How to Finance U.S. Real Estate as a
Canadian Investor Transcript

03:24
Kyle Mazzuchin
Hello, everybody. Kyle Mazzuchin here, vice president for America Mortgages for the Canadian markets. Thank you very much for joining us today. The point of our presentation today is to bring you value and tools to understand how to finance our real estate as a Canadian investor. We’re very proud to look at how to provide you with the tools and knowledge. Then we’ll go through all of those tools and pieces of knowledge. At the very end, we’ll have a question-and-answer period. We have a wonderful guest, co-founder of America Mortgages, Mr. Robert Chadwick, who will be able to answer any questions as well as myself in terms of the process for you.

04:18
Kyle Mazzuchin
So here at America Mortgages, we’re one of the only few places to have tools to help foreign nationals provide to get you applications across the border with relative ease. How to finance U.S. real estate as a Canadian investor? We’ll go through a bunch of slides here that will provide statistics, programs, and anything to do with our suite of programs here at America Mortgages. So who are America Mortgages? You’ve seen a lot of our videos, on LinkedIn, Facebook, and Instagram, and been inundated with this presentation. We’ll go through the why of who we are and what we do, and then also about the background, about myself, how I can be able to help you with anything when it comes to America Mortgages here in Canada. Then we’ll go through statistics and some Canadian news.

05:40
Kyle Mazzuchin
Over the last couple of years, it’s been very difficult for investors in Canadian real estate. So we’ll go through why the U.S. versus Canada, and then we’ll go through the application process. How easy it is to look at having our 15-minute interview to get you the mortgage application and conditional approval you need and the confidence for you to go buy real estate. Next, we’ll go through our loan programs, and at the end, we will look at questions and answers. So Canadians in the U.S. market, $6.6 billion was spent on real estate, rental, and permanent residence between April 2022 and March 2023. Number two, as the second top foreign buyer of U.S. real estate. Being so close to the border, why not? Then 55% of those purchases, you’re looking for somewhere warm there, Canada.

06:36
Kyle Mazzuchin
So you know how cold it can get in Ontario or Winnipeg or even in Montreal? You’re looking at Florida, Arizona, and California to get away from the frigid temperatures of the winter. Some facts here from the different associations. As you can see, fewer homes were built over ten years following the U.S. crisis than in any other decade since the sixties. As of the fourth quarter of 202, the U.S. has a housing supply deficit of 3.8 million units. The National Association of Realtors projects that the housing deficit is closer to 6.8 million homes. Also, we find a 30% increase in the monthly number of homes, coming onto the market would have been necessary to keep up with the demand of the pandemic. So just some facts there. Why America Mortgages? We’re 100% working with individuals living and working abroad.

07:40
Kyle Mazzuchin
We only focus on foreign nationals and U.S. expats and we have representation in twelve different countries. So time zone is not an issue. Culturally sensitive to seven different languages and understand any sort of cultural nuance in the interviewing process with you. All loan programs do not require U.S. credit. So we’ll probably ask for a credit bureau report from your home country in the language that we’re doing your mortgage application in. In this case, English. Common sense underwriting is a very straight approach. In Canada, as you know when you’re doing a mortgage application here, sometimes you’re asking for a lot. With our common sense underwriting approach, we’re not going to be doing that with some of our programs. Our programs are also simple and easy to understand. No age limits or restrictions. Interest servicing only facilities.

08:33
Kyle Mazzuchin
You can go 40 years versus Canada, 30. Loans in all 50 states. Transparent fees and process. Also 24/7 processing of your mortgage as well. So we’re always working to make sure that we’re meeting and exceeding expectations in terms of your deadlines. About myself, ten years here in financial services and leadership experience. Loved mortgage origination. That’s why I came back to it and looked at America Mortgages as an opportunity to provide value for truly borderless lending solutions. I’m a former senior leader of mortgage specialist for the Bank of Montreal, overseeing a team of 25. It was a fantastic experience, but with that came the opportunity to look at America Mortgages to help, and missed the mortgage origination side. I’m based here on beautiful Vancouver Island with my spouse and two children.

