02:12
Speaker 2
Hi everybody, this is Robert Chadwick with America Mortgages. Thank you for joining us for another webinar series. We are very excited to have Thomas Carden. We’ve had Thomas on multiple times. Thomas is the CEO of American International Tax Advisors. Similar to US they focus on a unique market which is the foreign nationals and US Expats filing taxes. Now in today’s webinar we’re going to cover tax strategies. And I think one thing that’s very interesting and very relevant these days is Thomas is going to talk about the big beautiful bill which as everybody is likely aware is trying to get passed in the US and will it or won’t it affect investors that are investing in US Real estate? So Thomas, thank you for joining. I appreciate it. I will let you introduce yourself and then we will go through the slides.

03:24
Speaker 2
After you’re done speaking we will go over the American mortgages slides and we’ll discuss the different loan programs available and a little bit about the company. And then we will do our standard question and answers towards the end. So if anybody has any questions, please feel free to put it in the chat at any time and they’ll be addressed at the end. Also in the chat box there are links for both Thomas and for myself to either schedule a call to speak to a US Loan officer or to schedule a call to speak to Thomas and his team. So with that said, Thomas, thank you again for joining us. We really appreciate it. Take it away.

04:10
Speaker 1
Okay, Robert, thank you. I just swapped me to. Not sure if you swapped me to the main screen yet with it, you know. My name is Thomas Cardin. I’m the director of American National Tax Advisors, one of Asia’s largest US centric tax firms. We handle the filing of taxes for both U.S. Citizens who are expats overseas and individuals and businesses doing business in the U.S. One of things I’m going to talk about because this is over US or foreign ownership of US Rental real estate in the United States. I’ve been doing this business about 30 years. Next year will actually be my 30th year doing u S taxes. Over the years I’ve seen tens of thousands of people do this.

04:52
Speaker 1
There has never been a more steady way to build wealth that I have seen outside of rental real estate done properly with proper planning, you know, you can preserve wealth, you can save wealth. You can also maximize your earnings income now if you want cash flow and you can build capital depreciation if you want to. How you approach rental real estate in the United States is up to you on what your individual goals. But in almost every case, rental real estate provides a very valuable way to do this, even regard, even disregarding ups and downs of the markets to this. There’s never been a bad time to buy real estate over the long term in the United States, especially when it comes to rentals. This is combined with the fact that there is a general shortage of housing in the United States.

05:47
Speaker 1
So, you know, we may be in a top market, we may be at a bottom market, but in five years we are still going to be cheap from where we are right now. You know, with this is a really good way to do this. You want to go into the first slide? First slide for me.

06:00
Speaker 2
Sounds good.

06:05
Speaker 1
Okay, and here we go, one more slide. Okay. Overview of foreign ownership in US Real estate. Okay, here’s one of the great things about US Real estate to this. It’s an open market, okay? You as any individual can go in and buy property to this. Unless you are literally on a, one of the rare restriction list to this, you know, to this. And you are protected under a very strong legal system. US Real estate is a magnet for national capital due to strong legal protections and market stability. What that means is you are treated no differently as a foreign national as if you are national in the US There are some exceptions and a big beautiful bill will go through with this towards the end of this. But you’re treated as exactly the same for ownership.

07:00
Speaker 1
They’re not going to go in and seize your assets to this. You’re not in court in any difference with this. You are treated as the exact same from a legal ownership standpoint of this and that legal strength of ownership and property in the United States is absolutely incredibly strong. It’s hard to debate how good the US Ownership of property is. It’s a bedrock of US wealth for individuals and that proceeds to you as non US Resident if you choose to buy a real estate there. Next slide please. Okay. US Tax framework foreign owners. Okay. Foreign owners are subject to US tax on rental income from US property withholding tax. Now withholding tax is 30% on gross rental income unless specific steps are taken. These steps are incredibly easy to take. Net income taxation.

07:58
Speaker 1
With proper filing, the tax is only on net rental income after deduction. Okay? Now that’s a very important thing on this and why you want to file US Tax returns when you own US Rental property, even if you’re not resident in the United States. Now if you’re not resident in The United States, you’re only taxed on the rental income to this. But I always use the term and Robert will know this term very well. You can be cash flow positive and rental property in the United States and tax flow negative. That’s because the, there is a lot of tax incentives for owning rental real estate in the United States and one of the biggest expenses, depreciation. We’re going to go through a lot more in detail on that.

08:43
Speaker 1
But for a majority of the years that you would own rental real estate, I mean the mass majority of years, you should owe no U.S. Tax on the rental real estate as long as you don’t sell the property to this. So we’ll go into the next slide on this one, Robert. Key tax deduction foreign owners, okay? Common deductions, mortgage interest, okay. Property management fees, repairs, advertising, cleaning and more. Now here’s the biggest one in this depreciation. Significant annual deduction for wear and tear on the property to this. Now what that means is you have when you buy a house or a condominium or even a commercial property, okay. While the land itself is not a depreciable expense to this, the actual buildings and infrastructure on that property are a depreciable expense.

09:39
Speaker 1
Now what that means is each and every year you are going to get a percentage of about 125th of the property to this as an expense. Because the idea of that is that building and the assets on it will actually decrease in value. In reality, they almost never do this, but each and every year you get an expense to this. Now the actual depreciation schedule is over 27 and a half years and it’s a straight line. I’m going to use a little bit easier, more math for you. Okay, let’s say it’s a 25 year depreciation cycle which means that each year you get 4% off of the value of the buildings and the assets when you buy it as a depreciation.

10:23
Speaker 1
Now that generally with a yield term of about 8 to 9% of rental yields in most places, that’s going to wipe out about 50% of your profits from a tax standpoint each year to it. This is the reason why with smart planning you can get a nice cash flow income out of US Rentals real estate and be tax and be tax flow negative to this with it. So the entire incentive of the US Tax system in the United States is to incentivize you to own rental real estate in the United States with this. It’s one of the Very few things other than farming income that you can get really positive tax implications on. Okay. And again, you know, the second part of that is many or most foreign owners will pay little or no US tax when deductions are applied.

11:14
Speaker 1
But yet you can still get a nice cash flow income to this should you choose to get cash flow out of this. Next slide. Okay, now reducing or limiting withholding tax. Okay. The first key to this is file a U.S. Tax return with this. Okay? If you’re filing a U.S. Tax return, that gross tax goes, that gross tax of 30% goes away to this you’re now doing net income tax. Okay? The second step on this is in order to file a tax return is you’ll need what’s called an ITIN number. Now that’s an application you would actually fill out generally with your first tax return. We actually do that. We’re a certified acceptance agent. So we can get you a tax ID number and then submit a Form W8ECI that allows you to get that tax ID number.

12:01
Speaker 1
Those two combinations allow you to avoid the withholding on 30% gross and just deal with your net tax issues to it. It’s fairly efficient way and it makes owning rental real estate very nice in the United States. Next slide. Okay. Benefit to U.S. Tax treaties. Okay, now there are a very, a lot of tax treaties on this and this is going to actually come into effect with the big beautiful bill on this stuff. Okay? And there are a whole lot of them. So it’s impossible for me to go through every one of these things with this now. But some tax treaties may very specifically lower US Tax rates on rental incomes. So even if you were owing tax on a U.S.

12:44
Speaker 1
Rental property, you may be able to use the individual tax treaty to lower those, those taxation to this on that should you use to do this in a taxable way. Now secondly to this is no double taxation. Foreign tax credits may apply if it’s taxed, if the income is taxed in both centuries, which generally means. So say you’re paying a certain tax rate in the United States on this when it flows to you as actual income tax to you and you’re in a different country with a U.S. Tax rate generally that other country that you’re maybe resident in should not be able to tax you again, they’d have to give you a credit back for that tax in the United States. Again, there’s a whole lot of countries on this with tax agreements.

13:26
Speaker 1
You have you want to talk to us and we can give you a Little bit of guidance on that. And then even some countries completely exempt, you know, certain types of income from US Tax with this. So again, you know, context. And by the way, because you’re coming in through American Mortgages on this, we give you a free hour consultation on talking about US Tax rental property and stuff to this. So give us a call. You know, all the contact information is later on in this. But you know, if you need specific questions or will help you, there’s no charge to do that whatsoever. To this next slide. Okay, now we talked about depreciation. Now in a lot of times in the US Tax code, they’ll give you a stick and a carrot.

14:07
Speaker 1
The carrot in this case is depreciation to own US Rental property to this. Now, what you generally do in rental property is the first rule is never selling US Rental property, okay? Which means you don’t want to go and sell because when you do, you have to take all that depreciation you took off as an expense for income in the year you’ve sold the property. Plus you’d be taxed on the capital gains, which means the increase of price of the rental property. This can be, you know, not the greatest tax rate in the world because recapture depreciation, especially over a large number of years, can be bad. However, however, again they give you another carrot, which is called a 1031 exchange. Now, a 1031 exchange means you go in.

14:52
Speaker 1
So say your property is getting tired or you’ve got so much equity in the property that you want to do something else. You want to move from a house in Texas to another property somewhere else with this or an apartment building somewhere. What you can do is you could sell the property and with a certain amount of time, you have to identify the next rental property and transfer the money into that new rental property with this. That gets you no capital gains tax with this. And you are nice and clean on the tax issue. And if the property is now worth more money than when you start the original property started off with, you now have a bigger depreciable base on this. The second side on this, and this is where Robert really loves talking about this, is never sell the property.

15:36
Speaker 1
As the property increases in value over the years, you can refinance that property and take a new loan on the equity you have in that property and pull the money out and the loan is free for life to this. And now when that passes through to your heirs, if this property passes through to your heirs, their cost basis is the basis upon the date you pass away and all that capital gains goes away for them. There’s a very nice way to plan to never have to deal with either capital gains tax or recap or capture depreciation and still maximize stuff. Now one of the wackier things about this too is calculations.

16:15
Speaker 1
You know, if you’re doing this and you’re using finance properly, what you do is you go buy a piece of property or several properties for say half a million US dollars to this. Now when you buy that property for half a million US Dollars, you know, eight to ten years later, you can probably go take your equity out of the half a million dollars that you put into the property originally in a new finance loan with us. Guess what? You still own your property though. So that property will continue to increase over the years and cover the, COVID the mortgage balance on this thing. And guess what? 10 more years later you can probably take your, the amount you put in out again onto this.

16:53
Speaker 1
The average increase in property over the decades has been about 10% in the United States for capital depreciation, 8 to 10% depending on where you’re at with this. It’s a real nice way to avoid taxation almost completely with this. In fact, in most other countries to this, when you’re bringing the money back in the countries, if you’re using a loan on that, they’re not going to tax you either because it’s not income, it’s a loan back to you. It’s a way to use rental real estate in the United States for your advantage. It’s the only time you can go sell your cake and still have it too. With this next slide, avoiding common fit costs. Okay, the compliance issue. Failure to file or withholding can lead to liens, penalties or immigration issues. You need to file your tax returns. It’s that simple.

