September 1, 2020

Investing in US Real Estate as a Foreign Investor

Investing in the U.S. real estate is among the best rental investing options in the world. In this article we will examine how you as an overseas investor can join and make your first investments into rental property in the US. BlackTile Investment is a turnkey company, working with investors all over the world to buy assets in the US, especially in Florida. If you're interested in purchasing US real estate from overseas, there are a few things you need to consider. The US is the best investing market in the world, but if you're a foreign investor, there are additional hoops and hurdles to jump through.

5 Steps you have to take when investing in the US as a Foreign Investor

At BlackTile Investment, we work with foreign investors on a daily basis, in this article we are going to summarize the steps foreign investors can take and walk through five simple steps in order to invest in the US. We are looking at the advantages of working with an investment team, setting up an LLC and EIN, and tax implications.

If you are overseas, you will have to take a few extra steps but the process of buying an investment property in the US can be as seamless as it would be for US citizens. Let's take a look at the 5 key steps

Step 1 - Working with a team

As much as you would like to do the entire process on your own, we recommend that you work with a team of professionals that manage client’s requirements on a daily basis, know the ins and outs of the processes and can help you in any road block you may run into. Especially important is the team that is close by the actual property you would like to acquire, because they make sure that all documentation and maintenance is done according to regulations and you get to rest assured that your asset is in the best hands while you are overseas. The team you chose should also be able to help you set up the LLC and connect you to banks and accountants which you should use when you run a rental property business.

Step 2 - Setting up a business entity

Setting up a property LLC or a C corporation is a vital step in running your rental property business. BlackTile partners up with different corporate services which will be able to set up the company and do the accounting. Some companies are especially focused on international clients which will be beneficial to you as they know the requirements of investors who are overseas. Taking advantage of a property company to own the actual property will allow you to optimize your tax based on the country you live in. Figuring out the right tax structure according to your individual situation will enable you to dive deep into tax deductibles which will increase your NET profit.

Step 3 - Getting an EIN

An EIN number, Employer Identification Number is a designated ID issued by the US government. It is free of charge available here. You will need this number for all accounting and financial processes later on.

Step 4 - Finding the right property

The most exciting part and also the easiest part is finding the right property. If you choose to work with real estate agents or advisors like us, you will quickly find an asset according to your requirements and budget. BlackTile Investment specializes in Short Term Vacation Rental Properties, which generate a high ROI and outstanding yield when you include the cash flow and appreciation. As a turnkey company we provide property management, furnishing and legal services so that you're receiving monthly cash flow and don’t have to worry about anything else.

Step 5 - Setting up a bank account

In order to set up the bank account, the bank of your choice will require to see the purchase agreement for the property under the property entity that you have created. They also will ask for the EIN number. Once you have taken these steps, your property LLC can open the bank account and sign the purchase agreement in order to facilitate the sale.

If you have any questions about the process or anything in particular, we'd love to help you out. Feel free to send us a message or give us a call. We work with a lot of clients internationally to help them get set up on their rental properties.

Foreign Direct Investment into the US (2017)

Source: Select USA

DISCLAIMER: BTI is not a financial adviser. The company only expresses my opinions based on personal experience. Your experience may be different. This and all other available content is for educational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.

About the author
Lennart Hector
Lennart is born in Germany, married and father of 1 daughter. Over the last 15 years, he has lived and worked in various countries and organisations in Europe and Asia. He was based in Germany, China, Hong Kong and Singapore, studied different markets, cultures and traditions. Lennart finished his education in Wholesale and Foreign Trade Management before achieving his degree in Finance. He is passionate about achieving his clients goals, growing with the business and finding win-win solutions for all involved stakeholders. At Black Tile Investment he is in charge of coordinating the international affairs of the company. In his leisure time, he enjoys travelling to new destinations with his family, nurturing his network of friends and engaging with the local community via charity organisations.
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