09:30
Kyle Mazzuchin
We’re located here in the Cowichan Valley if you’re very familiar with it. So why invest in the U.S. versus Canada? Larger, bigger, better diversified economy. Global influence is the number one economy in the world as well as number one in real estate markets, and also known for its innovation. Look at the top tech companies and airline companies located in Washington state. Tesla, and Microsoft, don’t even have to go any further. Lower taxes in Canada. I think that comes up. When you hear lower taxes, you’re putting your ear and listening for sure. Favorable tax treaties as well, stronger currency, and a 30% difference in terms of the income itself. Also, it has a reserve currency status with different countries around the world. So, we’ve heard a lot about government intervention in the housing area due to some challenges with affordability. Could be supplied?

10:34
Kyle Mazzuchin
We don’t know, but here are some pieces from around Canada. In British Columbia, for example, a ban on non-resident short-term rentals from May 2024 on, $3,000 a day could be fined. In Ontario, short-term rentals are allowed for only essential workers and travelers needing housing for at least two weeks, and Airbnb is not allowed in Quebec. A three-and-a-half percent tax on short-term rentals on the price. Operators must display government registration numbers on their ads and listings to comply with local regulations. There’s more. The federal government is now putting some rules in. The minister of housing has hinted at national regulation for short-term rentals affecting platforms like Vrbo and Airbnb. Tax changes when it comes to the CRA. CRA limits income tax deductions on short-term rentals to tackle the housing shortage.

11:30
Kyle Mazzuchin
From January 1, 2024, no tax deductions for short-term rental expenses in restricted areas, so this impacts Airbnb and Vrbo again. Further, if you own a trust or have some sort of holding company, the underused housing tax hasn’t been talked about as much. There’s a federal 1% tax on vacant or underused houses in Canada like BC. Right now, you’re all filling out any sort of vacancy reporting to the provincial government of British Columbia. So what does that in terms of its application? It targets foreign national owners, and may also apply to certain Canadian owners like partners, trustees, and corporations. Calculation exemptions based on the assessed value or recent sale price, exemptions available for specific entities and situations.

12:25
Kyle Mazzuchin
But if you don’t comply, CRA is going to be knocking at your door to get some sort of penalties which could go from a $10,000 fine if you haven’t registered yet. And obviously, they’re changing as well. So please talk to your accountant here in the next little while because the deadline is coming up for personal income taxes at the end of April and in June for business, for self customers. Popular places to purchase real estate. The biggest one. We all love Florida, especially you eastern Canadians, the Quebecers, and Ontarians. Very popular, very warm retirement areas, offer diverse options at affordable prices and also a large Canadian community. Arizona is preferred by Canadians for its dry, mild climate, especially for its winters. Got to love the Grand Canyon. Super Dry Monument Valley, then also you can probably watch hockey games.

13:23
Kyle Mazzuchin
A lot cheaper than going to the Leafs games or Vancouver Canucks. California has the biggest population size of Canada, 36 million. Same size as Canada pretty well. Diverse lifestyles with oceans and mountains and forests and vineyards. Lots of business and entertainment opportunities with Hollywood being nearby. Range of properties for people that want to go there and some prices in some areas are also a little bit higher. Who would have thought Louisiana with a rich French history and, a unique blend of influences, right near the ocean, has its own culture as well? So fantastic to see you there, especially during Mardi Gras. Montana, close to Alberta. Beautiful, nature enthusiasts with an abundance of outdoor activities for you hunters out there, even you skiers. Offers landscapes, mountains, lakes, and rivers and in comparison to other states, a very low population.

14:26
Kyle Mazzuchin
Also, one state that you wouldn’t have thought about, is South Carolina. Appeals to Canadians for its charm, hospitality, and mild climate. Sandy Beaches, can’t go wrong, also its rich history. So U.S. mortgage overview. What does that mean to you? Again, no credit is required. That little AUM there, so you don’t have to take money from your bank account, leave it at a bank in the United States. So assets are under administration. You don’t have to worry about that. You can keep your hard-earned money where it is, where you are. Foreign income is allowed. Loans and programs in all 50 states. Some other pieces to consider and focus on. So you’re Canadian, you’re considered a foreign national. That means that you can purchase up to 75% loan to value or a 25% down payment.