17:44
Speaker 1
Make sure you’ve got everything in compliance. When you’re using a rental real estate agent, you know who’s managing the things, make sure they’re filing on your documents. You can also talk to us. We don’t just help with planning, we actually do all the compliance as well. So we can make sure that you’re in compliance and being as tax efficient as possible. So we can help with both the planning and the compliance side on handling US Tax returns to this and then, you know, again, consult competent international tax advisors. Also, I’m going to give a plug to Robert here. Robert solved a lot of and American Mortgage solved a lot of issues we had for our clients dealing with the US Rental real estate to US Financing when you’re living overseas, even as an American, is difficult.

18:28
Speaker 1
When you’re not an American, it was almost impossible. However, Robert gives you X and American mortgages gives you a lot of access into those mortgages, which are a very tax advantage. Smart way to deal with your property. This. And I’m going to give you one example on how this begins to magnify things. Okay, we’ve already talked about expenses. Mortgage interest is an expense to this and you know, to this. So now what you do is when you have that half a million dollars, you could go into the US in most cities in the US and buy one rental property for half a million dollars with this. Now that is not the smartest way to do this because you don’t have the rental expense on the mortgage with this to this.

19:10
Speaker 1
Now what you want to do though is if you buy five properties to this, you can do that with the same property. So say you buy two and a half million dollars worth of real estate using that half a million dollars. Now here’s the good thing about doing the strategy. The mortgage should be paid off by the rental income yields on these properties. Your expenses should be equal to that. Or with the depreciation, you should owe no tax on that. But instead of having a gain on $500,000 at 8 to 10%, you’re now having a gain on $2.5 million at 8 to 10%. Your gains over a period of time on capital appreciation massively outweigh your tax issues. And again in just several more years, you go in and refinance or you identify other properties and you can use this.

20:01
Speaker 1
In fact, and here’s another strength of this. It would cost you nothing when that has doubled in value in the price of what you’ve put into your initial down payment on this to pull that money out, other than some small origination fees and interest on it, to then go and buy another property to this. So say you bought that two and a half million dollars worth of property in five to eight years, possibly 10. You could, you can refinance and guess what, buy four or five more properties in this. You know your tax advantage on using your debt properly when you’re dealing with U.S. Rental real estate. To this incentives are there in every way. Next slide, proposed tax, rental changes and remittance tax. Okay, we’re going to go through several of these things with this.

20:47
Speaker 1
Okay, there is supposedly a new excise tax, 3 1/2% on international money transfers. It’s back and forth on whether it’s 5% with this. Okay, now with that would that sounds horrible when you’re taking money out of the U.S. Okay, but what they’ve come to and right now to give you examples of this, they, the U.S. The, the house has passed this in the United States. There’s, there’s three more steps on this. The Senate has to pass their version of the bill, then it goes to a committee that equalizes the bill, then both houses have to pass that again and then it has to be signed by the U. By the, by the President. Right now we’re only at the earliest step of this. Now here’s the good news about this, okay?

21:28
Speaker 1
Because you’re going to hear a lot of terror stuff on this remittance basis. When it comes to, when it comes to remittances, if you are a US Citizen or green card holder, this does not apply to you. If you are taking investment income back out of the United States as well, guess what, it doesn’t apply to you as well. Now this is still subject to change and outside there, but right now the big fear of this is not going to be a big issue to you know, with this, because on rental income with this. Now secondarily to that, i’m going to have to give you a list on this some of the other changes of this. Okay?

22:06
Speaker 1
With this there’s a hundred percent bonus depreciation extension which means when you purchase a property, if you do improvements and that kind of stuff with this, you can take that as an expense in the first year should you need to. Okay, that was already in a previous bill, but that has been extended to this. And then there’s what’s called section 179 deduction expansion. Okay? A section 179 expenses. If this qualifies as a business and it’s possible to structure rental property that way, you can take a much larger amount of money as a one year expense. Now most of the time this will be for some type of improvement or replacement with us now generally if you have you buy new kitchen appliances for your rental properties with it, that would normally be depreciable over say three to five years.

22:55
Speaker 1
You put new carpet in, again depreciable over a period of time with the new one. Section179, if your rental meets the right requirements, they all become an expense immediately. And now here’s the thing about this too. Again, there’s incentives to this. If you’re not, if you don’t need that expense as a 179. You take it over the five year period and you keep your positive cash flow over a longer period of time with this. The depreciation over a longer period of time is very nice for you to this, you know. Okay, so let me read some of the other ones here. Sorry, put my glasses back on. Okay. There’s sections enhanced section 199A qualified business income deductions to this. Okay. Means many pass through entities including rental real estate businesses can have certain expenses that are, you know, going to give you this.

23:43
Speaker 1
Now the rate used to be 20%. That’s now 23% opportunity zone renewal. Which means that if you go into a poor area and you buy a rental property with this to it. So an economically challenged area to this, which oddly will give you generally higher yields, rental yields. They will also give you very large tax credits for being and operating inside that area as well. And that’s a bigger issue. There’s also an increase of a mortgage interest deduction and several other things. Now we’re probably going to do another seminar in four to six weeks about that once it passes through the senate and gets a final bill on this. So stay tuned. But for right now there’s not really a bad issue except for one possible issue with this. Okay. And let me find another sheet on this.

24:34
Speaker 1
Okay. There is a, there is a part of this that they’re debating on whether they keep this in or not called discriminatory foreign countries. Under the one big beautiful bill, those incomes, okay. These would have, if you’re subject to the 30% tax to this, these would actually have an increasing tax regimes. If you are a resident of a country that has not yet been named that they put the rules being discriminatory against U.S. Tax rules. That list does not come up with yet to this. You have tax treaties to go to this. However, again, if you get around that 30% tax withholding in the first place, discriminatory taxes should not come into effect. That would only be the case if you choose to not file a tax return on your gross income with this to this.

25:22
Speaker 1
So it would be rare that somebody that I would advise would ever be subject to that tax. And almost none of our clients who have U.S. Rental real estate or not U.S. National pay any U S Tax. Smart planning on this can make you eliminate U S Tax on this to this. And it’s, you know, there’s just, there’s just ways to plan completely around it. It makes this investment, especially with the long term yields of 8 to 10% on rental real estate. Very, very attractive. I’m going to go back to my opening statement again. I’ve been doing this just about 30 years now. I have seen lots and lots of clients and wealthy clients. I’ve seen bitcoin people. I’ve seen people do gold. I’ve seen people, startup companies.

26:07
Speaker 1
There is no more consistent way with minimal risk to build wealth that I know of from experience than owning US Rental real estate. Smart planning on this can maximize your yields and really help you, you know, build your wealth, work and, or increase your cash flow with very minimal tax issues, you know, to it. I think that any more slides to it, oh, we’re all good to this and like I said, we can help you file the ITIN number. We can, you know, and consult with us and we’re good. You’ve got Chris’s email. He’s my practice manager to this. We are located in Bangkok, Thailand, but we operate around the world to this. We’re actually, as far as we know, the largest firm in Asia who specialized in this.

26:58
Speaker 1
But we deal with everything from Australia to New Zealand, Saudi Arabia, Japan, all the way through China with this. We can help you handle this and plan this in a way that’ll make it tax efficient with us. Robert, you want to do questions now or you want to go ahead and wait till your, your scenario is done? You’re, you’re on mute, Robert?

27:26
Speaker 2
Yeah, so we’ll do the questions and answers at the end. Thomas, thank you very much. I know especially when it came to the big beautiful bill or what’s supposed to be passed as that, you know, there was a lot of concern, a lot of questions. But yeah, it seems like from my understanding anyway, that it really won’t affect anybody negatively. They’ll actually be positive benefits if it does get passed.

27:55
Speaker 1
As at this point, we’re still dealing again, we’re still dealing with proposals. It’s a work in progress with this. But you’d have to do things pretty poorly to be subject to that particular tax issue. It’s really the only negative to this. They’re actually trying to give more incentives to build rental real estate in the United States with stuff. So this bill should actually be a net positive for everybody. And I, how do I describe. I can’t conceive of any clients of mine that I would let pay the extra tax with us. It’s just outside, you know, to this, you could do things really poorly and be subject to it. But you should never be subject to a proper planning.

28:33
Speaker 2
Yeah, I absolutely agree. You know and I. One of the things that comes up in almost every conversation that we have, especially for new real estate investors in the US is you know, what are the tax consequences? Is it global taxation if I own real estate? And this is why we, you know, we partnered with an expert like yourself because of all the tax advisors that we’ve worked with since we started this company. And I have to say, and Thomas, thank you for giving kudos to us during your presentation. But you know, back at you guys are phenomenal. You’re, I mean not magician, but yeah, you know, everybody that we’ve referred to you as absolutely satisfied. So, you know, thank you for that. I appreciate it.

29:19
Speaker 1
We try to deal with especially rental real estate to long term relationship. We try to deal with our clients and long term relationships. That’s, that’s our goal.

29:27
Speaker 2
Yeah. So I’ll start our slides and then at the end again there’s the chat bot or chat box within the zoom screen. Please put your questions in there and we’ll address them individually as we go at the very end. So Thomas, thanks. We’ll see you in about 10 minutes for the question and answer series. Okay. All right. So you know, of course we’re America Mortgages, part of Global Mortgage Group. We focus only on providing US mortgage financing for non US residents that’s both foreign nationals, so people without a US passport and US expats. So a general overview of the American mortgages loan programs we are able to do. Purchase loans, refinance loans and cash out or equity release. If you’re a non US citizen not holding a US passport, you can get up to 75% financing in all 50 states.

30:51
Speaker 2
If you are a US expat, then it’s exactly like it would be if you were still living and working in the US you can get up to 80% loan to value. These are of course for investment properties. So properties that you have no intention of living in but you’re going to rent and generate rental income. All of these loans that we offer, especially now where interest rates, although I do think there, if you look at them, I guess over the say a 50 year period, rates are still quite good. But if you look at it post Covid, it’s a little bit higher. So all of our loans are 30 year fixes regardless of the borrower’s age.

31:33
Speaker 2
So that’s something to really take notice of because the US is the only country that has that most Countries have age restrictions depending on the, you know, either the borrower’s specific age or their working age. And that’s where the amortization stops. In the U.S. Regardless if you’re 19 or 99, you cannot discriminate when it comes to mortgage lending. So everybody gets to take advantage of a 30 year amortization. We have a really slick loan program that is a 10 year fixed interest only. It’s a fixed rate for a 10 year period. After that 10 year period you would expect that loan to adjust to whatever the market rate is, but it does not. That rate stays the same, but now you’re paying principal and interest for another 20 years. It is a perfect way to maximize your rental returns.

32:30
Speaker 2
Loan programs Again, in all 50 states we use common sense underwriting. What does that mean? Well, we qualify the properties. If you’re buying an investment property only on the rental income of the property. So if you’re going to buy a building, of course you’re not going to qualify off of your personal income. You’re going to qualify on the cash flow of that building. And that’s how we look at rental properties. From one to four units you can get up to again if you’re a foreign national, up to 75%. As long as the rents will cover the taxes, insurance and any HOA association fees, then the loan qualifies. Super slick program. In the event that say the cash flow of the property does not qualify, we allow foreign earned income and that is both foreign nationals and for US Expats.

