Author: Premela R.

What does JP Morgan and Blackstone’s multi-billion dollar U.S. real estate buying spree mean for you?

U.S. Real Estate

More than $1 billion worth of single-family rentals will be acquired by JPMorgan Chase & Co.’s asset management division, while Blackstone is looking to invest $120 billion in real estate. Notably, most of Blackstone’s investment is in REITs. This is a sign that the current U.S. housing market hasn’t scared investors away from suburban housing.

Here’s why you should care

This move by JP Morgan and Blackstone is the most recent sign that big investors are resolute by the unstable real estate market.

That’s why all investors, though particularly those looking to invest in U.S. real estate, should be very interested in JP Morgan & Blackstone’s real estate investment spree. Institutional investors have many advantages over retail investors. They have the backing of sometimes billions of dollars that allow them to accumulate properties at a high rate and profit from the rental income. They can also set the tone for the specific market by acquiring inventory where they believe rental yields will be the highest. 

If you are curious about institutional buyers and how buying single-family homes affect average investors, this article discusses why institutional investors buy single-family homes and what it means for you this year.

Coronavirus and real estate investing

The Coronavirus pandemic changed how we live, work, and act in many different ways. For instance, most corporate jobs now come with remote-optional benefits that allow employees to work from anywhere – including their own homes. This means that the demand for housing is increasing and contributing to a major change in home ownership.

Institutional investors continue buying real estate in major metropolitan areas such as Los Angeles, Dallas-Fort Worth, and New York City. In particular, institutional buyers target single-family homes, which now make up over 13% of the residential real estate market.

U.S. housing market shortage

How bad is the U.S. housing shortage? According to Nadia Evangelou, the Senior Economist of the National Association of Realtors, “There doesn’t appear to be an end in sight.” Despite rising interest rates, the current shortage will likely worsen to more than a 5.5 million home shortage. With developers pulling back due to market uncertainty, rental yields are expected to see all-time highs in many markets. Large investors such as JP Morgan and Blackstone see these as opportunities; perhaps so should you. 

What does it mean to you as an individual investor?

Institutional investors bought almost 25 percent of all single-family homes sold last year. So how can you compete with institutional investors in today’s market? Below are our top tips for competing with big investors today:

Get pre-approved

As a U.S. expat or foreign national, in order to compete with other buyers, one of the best ways is to get pre-approved for the mortgage before you start your home search. This shows the seller that you’ve had the foresight to get a mortgage in place prior to looking for a property. With America Mortgages, you can get pre-approved within 72 hours, there is no application fee or charge for pre-approval, and we approve over 97% of all applications. 

Write a note to the seller 

Although this may seem “quirky,” in some markets, intense competition forced buyers to do anything they could to stand out among sometimes dozens of other offers on the same home in 2021. Writing a handwritten note to the seller is one way that buyers try to compete with institutional investors by persuading the sellers to choose them over others.

Work with a realtor that focuses on investment properties

Just as it’s important to work with a mortgage company that understands clients living outside the U.S. buying investment property in the U.S., a realtor that understands this is crucial. These realtors know the properties with the best yield potential in neighbourhoods with the best tenant profile. America Mortgages’ Concierge Service is a free service created to put our clients in touch with vetted realtors in specific markets to assist with finding a property that matches their requirements. 

Location. Location. Location. 

It may be cliché, but location is key when buying properties. Following similar locations that large institutional investors are looking at, gives you similar insight without the team of researchers and analysts they employ. Homes in cities that have little room for expansion tend to be more valuable than in cities that have a lot of room. Factors such as accessibility and proximity to parks, schools, railways, and public transportation can increase property values and rental yields. 

Tricks of the trade

Knowing what works with an offer to purchase real estate is important. There are often clauses or requests that can be added to a contract to lessen the cost out of pocket for the buyer. As an example, seller concession is a common clause used by many U.S. real estate buyers but is not well-known to global real estate investors. If a seller concession is approved, the buyer can significantly reduce the cost out of pocket as the seller of the property will pay for a lot of the buyer’s closing costs. These funds can be used to “buy down” the interest rate, make required improvements to the property, or as simple as paying for the appraisal report. 

Date the rate. Marry the property.

The idea is relatively straightforward. You buy a home you really want, regardless of available financing terms.
 
The mortgage rate you receive, even if it’s high today, isn’t your forever rate because you can always refinance down the road.
 
There will always be a time to refinance in the future once mortgage rates go down again. The property, on the other hand, may not be available. It’s a buyer’s market now. Take advantage of it.

Why work with America Mortgages?

As a company, America Mortgages’ only focus is providing U.S. mortgage financing for U.S. expats and foreign nationals. 100% of our clients are living and working abroad but buying U.S. real estate. We know exactly what is required to ensure your mortgage journey is stress-free by qualifying 97% of our clients for a U.S. mortgage.

Schedule a call with our U.S. mortgage specialist to determine your options today.

Top Landlord Friendly U.S. States to Own Property in!

