual opening a bank account you will need a SSN (social security number) someone in this forum mention that could get one mentioning that its not for work purpose. Otherwise you need the ITIN which is the individual tax ident. number and you get it when you do your tax return. When you form an LLC you can organized a EIN (Employee identification number) even if your LLC will never have an employee! and with this information you can apply for a bank account for your LLC and you take the money out as a member of the LLC.

Here are some of the benefits of an LLC (I copy form wikipedia ):

• Choice of tax regime. An LLC can elect to be taxed as a sole proprietor, partnership, S corporation or C corporation (as long as they would otherwise qualify for such tax treatment), providing for a great deal of flexibility.
• A limited liability company with multiple members that elects to be taxed as partnership may specially allocate the members' distributive share of income, gain, loss, deduction, or credit via the company operating agreement on a basis other than the ownership percentage of each member so long as the rules contained in Treasury Regulation (26 CFR) 1.704-1 are met. S corporations may not specially allocate profits, losses and other tax items under US tax law.
• Limited liability, meaning that the owners of the LLC, called “members”, are protected from some or all liability for acts and debts of the LLC depending on state shield laws.
• Much less administrative paperwork and record keeping than a corporation.
• Pass-through taxation (i.e., no double taxation), unless the LLC elects to be taxed as a C corporation.
• Using default tax classification, profits are taxed personally at the member level, not at the LLC level.
• LLCs in most states are treated as entities separate from their members, whereas in other jurisdictions^[which?] case law has developed deciding LLCs are not considered to have separate legal standing from their members (see recent D.C. decisions^[which?]).
• LLCs in some states can be set up with just one natural person involved.
• Less risk to be "stolen" by fire-sale acquisitions (more protection against "hungry" investors).
• For real estate companies, each separate property can be owned by its own, individual LLC, thereby shielding not only the owners, but their other properties from cross-liability.

I know it's been a real concern for everyone buying in the US, to be able to open a Bank Account without all the hassles and negatives that are thrown at you from both locally in Australia and from most in the Banking Industry in the US

I have had my fair share of working with different managers over the last few years, and just when you think you have cracked it with the right person, they then up and leave, and no one else seems to be able or even want to help, always citing the Patriot Act or some other reason they can't open an account without the customer being present.

So for a while now, i have been working very closely with a fantastic Personal Banker at Wells Fargo, who has been working with Aussies and others for almost a year now, everything goes through the legal department, so everything is kosher, and he has been able to successfully open accounts, where many others just don't know how or what to do.

And yes, you can both transfer in and out of your account and back to Aussie, even though others have told me you can't do it, but i have very happy clients that he is looking after and is always very helpful.

You do certainly need to have the proper docs in place, and a list is included…

1.  LLC Registered Articles of Organization

2. The EIN (tax number)

3. Copy of Passports

4. Copy of drivers license

5. Physical US Address (use the property)

6. A US phone number

7. e-mail address

And there is a definite process that is done.

If using the US Tax Person I use as part of my team  ( Totally Independent to me and also a US Accountant ) to set your LLC etc up, then you will get the US address and phone number as part of my opening the account  for clients. Others have got their LLC or other entity set up elsewhere and have their address etc already.

It also doesn't matter where you purchase, even though the US is in many ways far behind us in electronic banking, sometimes even mailing cheques to the bank branch, it can still be done.

Finding this person took a lot of using my contacts over there to find him, and good contacts are like finding gold.

Also, I'm sure many have found out, is that good communication can also be a problem when dealing in the US, so far that hasn't been a problem, and accounts have been opened very quickly when everything is in place.

As for US Loans, again no problem, 8.25% initially for three years, then 5 years refinancing with a further 5 years available, so 8 years to start with, so no worrying about finding ongoing finance or paying a huge balloon payment after the initial period.  And just started, for total peace of mind, you can now get a 30 year Mortgage, this is for both US and Foreign Investors, on a 50% lend, same initial rate, but a low monthly payment, and the tenants will pay that as well as all other expenses, and still leave you with a pretty good cash flow ( money in the pocket ) every month.

Right now i have properties that are packaged with the 30 year loan included, you can always pay cash for them as well.

Just to give you an idea, a buyer is just purchasing 10 really top quality beautifully renovated properties in good middle class mainly homeowner suburbs, with the 30 year loans in place, so she was able to virtually double her portfolio in one hit, spending $300,000 and after all the loan paydowns and normal expenses, she will still be cash flowing at approx $3,200 PM. It's not for everyone, but it's available.

This is through a proper Finance Company, not some back street group of hard money lenders, and being an asset based direct lender, they don't depend on the banks, and they also don't lend on cheap badly located rubbish, and have set criteria before they will look at lending on a property. but when they do, you will know you have a very good well located property as they basically partner with you.

So, just to let people know that these things that can be major problems, can be overcome, it takes time to develop the better contacts and build relationships.

Thanks for reading this message.

Jeff

Hi Bigfirerichie,

We've looked into opening an account with HSBC. The problem is, they will only allow you to open an INDIVIDUAL account in the US which is pretty useless as you're technically not allowed to deposit rental payments into it. This is because the US government views collecting rental payments as you operating a business and hence requires that you open a business bank account. It's impossible to open a business bank account in the US with HSBC as they require you to have a turnover of at least $3million and be in the import/export business.

Hi Phil,

I get asked quite a lot for the contacts I've made, and I always tend to use them to look after my buyers, as part of the services i provide to them.

One of the main issues i have, and that's why I only ever use this forum piecemeal, is that i get a number of replies when i do include an article, that usually tends to put me down, together with the services I provide. Normally to promote their own interests, or to prove something.

Even though there are many different business models in this game, I tend to think that there is room for everyone that tries to do the right thing for buyers.

So i tend to shy away from providing contacts etc, and only mostly generalize  on this forum.

Best

Jeff