15:19
Kyle Mazzuchin
So if you give us the proper documentation that’s requested, we’ll be able to give you a loan approval in 72 hours. We can close your mortgage application in 30 to 45 days, and consign at any sort of local U.S. embassy. Or we do have some alternative options to help make the process painless. We can also do a purchase, refinance, or equity release, whichever is the need. We can go 30 years amortization regardless of age. Ten-year servicing facilities and loan programs without income are available. The one thing that we’re very proud of here at America Mortgages is that 97% of the loan applications that are submitted are approved. And we’re truly 24/7. You contact us on our website, americamortgages.com.

16:12
Kyle Mazzuchin
You click on our website if you want to have a chat at 02:00 in the morning, there’s someone there for you to chat about U.S. real estate let’s look at our loan program, shall we? So here’s the process. Number one, you talk to me. Second, we choose a program after our initial conversation and or consultation. Third, you provide the relative documents, and then I provide you with the loan approval. Number five, we review your loan approval with the loan officer. And then six, we order the appraisal to make sure that whatever you are purchasing, the value matches market value. We’ll look at underwriting conditions. We’ll communicate with you throughout the full process. You will receive emails to make sure that we’re clarifying certain pieces for insurance.

17:06
Kyle Mazzuchin
All those pieces, making sure that your application is nice and clean going through, and that we’re working with the lender to make sure that they’re satisfied with their conditions as well. Then probably the best part, the signing is arranged. And then the money is out the door and it closes and you receive your keys in your hands. Some of our programs. One thing I’m passionate about is the AM rental coverage program. No personal income is required. We qualify only on the property’s projected rental income. Yes, only on the projected rental income. No U.S. credit or residency is required. So if we go back on some of the slides that we had, in Canada, most of the major provinces have some sort of restrictions. Loan amounts are from at least $150,000 to $3 million. So that’s a big part of the market.

18:05
Kyle Mazzuchin
Some loan structures, for example, have a 30-year fixed and interest-only facility available, and again, we close in 30 to 45 days. How do you qualify? You don’t even need one to 1 to 1. 0.75 to 1 for your rental coverage. So total mortgage payment, principal, interest, taxes, and insurance, are $1,000. You only need $750 of income to qualify for this. Fantastic. The investor program. So we can use foreign income, but tax returns aren’t required. I bet you’re going, what? I don’t need tax returns. We qualify based on income letters from either your employer, your home country, or your accountant. We use a two-year average. We can go into the particulars of that particular program later. We don’t need any sort of U.S. credit or residency.

19:00
Kyle Mazzuchin
Again, the loan amounts between $150,000 to $3 million. 30-year fixed and interest-only facilities are available and 75% financing for new purchases. And again, we can close in 30 to 45 days. Again, how to qualify? You’re reporting $10,000 on your letter. Your mortgage payment, taxes, and insurance can exceed 43%, in this case, $4,300. Do a bit of analysis. Debt to income ratio or in Canada, TDSR. So for you bankers, and mortgage brokers out there, the total debt servicing ratio in the U.S. is called DTI, debt to income ratio. So if you are a U.S. citizen living in Canada, I’m sure you’ve been through maybe even a couple of applications. So for us, we ask for two years of U.S. income taxes only the same as if you were working in the States. So you’d qualify under the same criteria as if you were living there.

19:55
Kyle Mazzuchin
No U.S. residency is needed. U.S. score of 680 or higher for your FICO score. And again $150,000 to $5 million for that. Then also, 30 to 45 days closing as well, in case you need to have that rush. Again, expectations should be a little bit different between Canada and the U.S. when it comes to closing your mortgages. 30 to 45 days is considered lightning fast. So just to kind of put that little tidbit out there for you. So, how does it work? $4,300 if we’re going to consider mortgage payment taxes and insurance. Gross personal income based on a two-year average, based on your U.S. tax returns. So your 1040s, your W-2s, and W-4s can exceed 43% for the DTI, in this case, debt to income ratio.