33:25
Speaker 2
So of course non US citizens living overseas. US citizens also living abroad. We have all of these programs available. No US credit is required foreign nationals. For US Expats, we would like to see that you have at least a 640 credit score. We do realize that there may be a lot of US expats that have been abroad for many years and no longer maintain US credit. Perfectly fine. We will treat you as a foreign national. The benefit of that is once you do re establish credit, then you can refinance out at maybe a higher loan to value or even maybe slightly better rate because you are a US citizen with credit. So we have a mortgage portal that allows you to securely apply for a loan, send all your documents in encrypted format.

34:19
Speaker 2
Once we receive that, it takes us about 24 to 72 hours to issue you a loan approval. Once you have that loan approval, you can actually go out shopping. So we issue you a letter. Once you find a property that you want, you contact that realtor you submit the letter along with that offer, and that shows that you’ve already gone through the financing process. On average, it takes us about 30 to 45 days to close a loan. You can close and you can open and close your entire loan without ever having to travel to the US So we have a variety of ways to close your loan, to take your application on the portal, and to be able to do the entire transaction without having to travel.

35:09
Speaker 2
One of the things that we are absolutely proud of is 97% of our loan applications are approved. Now, we are a direct lender, but we are also a broker which allows us to be able to normally find you the best rates and the best terms available. And I think what makes us also very unique, and there was a review that came in yesterday from a client, because 100% of our clients are clients just like you. This is all we do. This isn’t like a side business. This is 100% of our business. We know exactly what it takes to get a loan from application to closing for a non US Resident. We had a client that had just, he was in the process of doing a loan going with a broker in the US that thought he knew what foreign national lending was.

36:02
Speaker 2
They got to the third week, one week before closing, and they canceled and turned down his loan. So we came in and were actually able to close that loan within 10 days. So that’s the power of American mortgages. We have loan officers 24, 7 in 12 different countries, meaning that no longer do you need to stay up at midnight to be able to do a call with somebody in New York and try to explain as an example why Hong Kong doesn’t have a zip code. We understand this. This is all we do. Multiple languages, not an issue. So we’ll go through the loan programs. Should probably take five to 10 minutes. And then again, we will have the questions and answer within the chat.

36:45
Speaker 2
You do have the link to set a call with a loan officer based on your timing and also schedule an appointment with Thomas. So this is by far our most popular rental program. And this is the one that I was referring to in the very beginning where we do not require you to provide personal income. Now, I, you know, certainly when you hear that, you think, you know, it sounds a little bit off. But actually, if you think about it is purely common sense underwriting. If the property can qualify and be able to service the debt, the loan should qualify. We have these loan programs that go as low as $100,000. All the way up to 3 million for our own lending purposes. If it’s above 3 million, we have options as a broker.

37:40
Speaker 2
Now the way this works, if you look at the bottom of the slide and to make it simple, as long as the rental income and we get this number not arbitrary, it’s a number that we either get from an existing rental agreement or we get it from the valuation or the appraisal. Once ordered, we order a supplement to that and it gives us an average of rent. That is the amount that we use to qualify. So as long as it qualifies on a one to one basis, then the loan works. Say for example, it does not qualify, it does not mean that the loan is not approved. What it means is maybe you just have to come in with a little bit more money or maybe you just have to switch to an income loan.

38:28
Speaker 2
So if you are a US expat, super popular program as most US expats have probably experienced applying for a loan and if you go to the standard local American banks, as soon as they find out that you have foreign earned income, it’s pretty much a no go. And this is what happened to that particular client. What makes us unique, the issues that you would have with a US bank, foreign earned income, no W2 etc. That is not an issue with us. Again, 100% of our clients are our clients just like you. So our loan programs are absolutely specific for this. So you do have to provide two years of tax returns. Absolutely. Perfectly fine. You still need to maintain US credit but you do not need to have a W2. And foreign to earned income and foreign bank accounts are absolutely allowed.

39:26
Speaker 2
So on this loan program the minimum loan amount is $150,000 with a maximum loan to value of 80%. This works off of a debt to income ratio. The debt to income ratio for this program is 43%. It’s based on being able to service your debt in the country that you’re living in and also be able to service the debt if it’s a. If it’s a non rental property in the US if it’s a rental property it normally should offset it. So self the AM Student plus program. You know certainly this a something that everybody is a bit concerned about as the announcements have come out about certain schools or visas that are not being approved foreign students. Although my personal opinion is I think this will blow off before school starts.

40:21
Speaker 2
But if you do have a child that is attending a school in the US and you want to be able to buy a property. This qualifies as a loan program that we look at based on the cash flow of the property. Now even though your child is living there, this loan will qualify based on what would be the rental income of the property. So very similar to the AM Rental coverage Loan. It’s a very slick, easy program. The minimum loan amount on this is a little bit higher than our average. It’s $150,000. But it also again works on a one to one basis with the rental income. AM Investor Plus.

41:05
Speaker 2
Now, in the event that your property may not cash flow, say for example, once you get over a million dollars of a purchase, or even I would say $800,000 on a purchase, it does become a bit challenging, except in certain markets, maybe California and New York, to be able to get sufficient rental income to be able to service the debt on a one to one basis. And maybe you don’t want to come in with more money. We have a loan program that allows you to qualify using your foreign income but without using your foreign tax returns. As you can imagine, we’re doing loans all the way from Stockholm to Sydney to Singapore. If were to use tax returns, it would become very difficult. So how this loan qualifies is if you’re self employed, we want a letter from your accountant.

41:58
Speaker 2
If you’re employed, it needs to be a letter from your employer on the letterhead. And what it needs to state is two years of your income and your current year to date income and that’s it. There’s no requirement to have your tax returns. Translated this is sufficient enough for income. It does obviously work on a debt to income ratio. So the same thing as a US citizen, which is 43%, but it’s a very slick way to allow you to qualify for larger transaction loans without using your actual tax returns. Minimum loan amount on this is $150,000 up to $3 million. And again 30 year fixes, regardless of age on all of these loans.

42:43
Speaker 1
If.

42:43
Speaker 2
You are a high net worth client. And when we originally started actually Global Mortgage Group, which you know, evolved into American Mortgages, were dealing with a lot of private banks. A lot of private banks, as you’re likely aware, do not offer us mortgages. So were getting a lot of referrals on this and the biggest question was my client, you know, has taxes in multiple jurisdictions, very complicated, or maybe they don’t show exactly what they’re debt servicing ability is. So on these loans, rather than asking for tax returns or you know, an income letter or Qualifying off of the rental income, we go off of the asset statement. If you have sufficient cash bond stocks in the bank where we can qualify you on based on two months of the average balance.

43:33
Speaker 2
And how we look at it is we take it divided over a minimum fixed period of the loan. On average it’s five years. So we would take that portfolio and we would average the income say if you have five years over 60 months and that is the amount that’s used to qualify. The beauty of this is there’s no encumbrance on those assets meaning that say you’re using cash or stocks or bonds in order to qualify. Once the loan closes, you can trade it, you can sell it, you can do whatever you choose. There will be no charge on it. The only charge of course, just like any real estate would be first position on the property. These are for loan amounts from $3 million and we’ve done them as high as 100 million. Any questions on this? You know, feel free to reach out.

44:21
Speaker 2
So this is our contacts. You can scan our QR code. You know one of the things that is very unique and I think you’ll see it in the chat as well is we have a 24 hour phone number. So you can call that number 24 hours a day, seven days a week. It rotates to the loan officers that are in a 12 different countries. Somebody will answer and they can help you in your time zone and likely in your language as well. So that is it. Thomas, if you want to come back on we can start the questions and answer.

44:57
Speaker 1
Should be able to hear us loud and clear now.

44:58
Speaker 2
Yeah. Okay. Okay, let me pull up the chat here. Okay, so what I’ll do is I will go through these questions. I, if it’s pertaining to you, I’ll ask you to answer. If it’s pertaining to me then I’ll, I’ll take it. So first question. Are some states better for rental property than others?

45:27
Speaker 1
Wow.

45:27
Speaker 2
That’s I think on a tax basis. I don’t know if it makes any difference but you know, feel free to answer and then I’ll discuss the loan.

45:35
Speaker 1
Actually it makes a tremendous difference with this. It’s interesting that you mentioned New York and California. They have amongst the highest individual tax rates to us as well as the lowest. Sorry as the most regulations against taxations and you know to. They also have the most disallowance of potential deductions as well. Now there are states that are, you know, have no income tax even you should get in a taxable situation on this stuff. Two of the, two of the most favorites are Florida and Texas to this and I’m a Florida native with this and Florida is a wonderful state with this, but there’s some insurance issues. So honestly, you know, me particular, I’m looking at two states. The other is Nevada.

46:26
Speaker 1
So, you know, when I’m looking at rental real estate for myself, I’m looking in, you know, in the San Antonio area where your head office is and around Las Vegas and Nevada as well. Both have very large migration patterns into them and very positive tax implications on them as well. So those are the two states I prefer.

46:45
Speaker 2
Yeah, well, I mean, a great answer. And I actually, I mean, I should have thought of that before. I. When it comes to lending, it doesn’t make a difference to us because lending all 50 states, you know, there are certain states that maybe, you know, there’s certain restrictions on how you lend, but absolutely, it doesn’t matter to us. But you know, you may, if you’re considering which area to buy in or which properties to buy in, you may actually want to, you know, reach out to Thomas first and get an idea on the taxes. So. Okay, next question. What happens if I want to sell my property? I’m assuming that is a tax question.

47:30
Speaker 1
Yeah, that comes into the earlier question on this. You know, and I mean, and it is possible to sell the property to this. You’re not going to have the greatest tax situation. You’ll lose a fair amount of your gains if you go to sell this in a straight up way to do this from a tax wonk standpoint. The way to do this is though, if you’re looking at taking your initial equity out or even more equity that you built up over the years, the best way to do this is to call Robert up and actually just refinance the property. Take the equity back out of your initial investment or and plus gains to this and you still own the property. You still own the property for continue to appreciate over the future years with us by then.

48:11
Speaker 1
This is the other side of this too. Rents increase year by year in the United States as property values go up, rents increase as well. You’re going to find very few investments that you can sell the investment for your initial thing on take the money back out of it using a note. And yet your dividends, that is the rents continue to increase year by year. It’s the reason you want to do this. Now should you choose to not refinance but you know, say you’re tired of that particular area or that particular state for some reason, you can do the 1031 exchange and have no tax consequences. It’s just a matter of steps to go in and properly identify the new property. The money, the money taken out of the first sale has to go into escrow and go into the new sale straight.

48:56
Speaker 1
But it’s possible to do that as well with it. So, you know, you can. Selling is not the greatest aspect the way to do this from a tax efficiency standpoint, but there’s ways to take your money out and help yourself as well to those.

49:10
Speaker 2
So a question, Thomas, though. When you have depreciation and you’re taking the depreciation over a period of time and with proper tax planning, and I know you talk about this all the time, that you can actually not only not pay taxes, but you can show a loss every year based on whether it’s depreciation.