Rental Property

Being a landlord is one of the best ways to build consistent, passive monthly income through real estate investing. However, not all states are equal when it comes to landlord-tenant laws, taxes, and competition, making it crucial for property investors to understand the top landlord friendly states before buying an investment property.

This article discusses the top three “landlord friendly” states in the U.S. and why investors may want to consider them.

Factors to look for in landlord friendly states

Landlord-tenant laws generally favour the tenant, but each state has the power to create its own laws. There are a few factors to look at when analysing the top landlord friendly states, including;

  • Property taxes. Property taxes are assessed by the county and tend to go up over time. States like Hawaii, Alabama, and Louisiana are known for having the lowest property taxes in the country – making these states attractive to landlords from the surrounding areas.
  • Evictions. The eviction process is one of the most important factors when choosing a state to buy a rental property. No one wants to evict a tenant. However, certain situations may require landlords to evict a tenant immediately. It’s important to know which states have a longer or more complicated eviction process.
  • Competition. Landlords should buy in areas with minimal competition to ensure they get the investment property for the best price possible. Areas with low competition are ideal for landlords who want long-term tenants and stable rent control.

Georgia

Georgia has been known as the second-fastest growing U.S. state since 2010. According to Zillow, Georgia’s property market is relatively competitive, as home prices are expected to increase by 14.9% in 2023. The average property tax in Georgia is considerable low in comparison to many states with an average annually property tax of only $1,346. With limited inventory and steady growth in home prices, Georgia makes a very viable location to invest in real estate. 

Georgia has long been known as one of the top landlord-friendly states for many reasons. First, Georgia’s eviction process is informal, and landlords don’t have to give written notice unless specified in the lease agreement. Georgia landlords can also go to the courts to start the eviction process if the tenant doesn’t pay within seven days of becoming aware of the notice. 

Average home price: $323,935, an increase of 19.4% since 2021

Indiana

How hot is the Indiana housing market? According to Redfin, Homes in Indiana sell in 59 days, making it a slightly competitive market. The average property tax annually is $1,263. 

A big bonus, Indiana’s landlord-tenant laws don’t tolerate tenants who are late on rent.

No one wants to evict; however, when the situation happens, Indiana is one of the more favourable states for a landlord. Indiana law allows landlords to evict tenants who don’t pay rent after giving them a ten-day notice that they’ll need to pay or leave the property. Additionally, Indiana has loose restrictions on security deposits. Landlords can hold the security deposit for up to 45 days, which allows sufficient time to inspect the rental property for damage.

Average home price: $227,679, a 13.3% increase since 2021

Kentucky

Property taxes are low in Kentucky, averaging about 0.8% across the state. The average property tax in Kentucky is $1,257 annually. Compared to other states, Kentucky is less competitive, as houses stay on the market for an average of 63 days. 

According to FortuneBuilders, Kentucky’s real estate market will soon see more activity, bringing home prices up during a better economic climate. Kentucky landlord-tenant laws have no restrictions on the amount you can charge in late fees or for the security deposit. Additionally, Kentucky landlords only need to give seven days’ notice to tenants who don’t pay their rent and fifteen days for other breaches of contract.

Average home price: $206,517, a 13.1% increase since 2021

Final Thoughts

If you are a U.S. expat or foreign national looking to buy an investment property and become a landlord in the U.S., do make sure to consider the eviction process, property tax rate, and competition before making an offer on your next investment property. As the property market goes from a “sellers” market to a “buyers” market, it’s best to act when the opportunity exists! As a company, America Mortgages’ only focus is providing U.S. mortgage financing for U.S. expats and foreign nationals. 100% of our clients fit this profile, and no one does it better.

For more information on loan programs for international borrowers, schedule a call with us today at [email protected]. Learn more about America Mortgages here: Learning Lab, company profile. 

Top U.S. High Schools & Property Investment Guide

U.S. High Schools & Property Investment Guide

Over the past few months, we surveyed over 1,000 of our clients and partners globally with the following question:

“What is the key consideration for owning an investment property in the U.S.?”

The top 3 answers were:

1. Education
2. Price and Affordability
3. Profit/Income Potential

In this report, we look at the top public and private schools in California, New York, Texas, and Florida, and we rank them by:

1. Highest SAT scores
2. Cities with the highest rental yield
3. Cities with the Lowest Home Price-to-income ratio

We then conclude our report with our team’s top 3 personal choices for US public schools, based on a combination of high SAT scores, the liveability of the city, rental income potential, as well as other personal and subjective aspects. 

WHY IS EDUCATION IMPORTANT?

Job market growth is certainly a key driver for price appreciation and is normally driven by new business formation in the area. Still, popularity as a living destination is driven by things like safety, cost of living, ease of transportation, and of course, quality of education.   

“Popularity as a living destination” drives demand, home value appreciation, and strong growth in rental income.

Education is an important factor for overseas property investors in determining where their next home purchase will be in the U.S. Most of the time, the objective of owning real estate to earn income almost always comes down to “could I live there one day”?   

In Asia, for example, where owning property is ingrained in their culture, it’s common to purchase an investment property “in anticipation” of sending their child to college.  