20:45
Kyle Mazzuchin
if we were to translate it to Canada, the total debt servicing ratio for some of you investment advisors. If you want to use a portfolio, we can utilize that over a two-month average. So if you have customers with a high net worth, who want to buy this huge mansion in Florida, but are worried about qualifying? It’s not so bad. You don’t have to take the money that you’re controlling. You don’t have to give it to the bank where we’re going to be placing it. No U.S. credit is required as well. We’ll ask you for a borrowell.com statement Equifax from your local province. Or you would provide that, really easy to get loans up from $3 million to $100 million. And then again closing within 30 to 45 days.

21:36
Kyle Mazzuchin
America Mortgages’ high net worth program will take the average of the portfolio at $5 million divided over the fixed rate term. Let’s use five years as an example. If the mortgage payment, tax, and insurance don’t exceed $83,333, you’ll be able to qualify. Some of you have grade twelve student doing their MCAT, doing their exams. They’re looking at some of the U.S. states or schools to have quality education. You can qualify based on projected income and have your child essentially live on the property. Also, we can have them on title and some net benefits of that would be if they were to provide or if they were to stay and get the residency, it helps them open the door for getting their U.S. credit score established.

22:38
Kyle Mazzuchin
Some thresholds to meet loan amounts between 150,000 and $3 million and 30 to 45 days to close. qualification, rental income, and property expenses have to match at least one-to-one for this particular product. So in this case, $2,400 for the income, principal and interest, and tax insurance don’t exceed $2,400 as well. One-to-one coverage, we’re approved. Fantastic. A little bit more sophistication. We do have commercial-based products, multifamily units with five units or more. So if you have six or seven units in heritage homes, because heritage homes are normally built huge, and if you’re subdividing the units inside it, you’ll be able to qualify for our AM commercial + program. No personal income is required. No recourse is available. No U.S. credit is required. Available between $1 million to $100 million in communities across the United States.

23:45
Kyle Mazzuchin
portfolio, you have more than ten U.S. properties. You need a mortgage. You don’t want to provide essentially all your paperwork just for the one house. We can cross-collateralize most of your portfolio with four properties or more. No personal income is required. Loan amounts between $250,000 to a million dollars in this particular case. And 40 to 60 days need a little bit more because of the complexity of getting all your tax returns, and Excel spreadsheets, organizing them, and sending them to the lender on your behalf. So some information about us here at America Mortgages, where we’re located, and then my information at the bottom. You can reach me at [email protected] or you can reach me at 778-838-9654. Then we’ll have my calendar link if you would like a consultation in regards to this particular presentation as well.

24:47
Kyle Mazzuchin
So, that’s our presentation for today. We’ll be opening up a Q&A here with Mr. Robert Chadwick, who’s the co-CEO and currently joining us right now. So really fantastic to have the amount of audience here today, Robert. We do have a series of questions and people in the chat here. So how are you, Robert? Maybe let’s talk about how you’re doing today.

25:18
Robert Chadwick
Yeah. I’m well, Kyle, thanks. Great information, especially for me to see the challenges that even Canada has these days when people are looking to invest in real estate domestically. So our clients, in general, are more sophisticated, more educated, and more affluent, because they are smart enough to look at markets outside of their natural. I think you represented this perfectly. The advantages the U.S. real estate market has, not only just Canada but if you talk about global markets, no stamp duties, all of these things that impact the opportunity for a borrower to get wealth or to create a viable portfolio that they can sell at retirement, take passive income or even pass it down generationally. The U.S. is by far the best market.

26:16
Kyle Mazzuchin
I would agree. After I had my own rental transactions personally, paying land transfer taxes to the local province, there’s part of me being a citizen. Definitely, taxes are required, but sometimes having an extra $30,000, some people may not have that to pay for their house. And seeing where historic lows during the pandemic to where it is today, every dollar is being counted for cash-flow and everything like that. So totally agree with you, Robert, on that. Looks like we got a bit of questions here. Just going to open it up here and we’ll take a look. We got Anthony Galano here asking if can canadians sign mortgage documents remotely via DocuSign for properties purchased in New York. Yeah, we can.

27:04
Kyle Mazzuchin
So we utilize some services, depending on the lender that we choose. They can be done through notarial means, through online services. So, we’ll take a look at that, which is fantastic. A lot of flexibility there for you to sign from home, but a lot easier would be to go to the local American embassy if you’re in a major city like Vancouver or Toronto.