49:31
Speaker 1
That’s, that’s the basic idea of cash flow positive and tax flow negative. Now say you are getting an 8% yield off the property to this, okay. And your mortgage interest and everything is coming in. Right now we’re at a higher mortgage interest rates. We’re also getting higher yields. So say you are even after the mortgage interest making 5 and a half, 6% to this after your expenses. You know, you’re going to use the depreciation and your other expenses to kick that down to almost no income to a pot negative income. But the reality of it is your bank account is still going to be getting a check to it. Because while you’re taking the expense on that depreciation at roughly about 4% per year, that’s not coming cash out of your pocket.

50:16
Speaker 1
That 4% a year is coming back to you as real cash with it. It makes a big difference on how you deal with mortgages and stuff. And now one of the things about this, right now we’re at a higher interest rate to this, you know, and weirdly, that’s because that’s helping you get a better price in the United States on rental properties to this because it’s all about our yields. Now what you do in this situation is you just refinance in a couple years because you’re going to save 50, 100, $200,000 depending on how much property you buy right now. If you refinance in a couple years, your interest rates goes down, your cash flow gets even better to this planning makes all the difference in how you do this. It makes it Again, cash flow positive.

51:00
Speaker 2
Yeah, absolutely. And you know, we always recommend people to speak to a tax advisor even before they start investing. The one thing that, again, this is besides the long duration of the long amortization period for US Loans, regardless of age, is there’s no restrictions on the amount of properties that you can own with the maximum loan to value. So, well, as you were saying, you can pull out up to 65% if you’re a foreign national, up to 75% of your US expat of equity out of your property. And then you can turn around and use that money and get a, if you’re a foreign national, 75% loan to value or a U.S. Citizen, 80%. And you can just continue and continue to do this to where you had discussed in your presentation.

51:48
Speaker 2
You build up a massive portfolio to where you’re sitting pretty by the time you’re ready to retire.

52:27
Speaker 1
Exactly. It’s a great way to build wealth. I always refer to it as daisy chaining, especially if you’re in your 30s or early 40s. Buy one property now, in five to six years, refinance that property, get another property and by the time you are 60, 65 retire you can have four or five or six rental properties that are giving you a very nice yield because the rents don’t stay fixed, guys. They go up year after year to this. It’s a real nice way to build wealth.

53:11
Speaker 2
I absolutely agree. Okay, let’s get on to the questions here. I’m already pre approved for a loan with you guys. Any help in finding a property to buy in the usa? Super good question. And this was something that we had struggled with for the longest time. A lot of people that we dealt with, a lot of our clients were initially surprised if they could get a U.S. Mortgage, but we’ve had the difficulty of now where do I find a property? So we recently partnered with a new group called New Zip and you’ll be able to see this in the center portion of our website. But news that similar to us where they work with foreign nationals and similar to you, Thomas, where you work with, you know, U.S.

53:11
Speaker 2
Citizens and foreign nationals, they will match you with the perfect Realtor in the location that you want to find a property in. And the beauty of this, if you use New Zip Realtor to find your property and use American Mortgages to close your loan, new zip will give you a 50.50%. So basically 50 basis points of a credit that you can either use to, you know, for your closing costs you can use it to buy the interest rate down or you can even take it as cash in the bank at the end of closing. So if you have any questions on that, please reach out to one of our loan officers. They’re very versed on new zip. Now next question. This would be for you Thomas. Can you handle both U.S. And Canadian cross border taxation?

54:05
Speaker 1
Yes and no. I mean if it’s a US citizen to this we can certainly handle it. In the Canadian issues we actually work with a very articulate and good Canadian tax attorney here in Asia who helps out with all these issues as well. To this Canadians have very specific stuff. So. Yeah, well we don’t do that in house. We have somebody we work with who specifically handles all the Canadian issues to this, especially living overseas and residents and stuff. We can help out with that as well.

54:35
Speaker 2
Perfect, thank you. So I think on that probably best to reach out to Thomas and yeah.

54:41
Speaker 1
Just give us a call and we can refer you to the right in the right direction.

55:02
Speaker 1
The cost of doing a tax return in the US each year and number two, is it preferable to hold a property in an llc? So you want to answer one and I’m happy to answer two.

55:02
Speaker 1
It can vary depending upon the type of rental property to this. Most of the time that we’re dealing with a non resident alien and say it’s a one apartment to this it’s about a 600 a year charge to handle the 1040 non resident tax return to this. So it works out really well. Now if you’re going to only own one property with it, from an LLC standpoint to this it’s generally not worth the cost of having the llc. Most of the LLC advantages are not taxed because the tax flows from the LLC straight to you as an individual to this it’s not really tax saving. However, what you can do is you can isolate liability to this. So should you own a large number of properties in the U.S.

55:50
Speaker 1
You know, in one tenant does something stupid and say your one tenant burns down the duplex and your other tenant on the other side dies, passes away, he’s not going to go see that tenant. He’s probably, he may go after you do this and have a difficult issue, especially if he sees 20 rental real estate properties. However, what you would do in that particular case is own each or a couple properties in an LLC in that area and lower your liability. Most of the llc, in fact, it’s called a limited liability company. That’s generally the biggest benefit of it is it allows you to do that. Now there are some estate tax issues as well that can help you out as well.

56:29
Speaker 1
So if you get a lot of these too, because the LLC can have an unlimited lifespan unserved person, so you can escape estate taxes as well if that becomes an issue. So there are some things but it’s a mixture of yes, no and maybe whether that will benefit you if you’re in that situation. You want to know about an llc, give us a call back and we’ll give you a specific thing on this. Again, we do an hour consultation with no charge. You know, for you because you’re American Mortgage referral.

56:56
Speaker 2
Yeah, I think going back on the llc, we can do a loan in either individual name or we can do it in the entity in the llc. And I think a lot of people like you said, besides the various tax advantages, but people put it in an LLC to protect their personal wealth. You know, if you get exactly. You’re only suing that llc, you’re not going above it. So.

57:21
Speaker 1
Yeah.

57:22
Speaker 2
Next question. What do you think of Houston Multifamily Rentals and San Antonio Multifamily rentals? I have 1 million Canadian liquid as a down payment. What’s the most that I can leverage to this would be for me?

58:08
Speaker 1
I’m all in for. For Houston on for tax purposes.

58:18
Speaker 2
Next question. For the rental coverage program, how do I show a property’s projected rental income? Will America Mortgages help? That’s a very good question. It comes up a lot. So if the property that say you’re buying a property or refinancing a property and has an existing rental agreement, that is what we will use if you’re buying a new property. So the property does not have to be tenanted 10 to tenanted when it’s closed or when the loan closes, but we will do another evaluation alongside of the appraisal. But that valuation is only coming up with the average rental income for that type of property. That is what we will use to qualify if there’s no rental agreement in place.

59:07
Speaker 2
You know, it’s because the US appraisals and valuations are all done through a third party where there’s very little input that they have from us where matter of fact, we’re not even allowed to talk to the appraisers except for to address certain issues. But it is a very accurate number of what the rental income will generate. Next question, tips to manage taxes. If I own multiple US Properties, contact Thomas.

59:40
Speaker 1
I think that’s one of the wackier things about this is, you know, especially if you’re living overseas, you get a tax deductible trip to the United States to view your rental properties to that’s a valid expense off of your rental properties to this. So you know that including hotels and food and travel for you as the owner of this property with us. So you know, and yeah, it, you know, certain expenses can be spread amongst multiple units and sometimes to this. But you know, yeah, we help out with that. You do, you do have to file multiple state returns if you’re in a different state to this, even though you don’t, you may not owe any tax to it. So a lot of times, especially in Florida, Nevada and Texas, your head just, you just don’t have that fee with it.

01:00:27
Speaker 1
But you know, we can help you know, schedule all the different taxes across expenses across those different rental properties with it. One of the things about this too is a very good property manager and I know Robert has a list of those as well will help you dramatically, you know, to this they should give you most of your expenses very specifically line itemed out to it as well. So most of your accounting work is done by your property manager. We handle the tax side and make sure you’re efficient as possible.

01:00:55
Speaker 2
Fantastic answer. Next question. Can I reduce the tax I pay on rental income? Well, this is exactly where you come in.

01:01:04
Speaker 1
Yes. I mean especially you know, with it and you know, we have this conversation inside the office on a regular basis we do with rental properties. And we had a gentleman come in who they wanted to go buy a very expensive property in Boston to this and very wealthy individual, rather famous individual. And were like, you want to finance this property with this because your rental yield is going to your depreciation is not going to cover your rental yield on this, but you can do this and instead of coming up with a million four, which was what this condominium cost, come up with the $400,000 off this thing. It’s going to continue to grow year after year by net asset value to us and let the rental yield, the rent itself, pay off the mortgage interest on stuff, debt, depreciation, all those things are.

01:01:56
Speaker 1
And other expenses are really the way to lower that taxation. And even up to this and saying, I’m going to go once a year and view my rental property as the owner of this. That’s generally a deductible expense. So, yeah, proper planning. Give us a call and we can help you figure out the ways to lower to know, negate your taxation issue. My favorite saying about owning rental property, cash flow positive, tax flow negative.

01:02:24
Speaker 2
Absolutely. And I’ve sort of picked up on that as over the years, if you said this. But you know, I will say that all of the clients that we’ve had that have dealt with you have paid no income tax on rental properties. So again, the proper tax planning, I think especially there’s this misunderstanding of taxes in the US as soon as somebody thinks taxes, oh my God, it’s going to eat me alive. In the US Especially when it comes to real estate, it’s the exact opposite. Especially when you compare it to Australia or the uk which is a nightmare. Taxes.

01:03:04
Speaker 1
My camera just fell.

01:03:06
Speaker 2
Thomas, you okay?

01:03:07
Speaker 1
Yeah, yeah. I will turn the camera off though, so you’re not looking at the floor, but all good.

01:03:14
Speaker 2
Okay, let me go to the next question. Hold on, let me go to it. Let me go to a mortgage question. While Thomas is recouping himself here.

01:03:24
Speaker 1
I’m, I’m still good with it. Just had to turn the camera off.

01:03:28
Speaker 2
Okay. All right, next question. What happens to taxes when I sell my US Property, do I have to pay capital gains tax?

01:03:38
Speaker 1
Yeah, this is the ultimate reason why, you know, the other than cash flow positive, tax flow negative, the other rules is never sell US rentals real estate. You will pay, you will pay capital gains tax at 15 depending upon value, can even go up to the about 20%. Now with the net investment tax issue to this and you get subject to remember that depreciation that’s coming in at about 4% per year comes back to you at income when you sell the property with this. So yes, it’s possible to do that. But if you’ve owned a property for say 25 years, we have a lot of People who do that do this, almost everything you paid for the property originally comes back to you as income.

01:04:22
Speaker 1
With this, generally you are far and ahead to refinance the property, take all the cash you want out of the property, do whatever else you want to, and continue to own the property and, or do a Section 1031 exchange where you buy the property, you sell that property, you identify another property and there’s no tax whatsoever when you do what’s called a like kind exchange with this. So smart planning should prevent you from having to go in and do that.

01:04:54
Speaker 2
Yeah, and I, I agree with you. I think when it comes to US Real estate investing, obviously listen to the experts, listen to us, that again only focus on, you know, clients just like yourselves. And, and also, you know, with Thomas, I think if you follow the expert advice, you’re going to have an absolutely amazing experience owning U.S. Real estate. Next question. Will owning a U.S. Property in an LLC lower my taxes? Thomas?