They could even live there during or after graduation, and the price appreciation could even pay for college if they sell the property.  

Or if the child decides to get a job in the U.S., they can stay in the apartment as a post-graduation gift to build up their credit or even rent it out to earn income. 

Many new immigrants or returning expats will choose to live in areas where there are good schools and a higher population of similar background families. High schools are a very important decision since it will determine their experience during the formative years between 14-18 years of age and potential college choices. 

TOP 5 SAT SCORES

These rank the schools with the highest standardised test scores.  

California Public Schools

California Public Schools - SCORES

California Private Schools

California Private Schools - SCORES

New York Public Schools

New York Public Schools - SCORES

New York Private Schools

New York Private Schools - SCORES

Texas Public Schools

Texas Public Schools - SCORES

Texas Private Schools

Texas Private Schools - SCORES

Florida Public Schools

Florida Public Schools - SCORES

Florida Private Schools

Florida Private Schools - SCORES

TOP 5 HIGHEST RENTAL YIELD

Here we take the Average Yearly Rental Income as a percentage of the Average Home Price in the city or neighbourhood the school is in. This shows us how much income the asset produces vs. its cost. This is a rough guide, but I can argue it is understated since home prices are declining while rents have been increasing across the country. 

California Public School Cities

California Public School Cities - Highest Rental Yield

California Private School Cities

California Private School Cities - Highest Rental Yield

New York Public School Cities

New York Public School Cities - Highest Rental Yield

New York Private School Cities

New York Private School Cities - Highest Rental Yield

Texas Public School Cities

Texas Public School Cities - Highest Rental Yield

Texas Private School Cities

Texas Private School Cities - Highest Rental Yield

Florida Public School Cities

Florida Public School Cities - Highest Rental Yield

Florida Private School Cities

Florida Private School Cities - Highest Rental Yield

TOP 5 LOWEST HOME PX-TO-INCOME RATIO

This is similar to a P.E. ratio for stocks. It’s based on the Average Home Price compared to the Median Household Income in that particular city. The lower the price, the more affordable it is (IE better value), or in another way, the less the homes have increased vs. the income of that particular area. Nationally, the average is 4.7, but in popular destinations such as California or Hawaii, the ratios are 8.9 and 9.4, respectively. 

California Public School Cities

California Public School Cities - Lowest Home PX-to-Income Ratio

California Private School Cities

California Private School Cities - Lowest Home PX-to-Income Ratio

New York Public School Cities

New York Public School Cities - Lowest Home PX-to-Income Ratio

New York Private School Cities

New York Private School Cities - Lowest Home PX-to-Income Ratio

Texas Public School Cities

Texas Public School Cities - Lowest Home PX-to-Income Ratio

Texas Private School Cities

Texas Private School Cities - Lowest Home PX-to-Income Ratio

Florida Public School Cities

Florida Public School Cities - Lowest Home PX-to-Income Ratio

Florida Private School Cities

Florida Private School Cities - Lowest Home PX-to-Income Ratio

Conclusion

Looking at absolute test scores, New York and California have cities with the highest SAT scores for both public and private schools. However, these states will also have a higher home price-to-income ratio since they are fairly well-known destinations for overseas buyers – Palo Alto, Manhattan, San Francisco, etc. 

In this report, we want to highlight the value option. Cities where you are able to purchase a home that is not only affordable on an absolute basis but relative to its Median Household Income of that city. 

In this case, Texas and Florida are better options. In Florida, good areas to invest in include big metropolitan cities like Jacksonville and Bradenton, which boast surprisingly high rental yields ranging from 11% to 19%, respectively!

In Texas, rental yields are lower than Florida but still much significantly higher than California and New York and most importantly, higher than cost of financing. Largely populated cities like Houston and Dallas have the highest rental yields of 7.8 % and 9.5%. If you are only considering areas with good school districts, I recommend choosing areas that are closer to private institutions. You will be guaranteed a similar standard of education as New York and California public schools while earning a comparable income from investment. 

OUR TOP CHOICES FOR PUBLIC SCHOOLS IN THE U.S.

This of course are personal choices.  The truth is all of these schools are amazing and cities which they are located in all very liveable. If you want to be introduced to our realtor partner in these specific cities to learn more as well as property options available, please email us at: [email protected]

1. Canyon Crest Academy, San Diego, California 

Canyon Crest Academy is a prestigious public high school in San Diego, California. This is my number one choice as it ticks all the boxes. The area is diverse, affordable, and has high educational standards, as the school is ranked second state-wide (1400 SAT, 31 ACT). As a California native who’s seen it all, I would also name San Diego as the most beautiful area in the state. In San Diego, you can enjoy stunning beaches, perfect weather, and amazing food, all whilst attending a top school. Additionally, if you are someone who considers college as part of your moving decision – for yourselves or for your kids – California is also a great place to live because of its proximity to top universities. Schools like UCLA, UCSD, UC Berkeley, and Stanford are only a drive away, which makes it easier and more accessible for families and their children. 

