First Financed Property in the US

Well I believe I have provided everything to the bank so they are happy now to continue, at least they seem so for the moment anyway.

I do not really understand how one piece of paper saying how much I have earned in my current job signed by my payroll officer means more than all the payslips also signed by my payroll officer? But anyway it is what they wanted so that is what they got.

And no I am not offsetting the loan against one of my current properties, both my current properties are owned under my LLCs, this one will be owned under my personal name, because the bank would not lend to an LLC. Perhaps down the line when the LLC can show a steady income from all the properties they may change their mind, but for now it is just under my own name.

Would be good to be able to use collateral or leverage against other properties so did not have to provide a deposit every time.

Just imagine being able to buy a new property every day that is positively geared, paying for itself comfortably. There would be no limit to the money you could make, but sigh, for now still need to save up for the deposits. At least it isnt as bad as saving for one in Australia.

Only one last thing left outstanding, just need to organise insurance for the property, should be just about there by tomorrow, frustrating having to wait for US to go over the weekend, everything just goes on hold for a few days.

Still worried something else will pop up causing another issue, I guess just a healthy bit of pessimism

Well I appreciate your admiration, I just do not know why they make it so difficult…it has almost broken me I can tell you that.

All I am trying to do is give the US Banks some money, but doesn't even seem they want to let me.

Julsss1, the property is only $82,000, broken down into a $50,000 mortgage and $32,000 deposit (roughly, with some fees and such in there). The rent should cover everything. Currently the tenants are in the property paying $800 per month and the monthly repayments will be $425. So this leaves $375 a month for maintenance, property taxes, fees etc etc. Hopefully it will pay for itself anyway.

I do have two other properties in the area that were bought outright and they receive $700 and $800 per month rent, so I will have no issues being able to pay off the mortgage and not have to transfer money from Australia over there.

Just an overall update, I had to visit FedEx again, luckily this time I was in Sydney so it was a much easier experience, they needed the originals of all my loan documents. When I sent the first documents over last week I only sent the ones that were Notarised and I scanned and emailed the other ones through, I was not thinking straight and didn't realise they would need a wet signature of the ones that I had just signed myself. Regardless, they are all sent over there now, they should currently be on a plane headed for USA. Estimated delivery for 21/3/2014 which is good to get there before the weekend.

Been a long and tedious journey, but I have a feeling I am almost there (but I am not cracking open the champagne just yet)

Ok I have had the day to let it all sink in try and reflect on the experience, I will try and put it all in a summary so if anyone did want to follow in my footsteps they could hopefully have it a bit smoother than I did.

Step 1 – Met with Mortgage Broker while I was over in the US (October last year), overall he was not too much assistance, but he did get the ball rolling so I guess I give him credit for that. I guess with him being American he did not really understand how difficult it was for an Australian, and the cultural differences we have over here, particularly with the language barrier (I know we speak the same language, but the terminology is just too different and hard to have a proper discussion).

Step 2 – Put an offer on a property, was mid January at the start of this year. My property manager set me up with this one through her real estate agency (Century 21). I was lucky that I had very understanding sellers who were able to hold on to the property while I dealt with all the issues of closing the finance. I have not physically seen the property, however I do trust the judgment of my property manager enough that I will take her word for it when she tells me a property is a good buy. Also it is only down the road from my second property (which I have visited) so at least I know the general area is good.

Step 3 – Provide proof of income for the bank to obtain loan approvals – this was probably the most difficult step, it did not seem whatever I did provide them was enough. What was required was 24 months of earnings, apparently payslips were not enough either, I needed a bank from filled out and signed off by my current employer which states my current income as well as a few other things (like expected job stability and such), I also needed a similar form from my previous employer (because I had only been at my current employer for 20 months). In the end it was not difficult, I was just frustrated that providing all my payslips and tax summaries were not enough for them.

Step 4 – Provide extra documentation to the bank – Another tricky one to provide was 3 credit trade lines. I had never heard of this before, and at first it made no sense. In the end I just needed to provide proof that I have maintained good credit. Unfortunately, unlike Australia where they only seem to require 3 or 6 months, they needed 24 months proof of good credit. Again I tried to provide to them what I thought they would like, statements from my mobile phone, internet, and 2 credit cards for the past 24 months showing them that I had always paid on time, but in the end it was still not satisfactory. In the end I went to a credit report company, at first I tried Veda (which was free) but it did not give them the required information, I then went with Dun & Bradstreet, and I had to pay $30 (I think?) for a credit report the next day in the mail, and I scanned this through to the bank and this seemed to satisfy them. Basically it just had a blank page when it said any infringements which showed I had never shown signs of bad credit. I think it is a lot easier in the US with a credit score available to everyone, so they were hoping to get something like this, unfortunately they just did not realise that we do not have these facilities in Australia.

Step 5 – Organise insurance for the property – This is a step I did out of place, I did not do this till last, did not realise it was required so it became a bit of a rush in the end. Luckily my property manager knew a insurance agent and was able to organise it very quickly and it did not delay the closing at all. You will see as part of your deposit there is a provision for insurance (it was $1,500 for mine, insurance was only $1,333 in the end).

Step 6 – Get loan documents signed/notarised – I had a few forms initially from late January which I sent off, but these were useless because by the time the final loan documents had to be sent off I just had to do them again. So I did the same documents more than once over the 1 month period from initial loan documents to final loan documents. Having loan documents notarised was also tricky given I was working in the bush, far away from any Notary Public. If you are in a city it should not be too difficult to have documents notarised, however it is not cheap. I believe I paid about $300 to have 6 documents notarised. Once I had these documents notarised I immediately went to FedEx to get them over to the US as quickly as possible. Not sure if this was essential, I just didn't want to take any chances. One mistake I did make was only sending the notarised documents through FedEx, the other documents I just scanned and emailed them through. Unfortunately, they needed originals so I needed to visit FedEx again and send off those documents. One hint I can provide is just make sure you have everything organised, you will receive approximately 30 documents that needed to be signed off or initialled, just double, triple check that you have everything sent off so that nothing is missing. A lot of the documents do seem to be very useless and not too important, but the last thing you want is to be waiting for them to review the documents, only to find they are missing one.

I think that was pretty much everything I went through, it does look fairly simply, but I guess it was made more difficult given all the travelling I do for work (also had a trip to NZ in the middle of there too). In the end, it is not complicated to give them what they want, but it just took me a while to understand what they actually did want. I kept trying to give them what I thought they were after, only to find it was of no use to them. I would say the next time I go for a property it would be a lot simpler.

I will also add another post with all the costs involved as a summary, so you can just see if it is economically viable (to be honest I am not even 100% how profitable it will be myself)