01:05:26
Speaker 1
It’s possible, but the benefits, the benefits of an LLC are generally not tax savings. They’re other than possibly estate tax. You know, if you pass away with it, most of the time it’s a liability issue of making sure your tenants cannot potentially go after any assets you have anywhere. To us now if your assets are generally outside the United States, the US Court can’t attach them anyway with this, although there are exceptions to just about everything with this. But most of the time the LLC is really done as a way to isolate liability, not a tax savings in.

01:06:03
Speaker 2
The U.S. Okay, next question. And this would be for me, I’m a self, I’m self employed in Dubai. What documents do I need to get started with a mortgage in the U.S. Well, if you’re buying a property as an investment property with no intention of living in it, then it’s quite a simple process. You need to do the loan application, which is done on a portal. Very simple. You’re just answering questions and the application is filling in the information as you go. You’re going to provide your passport, you’re going to provide two months of bank statements. Foreign bank statements are perfectly fine. What we want to see on those bank statements is that you have the down payment and you can cover any costs that are associated with the purchase. And really that is it.

01:06:54
Speaker 2
Once we have that, we’ll run it through our underwriting, which obviously is quite simple, and we’ll issue a pre approval letter. Next question. Can I apply for a mortgage jointly with my spouse? If only one of us has income yeah. And well, there’s two ways you can go. One, you can apply for the mortgage with your spouse if you choose or you can just have the spouse on title either. If you’re buying it as an individual and not in an entity, then you can, you could be the mortgage, the person on the mortgage and then your wife could also be on the title of the property with you. If you’re using an llc, then you can both be members of that llc.

01:07:41
Speaker 2
If there are, there is a certain percentage threshold which is, you know, needs to be required when it comes to the mortgage. But the short answer is absolutely yes. So there’s another question which is in the other chat but it says very informative call. What about short term rentals? Intending to buy a property in the US to periodically stay there but rent it on a short term basis. What I would do on that is we do have programs for like Airbnb. I would contact one of the loan officers and discuss exactly what you’re looking to do, how much time you’re willing to spend on it and then we can structure a loan around that requirement within the chat group or within the Q and A.

01:08:31
Speaker 2
And on the chat there actually is a link that you can schedule a call with one of the loan officers 247 or you can speak to one of Thomas’s team and as Thomas had said, because you’re a client of America Mortgages and he has a free consultation for one hour which I believe Thomas is probably at least a couple hundred dollar value. So.

01:08:53
Speaker 1
Yeah, yeah. The one thing about that is if you do use a rental property for more than two weeks a year for personal use with this, you lose the depreciation cycle on this. So personal use can adjust how you deal with a rental property. To us it’s not the most onerous thing in the world times especially if you’re going to use it in a nice area like Orlando, Florida to this you can go spend several months and let the rental property pay for itself the rest of the year with. And that’s what a lot of people do in a vacation spot. They’ll go own the property to this, use it for several months but it’s not quite as tax efficient as it would be otherwise.

01:09:33
Speaker 2
Fantastic. Okay Thomas, I think that is all the questions. I want to thank you again always for joining us for the webinar. We really appreciate it. I don’t know if you have any final sign off words.

01:09:46
Speaker 1
Yeah, I mean I apologize for my camera falling to this. You know, give us a call if you’ve got question tax questions about, you know, rental property in the United States. You know, it’s, I’m an advocate over this. As I’ve gotten longer and this is a career with it you really can build wealth. I mean a friend of mine many years ago said buy a lot when you’re young with it. What he meant was not buy a lot of things, but buy a piece of property a lot somewhere to this and that will appreciate considerably to this.

01:10:20
Speaker 1
I have a small piece of property I bought for my oldest daughter in Florida many years ago and it is now appreciated tremendously with this rental property allow is even better because you can keep the income flowing and stuff, but you can make a lot of money and rent real estate and rental real estate. Man, United States. Yeah, excellent.

01:10:43
Speaker 2
Well, I, I, I want to thank everybody as always for joining our webinars. This, there will be a recording of this sent out. So if you have missed something, it takes about a week to go through the production with our team, but it’ll be sent out to everybody that has signed up or has joined the webinar or people that maybe couldn’t have made it. We have maybe a hundred webinars that are on our website. So if you have any questions on u. S Real estate related, you can go to our YouTube page and you’ll be able to follow that on, you know, an ongoing basis as the webinars come out. The next webinar and for that person that had asked about finding a property in the US Will be with one of our partners called New zip, which will be a property matching service.

01:11:32
Speaker 2
So with that said again, thank you everybody. We really appreciate your business and your time on this webinar today and we look forward to seeing you on the next webinar. Thomas, thank you again. Thank you very much everybody. Good day or good night.

01:11:57
Speaker 1
It.

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Disclaimer: This transcript is AI-generated, so kindly pardon any transcription or grammatical errors that may be present.

14:02
Speaker 1
Hello. Hello, everybody. Good to see everybody again. See some friendly faces and names on the screen. You know, there’s a lot of stuff happening in the world I think, you know, what I wanted to do is reach out to our, what I wanted to do is reach out to the audience and let everybody know what we’re thinking about the current in real estate investing environment, especially with respect to the tariffs. Now I’ve been speaking at a lot of events about this subject. What I’m going to do is lay out the framework of my thought process and then we’ll go into a short presentation with about, you know, 10 or so slides and then we’ll, we’ll finalize, we’ll end with some Q and A. You know, the tariffs have caused a lot of uncertainty, myself included.

15:01
Speaker 1
I think we’re all kind of waiting to see what will happen. But, you know, what’s important to note is that. This is Michael. Matthew, I see you. Can you turn the video off? Hi, Matthew. Can you turn your video off? So what I wanted to do is, you know, everybody, there’s a lot of uneasiness, but what I wanted to accomplish is talk about US Real estate investment as an asset class. Now, just like investing in stocks or other asset classes, you know, we are conditioned to have certain biases, but it’s important to remove the emotions, look at the facts, and make our decisions according to the facts. And what I want to accomplish today is lay out the foundation of why I think U. S.

15:56
Speaker 1
Real estate investing is actually the, one of the best, if not the best assets to invest in because of certain fundamentals that are undisputable. So on the next, you know, when I go into the presentation, I’m gonna show you some slides that prove the fact that this could be not a better time to start investing in real estate because the supply demand landscape is so dislocated that people who can afford to make these investments are going to better off over the long term. Now what makes the US Better than any other real estate investment market is that it’s the only major country and economy that gives you double digit rental yields plus capital appreciation potential. Now everybody’s thinking, well, you know, these tariffs, you know, is it bad for the economy and all these type of things?

17:00
Speaker 1
And, and quite frankly, I guess we’re seeing some of that. There’s a lot of uneasiness. But I’m just going to tell you one thing. In 2000, and I’m going to show you these charts. But in 2022, literally the worst thing that could have happened to the real estate market was that interest rates went from 0.25. These are fed funds rates went from 0.25 to 4 in a year, and in that year, home prices went up 10%. So my point being is that we’ve seen the worst. And I’m going to. Over the next few slides, I’m going to present the case that structurally, US Home prices are going to be forced up and so are rental yields. And I’ll go into the reasons why and, you know, the tariff situations. We can talk.

17:50
Speaker 1
I’ve done quite a lot of, quite a bit of research on this. I talk about, you know, tariffs and how it impact economies, you know, in private events. However, this presentation is about how it affects the U. S. Real estate market. So with that said, I’m going to go into the slides. Hopefully this won’t be too boring for everybody. So here we go, the first slide. Okay, so this is going to be a contentious, you know, thing I’m going to say, but, you know, the old American dream was you work hard. And this dates back to, you know, the baby boomers, right after the war. You got a job. It was, you know, you were the first to go to big cities to get a job.

18:37
Speaker 1
And, you know, your dream of having a family and owning a home, that was the definition of the American dream. Now, the American dream, that specific definition, I’m going to argue is dead. The opportunity. And, you know, I think it’s really important that when you’re investing, you got to take off your hat for primary investment and look at this as just a pure investment. And so, you know, the folks in America that are looking to, you know, work hard and own a home, it’s really difficult. And I’m going to show you some statistics to prove that. But the new American dream, I will argue, is that instead of owning a home, you may rent.

19:23
Speaker 1
And that’s good for us as property investors because, you know, part of, you know, we’ve all heard of the Maslovsky, you know, five basic needs, and one of them is you need a roof over your head, you need food and all that kind of stuff. But so we’re slowly moving into a world where more Americans are renting, and that’s not slowing down. In fact, 12% Americans are currently renting, and that’s increasing significantly year on year. But the new American dream is that we now have more avenues to make money, right? So while we may not be able to own a home, there’s different avenues to make money. Whether you’re trading, you know, trading crypto or trading stocks or, you know, you’re advertising on TikTok or you have your own YouTube channel or you’re selling things on Amazon, whatever it is.

20:07
Speaker 1
Those types of ways to make money didn’t exist when I was growing up. When I was growing up, you worked really hard. You worked at a company for 20, 30 years. You have a pension, hopefully you were able to buy a home and you make some good investments and then you retire, then you move to Florida and you play golf. That, that is being redefined now. So the next slide is, the next few slides are going to show this. All right, so this is factual, right? So you know, you can Google this on your own, you can use ChatGPT. But the bottom line is that there is a massive home shortage in America. You know, anywhere you read it’s between 5 to 7 million home shortage.

20:48
Speaker 1
Now of course, you know, you’ll read some doomsday, you know, things on media like Florida, home prices are collapsing or Austin. But these are, you know, you have to do your research. Like during COVID people in California wanted to move to a state and to a city that looked more like San Francisco. And that was Austin, Texas, one of the most beautiful cities in America. But you saw a lot of buildup during COVID and now there’s a little bit of oversupply. The sun pockets of Florida are like that as well. But when you’re investing, you should do some research and I’ll go into some, some tricks on what, how I look at things. But you see here, we’re headed toward a landlord friendly era. This is, this is the Wall Street Journal just two months ago.

21:31
Speaker 1
So you’re going to see more of these anecdotes in the news. And I want you to pay attention to this because this is the mass market slowly coming on to what I’m about to present. There’s a lack of housing and guess what, that is actually not going to improve anytime soon because if I’m a homebuilder and I have to buy an electric drill and saws and screwdrivers, well, they’re all made in China and they’re twice as more as expensive. Most of the lumber that comes to that is used towards homebuilding comes from Canada. 70% of lumber for homebuilding comes from Canada. These are all things that are going to create no rush to go build homes, making this supply issue even worse for people looking to buy primary homes.

22:25
Speaker 1
It’s really good for us because we want to be in a market where supply isn’t increasing. So as a buyer of homes, you buy now, because of lack of supply and increased demand, prices go up, which I will show you factually in the next few slides. Now here, this is literally probably the most important slide. So if you can see my cursor here, this is 2022 fed, the blue line fed funds went from 25 basis points to 4% now. So that’s a 400% increase in fed funds rate which coincided with mortgage rates. Now if you didn’t look at this chart and I told you, what do you think home prices would have done? You would have said, oh my God, home prices would have collapsed. But in fact, if you look at the red line, they increased. Why is that?