2. School for Advanced Studies Homestead, Miami, Florida. 

School for Advanced Studies Homestead, in Coral Gables, Miami, is a top 10 public high school in Florida. Located southwest of downtown Miami, Coral Gables is well known for its exclusive private estates, shopping districts, and upscale suburban lifestyle. After visiting the area last summer, I was stunned by its beauty and liveliness. Coral Gables is young, fun, and perfect for raising a family. I was surprised to find that the neighbourhood was less expensive than I thought. The average price of a home in Coral Gables is $235,800, with an average rent of $1,303. In this area, the rental yield is also higher at 6.6%, which increases your potential rental income.

Investing in an area like this would also be beneficial long term as it is only a short drive away from the University of Miami, one of the top 3 colleges in Florida. If your child is considering attending a college within state borders, Coral Gables is a great option.

3. Bronx High School of Science, Bronx, New York

If you’re looking for an affordable house in New York City, be sure to take a look at the Bronx. Not only is the borough home to massive parks, diverse neighbourhoods, and great eats, but it also has the lowest average home price of any borough, hovering at $266K as of October 2022.

What’s more, the Bronx has the highest-rated schools in the city. Bronx High School of Science is ranked number one amongst public high schools in New York (1400 SAT, 33 ACT). Investing in a home in the Bronx will also secure you a stable cash flow compared to other districts, as the rental yield in the area is 5%, 2% higher than the state average. On a more fun note, the Bronx is also the essence of the culture in New York. It is the home of hip-hop, jazz, and Yankee Stadium. You will surely get to enjoy the New York vibe when living in the Bronx. 

www.americamortgages.com

Top 10 U.S. Cities with the Highest Rental Yield 

Highest Rental Yield

Cities across the U.S. have seen some of the highest rental yields to date. From 2020 to 2021, home sales prices rose approximately 20%. That’s great news for real estate investors that held property pre-pandemic, but with low inventory and rising rates forcing the owner-occupied borrowers out of the market, opportunities for high-yield U.S. investment properties are abundant. Here are the top 10 U.S. cities with the highest rental prices and most affordable properties.

1. Houston, Texas 

The lack of affordable single-family homes has created a demand for rental properties in Houston. Its strong job market makes it a solid play for investors of these types of properties. 

Average Purchase Price: $496,930 

Average price/sqft: $155 

Average Rental Income: $3,455 

2. Arlington, Texas 

Arlington, a city in north Texas, is ranked 12 on the list of the top places in Texas to purchase a home, according to Policygenius. At $275,745, the average house value is 6% more than the national average, and its five-year growth rate is 63.6%. 

Average Purchase Price: $493,700  

Average price/sqft: $174 

Average Rental Income: $3,035 

3. Tampa, Florida 

Investors were responsible for purchasing 25% of homes sold in Tampa in the summer of 2021. Average rents have had the highest spike in the country, and impressive job growth in white-color professions shows no signs of slowing.  

Average Purchase Price: $508,725  

Average price/sqft: $252.65 

Average Rental Income: $3,004 

4. San Antonio, Texas 

San Antonio could be an excellent investment. The city boasts affordable property prices and excellent average rental yields per month. In 2020, approximately 40% of individuals looking to rent were out-of-city transplants, which has mostly stayed the same.

Average Purchase Price: $514,975  

Average price/sqft: $170.53 

Average Rental Income: $2,951 

5. Charlotte, North Carolina 

Charlotte, North Carolina’s robust employment market, four-season climate, and proximity to the beach and mountains make it a top destination for real estate investors looking to earn rental income.  

Average Purchase Price: $498,750

Average price/sqft: $173 

Average Rental Income: $2,796 

6. Colorado Springs, Colorado 

Colorado Springs is known to be one of the most substantial long-term real estate investments in the U.S. Since the last decade, Colorado Springs’ typical property prices have increased by around 143.7% based on Zillow’s Home Value Index.  

Average Purchase Price: $487,475  

Average price/sqft: $198 

Average Rental Income: $2,770 

7. Orlando, Florida 

Home to Disney World, Universal, and a fantastic climate, 60 million people visit Orland every year. Some of the best beaches are a drive away, and the city is famous for its gold courses, nightlife, and shopping malls.  

Average Purchase Price: $482,085  

Average price/sqft: $235 

Average Rental Income: $2,739 

8. Cincinnati, Ohio 

Cincinnati has long been regarded as an affordable city in general. In fact, Cincinnati was ranked as the 14th most affordable U.S. city to live in by U.S. News & World Reports in 2017. In addition to the generally low cost of living, Cincinnati real estate is more affordable than in many other major metropolitan areas. Cincinnati has become one of the go-to markets for out-of-state real estate investors looking to buy properties at a good price and still earn a reasonable rate of return, and prices have increased as a result. 

Average Purchase Price: $474,750  

Average price/sqft: $171 

Average Rental Income: $2,734 

9. Jacksonville, Florida 

Jacksonville benefited from Florida’s decision to loosen pandemic restrictions more quickly than other states. The city has one of the highest-performing economies in the country and a dwindling unemployment rate.  

Average Purchase Price: $501,850 

Average price/sqft: $187 

Average Rental Income: $2,564 

10. Huntsville, Alabama 

Listed as one of the top cities to purchase a rental property for cash flow in 2022, Huntsville is known for its rent growth value. Strong employment growth and low housing costs have led to equity growth of about 24%, 22% more than the national average. 

Average Purchase Price: $487,250  

Average price/sqft: $171 

Average Rental Income: $2,436 

If we assume the purchase price of each city’s house to be $500,000, here’s the rank based on the highest rental income: 

Highest Rental Income

With creative loan options offering fixed terms for interest-only loans, buying down of interest rates, and long-term capital appreciation, investing in U.S. cities with the highest rental income gives you significant short-term and long-term possibilities.

Ready to reap the benefits of investing in the U.S.? 

As a company, America Mortgages’ only focus is providing U.S. mortgage financing for U.S. expats and foreign nationals. We know exactly what is required to ensure that your mortgage journey is stress-free. We qualify 97% of our client’s for a U.S. mortgage. What are you waiting for? Schedule a call with our U.S. mortgage specialist to find out your mortgage options. [email protected] 

FOMO – Time to Cash-Out!

Cash Out Refinancing

After two years of meteoric price appreciation, U.S. home prices seem to have hit their peak. U.S. mortgage rates have more than doubled since the beginning of 2022, and according to CNN, the average interest mortgage payment on a median-priced home is up 73% from one year ago. 

Recently the FED approved a 0.75-point interest rate hike, taking rates to their highest since 2008. These high-interest rates, combined with quantitative tightening, are pushing home prices down, a trend that Economists at Goldman Sachs and Wells Fargo expect to continue into 2023. 

Many non-residents who own a U.S. property are hesitant about financing their U.S. real estate when mortgage interest rates are so high. However, there is more to the picture than meets the eye. With housing prices expected to continue dropping, many savvy investors are taking advantage of cash-out refinance mortgages. 

The truth is, cash-out refinancing can be a good way to improve your financial situation – we think of it as an affordable way to borrow money if you own substantial equity in your home. The money from a cash-out refinancing can even be used to rebuild equity that you’re taking out if you decide to use it on value-adding home renovations.

With the money you take out of your property when you refinance, you can do whatever you want with it. You can stay on top of an unexpected medical or vehicle bill, finish paying back your college loans, or make home repairs.

While prices have dropped by 2.6% since the end of June, according to a CNBC article, they are still 10.7% higher than in September 2021. This is the canary in the coal mine, and foreign investors would be wise to take advantage of their equity while it’s still high. 

Let’s flesh this out with an example. Imagine you purchased a home in Dallas, Texas, in 2016 for $230,000. As of November 2022, that home is valued at $460,000. 

You can take advantage of that massive increase in value before it trends down by leveraging the property and extracting a substantial amount of your equity investment. The best part? You keep your U.S. property investment and its cash flow and use the extracted funds toward a new investment.

FED Chair Jerome Powell signalled that interest rates would likely reach even higher than initial targets set in September. As the value of your investment property continues to decrease, so will the potential equity you can leverage. Consider striking while the iron is hot and lock down your property value.

Don’t miss the opportunity to utilise your equity while it remains high. Let your money make you money with America Mortgages cash-out refinancing. America Mortgages has a 97% approval rate for both U.S. Citizens & Foreign Nationals. That is our sole focus and our expertise. Contact us today to speak to one of our loan officers at [email protected].

For more details, please visit us at www.americamortgages.com

Real Estate Investors Rejoice! AM Concierge is here!

Portfolio Loan Interest Rates

With the continued home shortage in the U.S. of more than 3.8M properties, property developers are pulling back on new projects, and despite rising mortgage rates, U.S. property prices are holding strong. For the remainder of 2022 and going into 2023, The Washington Post stated recently, “As mortgage rates rise, prices should moderate, but low inventory will continue to be a problem.” The biggest benefit to this, bidding wars in hot cities where buyers were paying 10-20-30% over the asking price is likely going away. Now may be the time to buy while people are still figuring out the market. 

The continued feedback we get from clients is finding the perfect property represented by a vetted realtor that understands non-resident investors, with their interests in mind. This is the missing piece of the puzzle. Furthermore, looking for reputable homeowners insurance once the property is in contract is another problem. This is where America Mortgages comes in. We heard you, and our team now has solutions for both! 

If you are looking for a “full-service” solution when investing in U.S. real estate, getting a mortgage is only one step in the process. Recently, America Mortgages launched an option to match your needs with a vetted and trusted realtor. AM Concierge not only gives our clients the best mortgage options available, but they also have a reliable realtor network to choose from regardless of the U.S. state.

Upon being pre-approved for your mortgage, if requested, you will be teamed up with a Certified International Property Specialist to help you with a key step of the transaction – finding the right property! This is not a requirement for a mortgage loan. This is only an “extra tool” to assist if needed. If you already have a realtor you are working with or prefer to find a realtor on your own, please continue to do so. 

We believe that as a non-resident real estate investor if you have more resources available, you can make a more informed decision on which investment property you should buy.