23:20
Speaker 1
Because of the lack of supply. Now you look at what rental yields have done, they came down a little bit and they’re steadily going up, right? And you can think, you see the difference between the green line and the blue line. Well, that’s your profit. One’s a mortgage, I mean all things being equal kind of a mortgage rate. Actually the rental yields, that’s 2024, they’re higher now. But you know, you think over the long term mortgage rates are going down, rental yields, you see the trend, it’s going up because of lack of supply. And now here’s this little blip. This little blip was 2022-23 when you had like a mini three month banking crisis with FTX, Silicon Valley bank and Credit Suisse, all things disrupting the market. Home prices fell marginally 8% down and now it’s holding steady and increasing.

24:15
Speaker 1
So my point being, the point I’m trying to make is that we’ve seen almost the worst thing that can happen to home prices, which is mortgage rates increasing dramatically, and yet home prices are increasing. Now here’s a, something that, you know, when I say the American dream of owning a primary residence is dead, this is what I mean. The, the most commonly accepted ratio is that the, your salary should be three times, sorry, one third of the home that you’re trying to buy. Now the average home price, median home price in the US is 420,000, say 400,000, and the average salary is 60,000. So it’s either home prices drop 50% or salaries double, which ain’t happening, right?

25:16
Speaker 1
So this situation is so out of whack, which means the US is slowly moving into a world where they’re forced to rent and they’re going to get used to that concept. In fact, most of Europe rents So it’s a tough situation if you really want to own a home, to live in as a primary residence and build your family in the US but as a person like you, me and our audience here watching, you want to be a. This is a perfect situation to be a property investor. Now look at this. So under three is considered affordable in terms of primary. In terms of your home price to salary, 3 to 4 is moderately affordable and everything else is unaffordable. Look at the next slides. This is state by state, which means the only state in America which is considered affordable is West Virginia.

26:16
Speaker 1
The average home price is 155,000 and that median income is 52,000. You look at all the orange ones, which is some, like, moderately affordable. Kentucky, Louisiana, Mississippi, Arkansas, Ohio, Oklahoma. Now, you know, so there’s a, there’s a balance, right? So if, you know, and I’ll go into what makes the US really unique in terms of how it gentrifies. So these are some of the things that you want to look at, right? I mean, do you want to buy a home for investment purposes in California, which is totally unaffordable, or you want to look at some of these areas? Because if I’m a family in California and I say, honey, you know, it’s too expensive to live in California, let’s move to another state and let’s start fresh, right? I’ll get into some of this in further slides.

27:10
Speaker 1
These are some of the things you look at. You know, these are some of the ratios that you look at as a family to say, to determine where am I moving to? Obviously, you want to go to where there’s good school districts, there’s low crime, there’s abundant employment. But you also want to look at this if you want to own a home, these type of ratio. Now, you know, I’m, you know, hosting this webinar from Asia. But, you know, the US Regardless of, you know, what’s happening in the media over the past few years, is that it’s still a place where people want to send their kids to school. You know, if you’re outside the U.S. So all of our clients are living outside the U.S. Education is the primary reason why people buy properties in the US for investment purposes.

28:05
Speaker 1
And that’s not to say, you know, they want their kids to stay there or whatnot. It’s usually they would have gone to school in the U.S. Maybe they have a family member that lives in the US They’ve been to the US and wouldn’t mind their kid going to, their child going to university there, whatever it is. This attraction that education in the US provides is a real magnet. And as you can see, last year overseas international students were over 1 million. And that’s a 7% year on year increase. And that’s still, you know, increasing right now. Next slide. So this is super interesting. You know, the US gentrifies better than any, any other country, period.

28:48
Speaker 1
You know, if you’re working in a services industry in Sydney and it’s too expensive and Sydney is really expensive, it’s one of the most unaffordable cities in the world, you say, well, let’s move to Melbourne because home prices are less and you get a similar job, similar income. But then prices go up and you’re like, well that, you know, it’s getting, it’s honey, it’s getting expensive. In Melbourne you start to run out of cities to move to. You can go to Perth, Brisbane and then where do you go? Right, if you’re in London and you’re in the services industry, are you moving to Manchester or Tottenham or other cities? And it gets really difficult. But in the U.S. In fact, one of the most famous brands in the US is a brand called U Haul.

29:32
Speaker 1
Everybody knows of this brand and this was a brand that was started after the war where people could move around to different states. So if you can’t afford to live in California, you rent a U Haul, you put all your stuff in it and you drive to Texas and you start fresh. So my point being is that gentrification and state to state mobility is in the DNA of Americans. So while most of our audience are not Americans, we want to make our investments in states that attract this gentrification. So it’s usually cost of living, employment opportunities, you know, better schools for my kids and actually, you know, and availability of financing. You know, I want to be able to move from California to Texas, but I still want to be able to get a mortgage.

30:25
Speaker 1
Well, that, you know, financing is abundant, you know, in the US and you know, for us we’re a U S bank, so. And all we focus on is people like you in the audience who want to take advantage of this real estate opportunity and with leverage you can enhance your returns, which I’ll get into towards the end of this presentation. But the way the US is formed, you know, many of the cities are on a grid base for, for this reason that it’s, it allows cities like Dallas, Fort Worth and La to, to expand outwards. Because after the, you know, when us first started, they knew that gentrification was important and they created, you know, most cities, large cities on a grid formation that allowed for urban formation. But, but more importantly, it has a culture of migration. I’ll give you an example.

31:18
Speaker 1
So these are the top 10 states that saw the highest population increases. Okay, Texas, North Carolinas, Florida, Tennessee, Georgia. So these six states are what we call the southeast corridor. Did you know that in the southeast corridor are building nine EV factories, each hiring between 2 to 9,000 people? And so, you know, if I’m moving from New York to Texas or California because it’s too expensive to Texas or to Florida, I’m thinking, where can I get a job? Google that. On, on, you know, search for that on Google and you see these states and then, you know, families will do their own research. But what do these states have in common? Well, just looking at it, I, I know that Texas has no state tax, Florida has no state tax. But to me it looks like it’s cost of living. Right.

32:19
Speaker 1
So next slide these. So if I’m in these states and I want to move, I look at these things. What’s income tax? Well, look at Wyoming, Alaska. Well, maybe we’re not going to move to Alaska, but Florida, Tennessee, Nevada, Texas. What I’m trying to say is as an investor, I want to do homework because I want to front run or preempt what these people who are immigrating to the states, why are they moving there? Well, they’re obviously moving there because cost of living tax is a big component of this. So as you can see, Texas comes up on a lot of screens because there’s no income tax, state tax, sorry. So another thing, you know, you look at the CHIPS Act. So CHIPS act was Biden’s one of the former President’s initiative to bring back manufacturing.

33:14
Speaker 1
The Chips act is earmarked to hire 500,000 people over the next 10 years, direct and indirect. And Donald and our current President Trump’s Stargate is set to hire 100,000. So total 600,000 jobs. And here’s a small snapshot, Arizona, TSMC. So this was the Chips Act. Billions of dollars of funding, 30,000 hires, you know, as you can see, you know, hundreds of thousands of people looking to be hired. So it’s not just the people in the plants building the semiconductors. There’s going to be coffee shops and dry cleaners and restaurants and these are the indirect jobs that are hiring and you know, we have some clients that do this type of homework, right? They, they look to buy single family homes within 30 minute drives from intel factories. And man, you should see some of the gentrification of these cities.

34:15
Speaker 1
I mean, these cities look like slums. And now two, three years later, you wouldn’t be able to tell the difference between Austin and these, some of these areas. Next slide. Now, as a property investor, you want to do a little bit of homework and see where are people moving to. But are those states landlord friendly states? So these are the top 10 landlord friendly states. Typically you want no rent control, right? Which means that as a landlord you have the ability to raise rent however you want and fast eviction procedures. If you’re, if your tenant doesn’t pay, I want to be able to kick him out, find a new tenant, and favorable state court systems that allow you to do this. So These are the 10 top friendly states. You know, Ohio comes up as one of the top.

35:09
Speaker 1
You know, it has low cost of living, home prices are low, it’s gentrifies and it’s a big, you know, urban type of city. Arizona, lots of technology is moving there partly because it’s hot and you can generate electricity for your semiconductor plants and stuff like that. I personally like Georgia. Atlanta is a fantastic city to be an investor in. USA Football is based there. It’s known as the Hollywood of the SEC. Hollywood 2.0. A lot of stuff going, you know, in, in Atlanta’s favor. It’s also the most, the busiest airport in the world is Atlanta. So these are all some of the things, some of the homework you need to do to identify where to be buying. All right, now we’ll get into, you know, we. One, we are a lender, right?

35:59
Speaker 1
So we lend on our balance sheet in our name for our folks outside the US Looking to buy an investment property. And this is our core product and this is the most popular product that we offer also, which is if the rent that is appraised from the property that you want to buy, say you want to buy a $250,000 home, you know, we run the appraisal and then we also appraise that it should rent for $2,400. And if the, so it should rent for say 2,000, say $3,000, and if the mortgage and related mortgage expenses such as insurance and HOA and tax comes out to 2,400 or less than 3,000, you qualify. We don’t need to see any other, you know, of your personal financials, you qualify on the cash flow that the rental is going to give you.

37:00
Speaker 1
Now I’ve only highlighted one loan program. We have loan programs for expats. It’s just like you walked into your, you know, neighborhood bank that you grew up in. Our programs also for expats don’t require W2s. We have programs that you could use your income to qualify. It’s less popular because it’s just a little more homework because you’re using your income, you prove, you’re proving that your income that you earn can, can qualify to cover the mortgage payments. That just requires us to do a bit, do a deep dive into your foreign earned income. And we’re one of the few places that you can actually use your Singapore income. You can show me your Malaysia income, you can show me your Japanese income and we use that to qualify for the loan. Loan programs are very robust.

37:49
Speaker 1
We have on our balance sheet we have a few loan programs that can go as low as $100,000 in loan amount all the way up to 2 to 3 million and even higher for some of our, we also have a high net worth loan program for folks that want to qualify using their investment portfolio. So for example, if you have a fidelity portfolio and it’s you know, several million dollars, we can take that, use a formula and use that to qualify for the mortgage. And you know, a lot of people that you know are affluent or high net worth, they don’t want to show so much stuff because they’re busy making money. So that is something that we can dig into. But I wanted to show you the most popular loan program that we offer.

38:37
Speaker 1
Last but not least, I wanted to talk about something that’s become increasingly popular which is tapping your home equity for cash. And so we do this as a broker for us Real estate, London real estate, Australia real estate and our favorite Singapore real estate. You know, Singapore alone, We funded over 400 million in Singapore property alone. And basically what this is the next slide is, you know, you have an opportunity whether you know, you have a friend that wants to sell you their business, but he needs the money really quickly or you want to bring your, you want to bring the income back to your home country because your bank is not lending you to buy your raw materials. Maybe you want to buy new properties.