AM Concierge offers;

 1. A mortgage loan tailored to your needs through a firm that are experts in non-resident, foreign national, and U.S. expat mortgage lending.

 2. A trustworthy realtor that will source a property that fits your requirements. A realtor that knows the specific market you’re interested in will show you only properties that meet your requirements, saving you time, effort and money. Often they will find properties you may not know exist. Just as it’s important to find a mortgage company that understands Foreign National and U.S. Expat lending, it is as important for your realtor to have this experience as well. Someone that works well with the mortgage professional and also understands the intricacies and nuances involved when buying from abroad. 

They will negotiate the purchase agreement and represent you through the transaction. Keep in mind, in the U.S.; the buyer does not pay for the realtor’s commission. This is paid for by the seller. It costs you nothing to have someone to represent you. 

The best part about our AM Concierge service is that there is NO cost to you!

At AM Concierge, we have a vetted and approved network of realtors in all 50 states that can assist you when buying a home as a foreign national, non-resident, or U.S. expat. These agents will work in your time zone and in your language to find a property that fits your requirements. Our agents are friendly, compassionate, and understand the process of international home buying. 

 2. Foreign Nationals and Expats Home Insurance & Other Insurance products 

If you have a mortgage in the U.S., you are required to insure the property for its replacement value, known as homeownership insurance. Living outside of the U.S., often finding a reputable insurance agent takes time and effort. It’s a small step; however, if you’re unfamiliar with the process, it can be confusing and frustrating. Again, we understand, and we are here to help. This is why America Mortgage’s home insurance mortgage solution comes from trusted insurance partners. They will assist you in obtaining a quote for homeowners insurance and other insurance needs you may have. If you’re a property owner, our trusted insurance partner will make it easy to get the coverage you need to be prepared for whatever may come your way. Again, this is a free service we provide to help your journey in U.S. real estate investing.

As a company, America Mortgages’ only focus is providing U.S. mortgage financing for foreign nationals and U.S. Expats. Getting pre-approved for a purchase or a refinance/cash-out normally takes 72 hours from application and document submission. Once you have your pre-approval, you are ready to begin the search for your dream international property. 

If you have any questions regarding mortgages, realtors, or homeowners insurance, please speak with one of our loan officers today. 

[email protected]

The easiest U.S. mortgage to qualify for, and America Mortgages has it!

Loan For Foreign Property | easiest U.S. mortgage to qualify

As many of you know, America Mortgages offers two main ways to qualify to purchase or refinance investment real estate in the U.S. – either using personal income or using only the properties’ projected or actual rental income. For two main reasons, most of our clients use the latter. One, their income may be extremely complex or documented insufficiently, or two, they plan to move quickly with a streamlined, minimal documentation approach.

Difficult times call for creativity and common sense.

At the beginning of the year, qualifying based on rental income, otherwise known as DSCR was easy. Rates were low, rental yields were stable, and properties cash flowed on paper very easily. Since the beginning of the year, rates have continued to increase. Overall, rates remain historically low when you look at the U.S. mortgage market over the last 20 years. Rental yields have continued to climb to record levels, however, documenting these rental yields through an appraisal, which is how we underwrite these loans, has become increasingly challenging as there is typically a lag in rental comps to support the higher rents.

This presented our team with a problem; In the current environment, in order to qualify for a “standard” DSCR loan, clients were required to put more money down to keep the underwriting numbers in line. In general a DSCR loan requires the rental income listed in the appraisal to be greater than or equal to the mortgage payment. Unfortunately, it’s going to take time for rental appraisals to correlate with the higher rental yields, to where DSCR will be a viable option again. However, we have a solution…

Rejoice Global Investors…Introducing America Mortgages’ No-Ratio Mortgage Loans!

“No-Ratio loans,” have recently been introduced as options to help clients with minimal down payments to leverage a higher LTV without the constraints of waiting for rental yield to catch up. You might ask yourself – why would someone want to go into a loan knowing the property cash flow doesn’t cover the mortgage payment?

It’s a good question! This is common sense underwriting and as mentioned previously, the rental comps mentioned in the home’s appraisal sets the cash flow target. Rental comps are hard to measure; they are dependent on when tenants in your area have renewed their leases, are the renewed leases at market rent, etc. This measurement is often not the rental amount the client is buying the property for. It is very common to review an appraisal and see rental comps being used where rents haven’t been raised in years; this is likely because it’s a stable tenant, the landlord isn’t in need of maximizing the yield and prefers to keep a stable tenant – a problem when trying to get the maximum rental amount on an appraisal and a cash flow loan to work.

Here at America Mortgages, we put a lot of emphasis on figuring out the client’s plan for the property. How do the rental comps in the area look versus what their realtor believes they can rent it for? Are they buying for long-term rentals or short-term rentals? All of these questions plan into the type of mortgage program they will utilize – and now more than ever, it’s the no–ratio loan that allows them to avoid the hassle of counting on rental comps in appraisals and still put minimal down into the mortgage as possible – they also understand the ability to refinance the loan when rates improve in the future – which they will.

Bottom line, America Mortgages’ clients are sophisticated and seasoned U.S. real estate investor. Our U.S. loan officer based in 12 different countries know and understand the market. Better than anyone else. We listen to all our clients requests, and if possible we find a solution which fits the market and  “makes sense”. No Ratio Mortgage Loans is such a solution!

For more information, please Join us for an exclusive Asia-wide, one day only, in-person U.S. real estate seminar to showcase a brand new, affordable single-family neighborhood development in a prime area of Dallas, Texas, perfect for an investment opportunity. Register here!

Alternatively, contact us today at [email protected] to speak to our team of U.S. mortgage specialists today!

www.americamortgages.com

Go beyond ordinary banking. AM Real Estate Bridge Loan

Real Estate Bridge

What are bridge loans?

A bridge loan is a type of asset-based, short-term loan, typically taken out for a few months to a couple of years pending the arrangement of longer-term financing or an exit, such as the sale. It is used to ‘bridge’ the gap during times when financing is critical but not readily available. 

Bridge loans let homebuyers take out a mortgage against their current home to make the down payment on their new home. A bridge loan may also be a suitable choice for you if you want to purchase a new home before your current house has sold. This financing structure may also be beneficial to businesses that need to cover operating costs while waiting for long-term funding.

Introducing AM Bridge!

AM Bridge: A liquidity tool once reserved for the wealthy is now available for everyone!

Real Estate investors are often asset-rich but cash poor. On paper, their net worth may be significant, but their wealth can be tied up in real estate or other businesses. Accessing such funds might mean sacrificing a stake in their business or surrendering some influence over its future – neither of which may be appealing.

It is not always the case that a real estate investor has a few hundred thousand dollars just sitting in the bank readily available to fund a property immediately. Even if they do, they may not wish to tie all their cash upon one property. In today’s market, the property that investors want could be in high demand and needs to be acted on quickly; these could be higher-yielding investments that need immediate funding. Having access to large sums of cash quickly and easily is what HNW investors have had at their disposal for decades. America Mortgages has now made this powerful liquidity tool available to everyone.

How is it used?

Here are some popular uses of “Bridging” Loans:

– Filling the contingency sale of an old property before you can purchase the new property. You can take a Bridge Loan and use your old house as collateral for the loan. The proceeds can then be used to pay a down payment for the new house and cover the costs of the loan. In most cases, the lender will offer a bridge loan worth approximately 80% of both houses’ combined value.

– To purchase based on the asset value of the new build so the borrower can meet the final payment before delivery.

– For the initial purchase until entitlement or for refinancing after a cash purchase until entitlement. 

– To purchase greenfield land to begin commercial development. Once certain stages of development have been completed, it’s easier to obtain traditional bank financing.

– Cash-out Bridge Loan for short-term personal or business use.

The Market

The pandemic has created a boom in the bridge loan market in several ways. 

Firstly, it has created an economic environment filled with uncertainties, and as a result, more businesses need capital as soon as possible and can’t afford to wait for a traditional loan. They will thus turn to bridge loans. 

Secondly, cash is king these days. With the current value of the U.S. dollar, it may be time to look at accessing liquidity quickly and easily. Normally regardless of your current financial situation, a bridge loan gives you quick access to up to 70% of your property value with simple, easy-to-understand terms. 

Thirdly, there has been an accelerated trend of people migrating to Sunbelt cities due to greater job opportunities. This has driven up rents in these cities – the Phoenix area had the biggest rent increase in July, up 27% from a year ago. Due to the profitability of the rental trade, more developers and businesses are looking to acquire multifamily rental units. Short-term commercial bridge loans will provide them with the needed flexibility to take on such assets while they look for permanent financing options. This will help businesses get their assets to perform at maximum potential. 

The Problem

When an American Mortgage bridge loan specialist gets a request for short-term financing, they ask three things;

  1.  Where is the asset?
  2.  What is the value and the outstanding debt?
  3.  What situation are you trying to solve?

Number 3 is the most crucial and often the hardest to rationalise. Even the wealthiest people have used short-term bridge financing to access liquidity even when “conventional” options are still possible. This is mainly due to the time and effort required to obtain long-term financing. Cash flow, credit issues, or asset use may prohibit a “conventional” bank loan. When time is a factor in a transaction, it is important to see the opportunity cost of not closing quickly or obtaining a simplified equity release. 

Our Solution 

Typically, the timeline for traditional bank loan processing from origination to closing is longer than most borrowers prefer for a time-sensitive funding solution or if the project lacks sufficient stable cash flow. The short-term nature of bridge loans generally allows alternative lenders to provide an approval decision and funding with greater speed than a more traditional lender. At America Mortgages, we’ve funded loans in as little as a couple of days since the initial contact. 

To allow for such a speedy funding process, the sponsor’s expected property value and experience in executing the business plan are the determining factors in the decision-making process. For this reason, the loans are commonly non-recourse, which is another benefit to the borrower. 