39:20
Speaker 1
We actually just had a client today, have three single family homes on the west coast, no debt, and he wants to buy a home in Singapore, but he lives in the US and so what he did is we did a cash out refi, pulled out 65% of the equity and he’s using that cash to buy property in Singapore, which of course we’re helping him with as well, you know, because right now there’s a lot of, you know, we had a client that pulled out cash from their US property to buy gold. Right. So this is a, this is a, a liquidity solution for the, for those that need cash for a short period of time when there’s an opportunity. So listen, that’s it from, you know, me. Here’s our contact details.

40:07
Speaker 1
But what I wanted to say, and I hope this is the message that you glean from this presentation. I, I purposely wanted to keep it short and sweet so I can engage the audience on questions that they have. One, all of this will pass. Two, we have to look at a real estate investment like any other investment. It’s not a primary residence. You’re not living in it. You don’t need to have a view or, you know, facing the sun when you wake up or facing east because it’s good feng shui if you’re Chinese. You, you want to buy a home that’s rentable where there’s high demand of renters and those renters are, are seeing a higher wage and those are the tenants you want. And so you have to do your research on where should I be buying?

40:54
Speaker 1
So I laid, I have a small snapshot of some of the things we look at. I’ve actually done a very long presentation on, and I go really deep into, you know, some of the tricks and ratios and screens to find these properties. But, and I’m happy to share that slide with you. Just message me and message your contact details in the chat and we’ll email that to you. So I hope that was useful. Don’t, don’t panic. It’s very, you know, the uncertainty, everybody’s feeling it. But if you have disposable income outside the US and you want to make an investment decision, US single family homes and property in the US is maybe the best thing you could do. The entry price is significantly lower than probably where you’re living.

41:47
Speaker 1
You know, I was just presenting, I can, I noticed one of our good friends on this chat, I was presenting to a group of investors in Malaysia and you know, were talking about Chicago property and a super nice Chicago property, you know, grass front lawn fence, two stories, bricks, looks like it’s out of, you know, a movie is Less than a condo downtown Malaysia, which, where you get no rental yield. So I think, you know, if you can get over the mental hurdle, like, wow, how do I invest over there? And you know, how do I look for properties? This is really exciting. We can help you with that. We can introduce you to realtors practically in any city you want. We can help you with the screening process. We have tons of research and data.

42:35
Speaker 1
And this is one thing I want to say. There is so much data available in the U.S. Like, if I wanted to buy a place in Singapore, I still struggle on, like Witch street and stuff like that. In the US There is data overflow. Anything you need, there is, whether that’s Zillow, Adam, Reddit, realtor.com, nAR reports, you name it’s there. And we can help you with some of this as well. So with that said, I’m gonna wrap it up and I’m going to open the webinar to some Q and A. So I’m going to start reading it now. All right. Oops. Okay, I’m having difficulties, difficulty finding where the Q A is. Oh, there it is.

43:32
Speaker 2
You can stop your screen share.

43:37
Speaker 1
All right. Okay, we’re in business. Is now a good time to invest in US Real estate? Well, if there was one thing I wanted this webinar to say is that in a perverse way, high rates is actually good. And let me explain why it sounds, you know, you know, irrational. But rates at, you know, 8% for 30 years is high. You know, it’s, but it’s high all over the world. But if you can earn 12% rental yield, you’re in the money. And what do you, what do I think is going to happen in three years? Well, 8% go to 5 and the 12% rental yield is going to go to 15. So your margin expansion and when interest rates go to five, you call me up and you say, I want to refinance my loan.

44:32
Speaker 1
And when you do that, in three years, your property would have been 20% higher. So when you pull out cash, you’ve actually recouped some of your initial down payment and that’s the US game. So, you know, high interest rates and you know, in my, I think slide two, the median income, the home price to median, the median home price to median income is almost seven times. Which means that coupled with mortgage rates where they are now, the average buyer in the US can buy, but he’s got to live somewhere, so he has to rent. And guess what? We’re, we’re tenants. Sorry. We’re landlords. You know, you can Google institutional buying of single family homes in the U.S. I’m not the only one that knows this. Blackstone knows this. These guys are smart.

45:24
Speaker 1
They’re, they have significantly more data than what I presented to you today. And they’re doing it. And I think, just like Warren Buffett, you know, these guys are smart. You should follow what they’re doing. Are there any signs that gentrification is slowing down in major cities? You know, I, you know, there’s always going to be gentrification. Like I said, it has a culture of gentrification. Now if I’m, you know, if I’m in tech, well, there’s only one place I can be. That’s, that’s Silicon Valley. So are people in Silicon Valley moving to, you know, to Dallas? Probably not. Right, but are those our clients? Right. Are the sweet spot that we see is a home price between, say, $250,000 to $500,000. You have good tenants, you know, a dual family income.

46:15
Speaker 1
So say a family income of 120 to $150,000 could support a 250 to $500,000 home in a good school district. And the quality of tenants is very high. So the US will always gentrify. And maybe in 10 years, it won’t be Texas, maybe it’ll be Portland, or maybe it will be Ohio. Well, I think Ohio is already happening, but maybe it’ll be another state. But right now it’s happening, it’s real, it’s here, and it ain’t stopping anytime soon. Should we prioritize states with no income tax when investing? Listen, it’s one of the things I look at, right? So, you know, you just have to put your, you have to put your mindset in. It’s like, you know, it’s like buying stocks. Like when interest rates go down. What are you buying? Well, you’re buying risky assets, risk assets.

47:09
Speaker 1
You know, when interest rates, you know, does it affect the banking sector? Then you buy some bank stocks. You have to put your mind into what your tenant is thinking. So they’re probably thinking, where should I move to rent? Well, I want to move to a place where I don’t have to pay, you know, there’s low taxes or no taxes. Well, I have, I had a slide on what those 10 states are. I want to move to a state where as good school districts, we have a report and you know, message me and I can send you this report where we identify the top public schools and private schools in California, Texas, Florida and New York. Why did I do that?

47:47
Speaker 1
Well, it’s because if that’s the mindset of somebody who’s looking to move to another state, where are the best schools for my kids to go? Right? That they could live the American dream of graduating, going to a good college. And then I look at home prices in those top schools, and guess what? Obviously those home prices are going up because people are moving into those areas. How does qualifying based on projected income work? Well, this is, you know, this is something that we revolutionized for when we brought to the market foreign nationals living overseas is that actually you can own a, you can get a mortgage in the US you don’t need US Credit. Which is the biggest myth out there in the world, besides Santa Claus is still real, is that you need U. S.

48:41
Speaker 1
Credit to own a home, which you don’t, or to get a mortgage, which you don’t. You never did. And, but now we’ve made it even more simple by saying, listen, we don’t even need to see your personal income or your pay stubs. We don’t need to speak to your human resources manager to give us 12 months of pay stubs. We just say, hey, listen, if this place you’re going to buy is renting for 3,000 bucks and the mortgage that you get through us is 2000 bucks, I don’t really need to see anything because the rent’s going to cover the mortgage. So that’s really exciting. And if you want more details, message us. And I can get, go into that with significantly more detail. How fast can a bridging loan be approved and funded? Good, Good question. So generally in most countries, it’s pretty fast.

49:35
Speaker 1
It’s anywhere between one to four weeks. You know, different lenders can operate at different speeds. But generally speaking, you know, it’s also, do you have an existing mortgage or do you want to do a second lien? Whatever it is, you know, this is a really exciting product that we’ve brought to the market. And it’s in super high demand right now because banks all over the world, they’re not lending right. You know, they’re, you know, they’re, you know, they’re putting their money elsewhere as opposed to lending, you know, so lending to lending for property investors isn’t on their priority list right now. But for us, this is all we do foreign nationals. We lend for people living in Canada, Latin America, you know, all of Asia.

50:17
Speaker 1
And a lot of that has to do with they want to send their kids to some of the best schools in the world. What are some of the more unexpected ways clients are using bridging loans? Well, generally it’s, you know it’s usually they need money quickly so whatever that means they need to make an investment. Sometimes it’s you know, unfortunately sometimes there’s, it’s health care related. You know my, you know my mother has got sick and I’m not covered by, you know there’s certain things that need. I need x amount of money quickly to pay for certain health bills. But there’s a whole range of of reasons you use a bridging load.

50:55
Speaker 1
Actually before I continue to ask questions I wanted to say in the chat in the, in the chat box it would be, you’d be doing me a huge favor if you could start following us. On our various Instagram account. My co founder Robert posts things on Tick Tock. These are quick snippets on real estate tips and tricks and anything U S related. It’s on Tick Tock. We’ve got a very robust YouTube channel where we introduce where we interview specialists in real estate or we you know sometimes it’s just Robert and I talking about opportunities in the US but take a look there’s tons of stuff there. I personally I have a Instagram channel called the Global Mortgage Guy where we talk about you know bridging low strategies and you know, tips and tricks as well. So please follow us where you can.

51:51
Speaker 1
Also we have two newsletters that goes out. America Mortgages is a US Specific newsletter. Global Mortgage Group talks about the markets and different investment opportunities and ways to look at it tends to look at the world and then tries to move tries to see what’s happening in the world and with the outcome of how it affects real estate prices where you live. So please follow us on that and all the details are on the chat. How do migration trends affect real estate investment opportunities? Well, I think you know, I hope part of this presentation explained that is that you know you want to buy where you expect you know, people to move to.

52:35
Speaker 1
You know when I was living in Hong Kong, when I first moved to Hong Kong in 1995, you know Wan Sha you would have never thought to buy property there or Shang. But as central only has so much space and mid levels that slowly it gentrifies into these areas and you See that in big cities, you know, Brooklyn 20, 30 years ago was not considered someplace where you want to live. And now it’s super gentrified. So you could feel it in a city by city basis. But in that, so that’s just a microcosm of an entire country. So you know, people move from California, they’ll move to Arizona to, or Vegas because it’s kind of nearby. Nevada has seen huge gentrification. So, you know, you have to do a little bit of homework. Call us, we can help you through the thought process.

53:32
Speaker 1
But yeah, it’s a great opportunity to kind of start looking at your investment opportunities because I can guarantee you, especially what’s happening right now, the Fed, I think, is going to be forced to cut rates. You know, they’ve got a lot of things they have to manage. They’ve got to lower the, you know, the debt burden on the rollover. So hopefully they roll it over at a lower rate and this is all. And once that happens, I mean, we’re off to the races again. So start doing your homework now. Call us, call me, call your American Mortgages representative. We can walk you through the process. We can introduce you to a realtor, we can crunch the numbers for you. Whatever you need, we’re here to help. Aside from income coverage, what loan to values can foreigners get on a mortgage for a rental investment?

54:23
Speaker 1
So I think I forgot to, I may have overlooked this key, key point. As a foreigner that’s a non US citizen, you can borrow through us up to 75% of the home value. Now think about that. You see a million dollar home, we’ll lend you $750,000 without any US credit, without any Social Security number. We’ll look at the rental income or we have programs that look at will. Look at your local income and we don’t care what you’ve done in Singapore or Frankfurt. You’ve got 100 homes. We’re not going to ask for that. We just want to see what you make in that country. But our most popular loan is based on the rental income. And can you imagine that 75% leverage as a foreign national? If you’re a US expat, that’s even higher for obvious reasons.