Bridge loans are often the preferred funding option for uses such as:

– Highly structured transactions 

– Discounted note payoffs

– Lease-up stabilisation 

– Redevelopment of existing properties

– Repositioning of a tired or underperforming asset

– Property acquisitions with a short closing timeline (or challenges on the property or sponsor)

– Recapitalisations/Debt Restructuring or Partner Buyouts

– Other uses on a case-by-case basis depending on borrowers’ specific funding needs, where traditional funding sources like banks or insurance companies will have a hard time approving such loan requests.

– Lending to foreign nationals with a “same-as-cash” basis 

Short-Term vs. Long-Term 

Unlike short-term financing, longer-term financing is susceptible to the regulatory hurdles associated with securing long-term fixed-rate mortgages. This is why bridge loans are often provided by unregulated lenders, family offices, or in some cases, HNW investors. In addition to the regulatory scrutiny, banks or insurance companies require, the sponsor’s credit history and financial strength also take a front seat in the credit decision for long-term loans. Keep in mind America Mortgages will never work with “lend-to-own” investors and lenders. Our goal is to find you a solution that works with your situation with a long-term solution and exit from the bridge loan. 

While bridge loans are the preferred option for many specific financing needs, several downsides come with short-term financing that is meant to fund projects. When assets need work, lenders will consider these higher risks and, therefore, charge higher interest rates. 

Additionally, bridge lenders generally do not exceed 70%-85% of the property cost basis to limit their financial exposure. However, this leverage is higher than traditional lenders would advance for the same project. This is because bridge lenders rely on the sponsor to fix the issues, which made the property ineligible for long-term financing in the first place. This enables the asset to become stabilised and ready for exit through a sale or by refinancing the property through traditional channels.

As a company America Mortgages’ only focus is to provide U.S. mortgage financing for foreign nationals and U.S. expats. 100% of our clients are working and living outside the U.S. For more information on AM Bridge, please connect with us via email at [email protected].

www.americamortgages.com

U.K. Alert – Top 5 Q&A Regarding U.S. Real Estate

Buy House In USA

Did you know? Non-U.S. resident investors purchased $59 billion worth of home purchases in the past year, a 9% leap from 2021, according to a report from the National Association of Realtors. 

We asked 387 of our U.K.-based readers their top 5 questions regarding purchasing an investment property in the U.S. 

Below, we answer those questions.

1. Can U.K. citizens buy property in the United States?

Yes, U.K. citizens can purchase property in the United States. It’s very straightforward. U.K. citizens can qualify for a mortgage in the U.S. with America Mortgage’s F.N. Investor + loan program. Borrowers can get pre-approved for a loan within 24 hours of application! What makes the U.S. unique from many other countries, the U.S. does not have any laws which prohibit or limit the ownership of U.S. real estate. 

2. What documents are required for British citizens to apply for a U.S. mortgage?

The loan document requirements are based on the loan program the client qualifies for. America Mortgages’ approval rate is 97%, so we can almost certainly find a solution for our clients. Below are a sample of two of our most popular loan programs for non-resident U.S. real estate investors;

America Mortgages Investor + 

  • Income letter by either the borrower’s employer or if self-employed, accountant (purchase, equity release, cash-out, or refinance).
  • Credit report from client’s home country (must be translated to English). U.K. credit report is perfect; however, if the client has credit in another country, that will also be okay. 
  • Two months’ bank statements (foreign bank accounts allowed).
  • Passport. 

America Mortgages Investor

  • Qualify ONLY on the rental income of the property (purchase, equity release, cash-out, or refinance).
  • Credit report from client’s home country (must be translated to English). U.K. credit report is perfect; however, if the client has credit in another country, that will also be okay. 
  • Two months’ bank statements. 
  • Passport.

3. Where do U.K. Citizens buy property in the U.S., and what do they use it for?

U.K. citizen property ownership in the U.S. is evenly split between suburban/resort areas (45%) and rural/urban areas (55%). Top states include:

U.K. citizens use their U.S. properties as investments, second homes, and Airbnb:

4. What is the average purchase price of houses in the U.S. purchased by U.K. citizens?

The average purchase price of houses in the U.S. purchased by U.K. citizens is $718,800, and the median purchase price is $366,600. With a total of 2.7 billion U.S. dollars annually, the United Kingdom was one of the top foreign buyers of residential real estate in the U.S. in 2021.

5. Do U.K. citizens pay the same mortgage rates as U.S. citizens?

Non-U.S. citizens may face slightly higher mortgage rates with a minimum down payment of 25%. What makes the U.S. unique from many countries is there are no age limitations on a mortgage. This means a borrower, 19 or 99, gets to take advantage of the same long 30-year tenure (fixed or adjustable). 

Overall, with America Mortgages’ Foreign National loan programs, clients do not need U.S. credit to apply for a U.S. mortgage for foreign investors. We accept international credit reports from your home country or country of residence. 

As a company, America Mortgages’ only focus is providing market rate mortgage financing for foreign nationals and U.S. Expats. 100% of our clients are living and earning their living outside of the U.S. We have loan officers in 12 different countries speaking your language, in your time zone. If you’d like to learn more about our loan programs, please email us at [email protected].