55:22
Speaker 1
All right, how are the questions coming along? Matthew, you have any questions for me? Oh, one just came in. What do you think? How many times. Wait, hold on. How many times do you expect the Fed to cut rates this year? Well, I’m, you know, it’s anybody’s guess, but you Know however, how economists look at it and how market participants look at it is they look at the Fed fund futures and it’s pricing in four rate cuts this year. So think about that. It’s, it’s almost May, right? So you have, you know, seven months and four rate cuts. If property prices can go up 10% in a world where rates went up from 0.25 to 4 fed funds rate, what do you think home prices are going to do when they go from four and a half to three and a half?

56:27
Speaker 1
I mean it doesn’t take to be, it’s not a rocket science. You don’t have to be a rocket scientist to figure out that’s going to be really good for home prices. Partly because people are waiting for this, are going to buy because they know they people in the US with disposable income know what I’m telling you. It’s a rent, it’s a tenant market. So they want to accumulate single family homes that they can rent out to earn rental yield while the property prices are going up. Do, does Global Mortgage Group lend to international investors financing property in the Middle East? Our parent company, Global Mortgage Group is an international real estate financing broker. We have a team in Dubai that facilitates international investors looking to buy property.

57:19
Speaker 1
We have a team that can select, you know, amazing condos, you know, in Dubai as well as offer financing. Are there restrictions to apply for a mortgage? None. I mean, I mean there are sanctioned countries but generally speaking the US is the land of the free. There’s no stamp duty. Foreigners can buy, you know, in fact, let me give you a statistic. Over the past 10 years, foreigners have bought over $1 trillion worth of US residential real estate. A lot of that comes from India, China, Latin America, London, Canada and Southeast Asia. The, and you know, last year was 50 billion, right. So this, you know, it’s always a destination foreigners to buy property there. A lot of that has to do with education.

58:25
Speaker 1
But you know, the lack of information which we’re hoping to improve on by having these webinars, education, educating the populace on these opportunities because it’s not, you know, you have to kind of be in the know to kind of look for this information. Sorry, might have missed this answer. How do you think interest rates will change going forward? You know, so the Fed funds rates and the 10 year treasury rate, they tend to move together but not necessarily, they’re based on a few different things. But it’s pretty commonly accepted that Fed Funds Rates are going to be cut this year and the market is predicting four times. So just to put things in perspective, it’s now almost May. So you’ve got SE, you’ve got 8 months. Did I do my math right? 8 months, 4 rate cuts.

59:27
Speaker 1
So like I said in slide 2 of the presentation is that in 2022, rates went from 0.25 to 4 and went up a little more after that. But in that period, property prices went up 10%, not down. So imagine what will happen to prices, property prices, when rates go down. Like rationally you would think home prices might go up more than 10%. Right? So we’re all really excited for that. We have our loan officers around the world are working day and night because investors around the world sees this. They’ve, they’ve taken out the emotional aspect to this. They’re like, listen, you know these tariffs and you know, all this noise in the media, it’s not good. But if I look at things objectively, what’s changed? Nothing’s changed. There’s lack of supply of homes. People are gentrifying to states where there’s employment opportunities.

01:00:30
Speaker 1
Chips act and Stargate are hiring because they’re building AI databases and data centers and things like that. And now you’re probably moving more manufacturing is because they want to start making more stuff in the US and two, the thing that has changed has actually helped the thesis of investing in U. S real estate is because tariffs are going to make input costs more expensive. And are, what are home builders going to do? Are they going to build and try to pass it on? No, I think they’re not going to build. I think they’re going to pause because you don’t want to, if you’re a company, you don’t want to increase capex in an uncertain environment. And so what that makes is the supply landscape is actually static, but the demand landscape is increasing. So think about that. So it’s a, it’s.

01:01:28
Speaker 1
And with, with mortgage rates so high, it’s squeezing out the average, the marginal buyer for their primary home. But for people like you and I and everybody on this call and Blackstone, they know it’s a good time to buy because rates are only going to come down. So if you can, if you can, you know, buy a single family home or a condo and you’re maybe making $200 a month, not that great, but it’s positive, right? 200 times 12, maybe the home price is you know, $200,000 and you’ve made $1200. Well actually that’s not, that’s pretty good yield. But what’s going to happen in three years? Well one, your average rent will increase 5% at least a year. So that 1200 a year could be 1500 a year. Right. And then your home price will increase 5% a year as well.

01:02:25
Speaker 1
And more importantly, mortgage rates are going to be cut. So you have a margin expansion story. As a property investor that really is the US real estate investing game. How does pre approval for a US mortgage work? Do you need an offer on a property to qualify for the mortgage or can one qualify ahead of finding the property? Really good question.

01:02:52
Speaker 1
So in the US you need a pre approval letter to buy a home because as a seller, just one more thing, just in terms of the current environment, another aspect to buying property right now which works in your favor is that if somebody is actually selling their property now and they’re not doing a 1031 exchange, which means they can buy another property at a higher price, that means they’re going to eat the capital gains tax, which means that they’re probably a motivated seller and you as a buyer have negotiating power. Right. So that’s really important. Somebody that’s selling now probably needs the money. Right. So I digress a little bit. So we are able to issue a pre approval letter within 24 hours.

01:03:39
Speaker 1
You use that pre approval letter as proof of financing when you go to to go house shopping in the US So the sequence of events are one, we give you some advice on, you know how to begin the process. Many of our clients like to set up a LLC and apply for a bank account. Because LLC holding rental properties is very tax efficient. But it’s 50, you can hold it in your own name. Then you come to us, we walk through the loan options, you ask us where we think is the best place to buy, we give you some recommendations and then we connect you to a realtor in that city. So we’ve just launched this portal, this in house portal that connects our buyers to realtors in the cities where you’re looking to buy. It’s, it’s fantastic. We just launched it.

01:04:36
Speaker 1
If you want more details on how this works and how we could, you could use it to help you with your US real estate purchase. You know, let us know, email us the contact details. I’ll just give you the contact details you should have in the email invites that went out. But yeah, so we can issue a pre approval. Once you find a home and that you like, you go into contract, which means you’ve paid earnest money or known as deposit, and you’re good to go. You call, you call our team and say, hey, I saw you on the webinar. You issued me a pre approval, I’m ready to go.

01:05:12
Speaker 1
Once that happens, we get a few, we update a few of your personal information, you submit it to our underwriting team, and then we give you a formal approval with a set of conditions to fulfill. And a lot of those we do for you. We have a portal which is super cool, it’s super encrypted, it’s state of the art. It allows you to upload all your relevant personal information on this portal to. And it connects to our loan officers. And we have a team in the Philippines that actually does a lot of this for you. We order title, we’ll help you ordering insurance. We have a foreign exchange partner that helps you getting the best rates to wire money to make the down payment.

01:05:58
Speaker 1
So all of this stuff we do for you, but you know, it’s another way of saying that we’re one stop shop. We’re here to kind of, we’re here on this evangelical crusade to teach the world that US real estate investing is not only achievable and attainable, it’s really the best investment decision you can make at the moment. Oh, I see different places to ask questions. All right. Oh, here we go. With the talks of Fed cuts later this year, should we wait or lock in financing now? You know, if you. Okay, so there are two variables, right? There’s rate and there’s price. Right Now I can tell you that, oh, there’s fireworks. I can tell you that if you put in a spreadsheet what your costs are.

01:07:04
Speaker 1
If you, if you’re looking at a property now and it’s 200,000 bucks and you’re waiting for rates to cut, I can guarantee you as soon as rates are cut, 50 bips, that’ll be $250,000 literally overnight. Right? So it’s better to lock in now because your cash flow calculation is significantly more sensitive to the capital value than the rate. So you can do the math. We can help you with this. But lock in the rate now because you won’t be able to buy the homes at this price because of the lack of supply. Right. There’s abundant supply. You can wait and, you know, you can kind of pick the houses you want. But in A bull market. Once rates are cut, these things are going to shoot up really quick. Do you work, Whoa, questions are coming in hot and heavy.

01:08:03
Speaker 1
Do you work with self employed clients who do not have traditional salary documentation? Documentation 100. Right. And this is the trend now. The world is moving farther away from traditional income. Traditional income is what a bank wants to lend you. They want to see 12, they want to see you working at a job for 5 years and stable income and pay slips. But people have different income sources. You know, they’re, they’re trading, they’re digital nomads, they’re doing different things on TikTok or Amazon. But this is what we excel in. Right? We understand that this is a large portion of our investor base are people who are self employed. And so this is where the rental coverage program that I talked about earlier comes into play. We don’t really need to know about your personal income or employment situation.

01:08:53
Speaker 1
If the rent that we appraise, the home comes in and if it’s more than the mortgage, you qualify. And in the rare situation that it doesn’t, we just lower the loan to value. So you do qualify. It’s a super easy to qualify mortgage program. And we are pioneers of this for offering it to foreign nationals and people outside the U.S. In fact, we are the only U.S. Direct lender with offices outside the U.S. Our theory was, why don’t we put financing close to the borrower like in other countries? Financing is close to the asset, we make that close to the borrower. So you get to speak to somebody in your time zone. We try hard to get somebody in your language and we’re slowly adding people all over the world.

01:09:44
Speaker 1
So we have loan officer teams in pretty much every time zone, in every continent for sure that speak your language. And we’re, and we answer questions 24 hours a day, seven days a week. We’re like the 711 of US mortgage lenders. What should someone do today if they want to take advantage of these trends but don’t know where to start? Well, I would suggest, I’m more than happy to kind of walk you through this, give you some of the screens. At the end of the day, there’s got to be a leap of faith. You got to make that, you know, it’s like, you know, you haven’t gone to the gym in 10 years. You still gotta just gotta make that leap of faith.

01:10:23
Speaker 1
Now we will give you as much information as we have, walk you through the process, introduce you to Our, you know, our accountant, our U.S. Tax accountant partners, you know people set up LLCs. If you want one, talk through the mortgage, introduce you to the realtor, walk you run the numbers for you, calculate cap rates, net operating income, whatever it is, we can help you with that. But you need to take the first move. Contact us, get the ball rolling. We will share our experience, expertise and knowledge with you because we want you to be successful. We want you to make money on real estate investing because we think it really is the best opportunity at the moment. Wow. Managed to answer all the questions. All right, well this was super exciting. I’m going to wrap it up here.

01:11:19
Speaker 1
Listen, you know my email is donaldmg Asia pretty easy to remember. Please email me, I have tons of slides. Our, our research team has pretty much anything you can think of. We’ve probably done some research on it. We’ll walk you through the process. I’ll introduce you to one of a loan officer in your time zone that could speak your language to get the ball rolling, to show you what loan options there are. But you have to make the first move. But we’re here to help you, guide you, teach you, educate you and create a more successful US real estate investor in you. So I’ve said enough. It is 6pm I’m actually speaking at another event in 30 minutes. So thank you for joining. I appreciate everybody’s time. If you have any questions, please feel free to contact me directly.

01:12:14
Speaker 1
Good luck, happy hunting and all the best for the rest of this year. Bye.

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Disclaimer: This transcript is AI-generated, so kindly pardon any transcription or grammatical errors that may be present.