27:34
Robert Chadwick
Sorry, Kyle. Let me expand on that as well, because I think we see this a lot, you and I, as clients, whether they’re in Canada or anywhere else in the world, think where do we sign? Canada is unique. Because it is very close to the U.S., you will see maybe a lot of people that will fly over to the U.S. to sign, which is perfectly fine. But we’ve got a multitude of ways for people to sign their mortgage documents as conveniently as possible. Certainly, if a remote notary is allowed, kind of like signing it over a Zoom, that’s possible depending on the country that you’re in and the state that you’re obtaining the mortgage.

28:20
Robert Chadwick
But if your country is part of the Hague, you can sign with an Apostille, meaning that you can go to your local notary and sign with your local notary and that local notary gets it apostille stamped. And it’s normally at the high court or whatever the regional thing is there in that country. That’s sufficient and it makes it a very easy process for the borrower. Certainly going to the U.S. embassy if it’s convenient or the consulate is absolutely an option. But we’ve tried to provide the availability for you to sign in a multitude of ways, depending on whatever is the most convenient for you.

29:10
Robert Chadwick
So I think, Kyle, you’ve had various experiences with this, but anytime that your clients want to sign and they have a question about how we do it, it’s best to speak to your loan officer and do it from the very beginning and already set up the structure because U.S. embassy appointments, just like anything else, is not always available and easy.

29:36
Kyle Mazzuchin
So Canada, the local notary is fine. We’ll look at it on a one-off basis and get you some clarity on that. Being so close to the border, really nice. For example, I can take a ferry across to probably Seattle from where I am in the world. So second question, we got a lot of questions. As a Canadian, what would be the best way to register a property? Using company or personal?

30:03
Robert Chadwick
Yeah, a lot of people these days are using a limited liability corporation. An LLC is probably what it’s better known as. It gives you a variety of protections. Whether it is some sort of tax protection, some sort of asset protection, or personal protection in case maybe somebody gets injured in the property that you’re renting, there’s no direct path to you. They’re just going to go into the LLC and however, that works with the attorneys. But this is the most common way to structure the ownership of a property. So what it means is the borrowers are responsible for the mortgage, anything like Canada, the same thing. But the ownership of the property or how the property is held is held in an entity and it makes it a very easy process. And again, this is one of the great things about U.S. real estate investing.

31:11
Kyle Mazzuchin
Excellent. Just to translate that to Canadian. So if you have a holding company and you have a slew of properties with a big chartered bank, bank of Montreal, Toronto, Dominion, RBC, they’ll have a personal guarantee on that making sure it’s nonoperating. So essentially that translates to a limited liability company and then you would be guaranteeing the mortgage on that as well. In terms of operating, I don’t want to get too far. I don’t have my CPA. So again, you may want to get some tax advice through a cross-border specialist, or you can go to our website, americamortgages.com, go to the concierge, fill out our tax advice form, and then we’ll have one of our partners get a hold of you in due course. All right, so third question today.

31:56
Kyle Mazzuchin
How do I go about opening a cross-border bank account and would America Mortgages help me with that? My spouse is from Japan, I have multiple currency accounts with wise.com, which open up utilizing the U.S. dollar piece. It does qualify as well. And if you need help with that, all of our loan officers will have a particular way of assisting you. Or if you would like, if you’re in southern Ontario, you want to travel to New York, just go to your local bank nearby and you can also open up a bank account there. Our fourth question today is, are there any preliminary steps I can take to make sure the approval process goes smoothly? Robert?

32:47
Robert Chadwick
Oh, super good question. Our whole business model is the customer journey needs to be smooth. That’s really what we focus on. The first thing you do before you start looking for real estate at all is to make sure that you get pre-approved for a loan. I mean, you want to know how much the payment is going to be, what kind of interest rates you have, what kind of terms you qualify for. One of the things, Kyle and I talked about this earlier that we’re super proud of, is 97% of our loan applications get approved. And normally if they don’t get approved, it’s not an issue with the borrower, it’s normally an issue with the property that they’re trying to buy or refinance.

33:32
Robert Chadwick
So making the process, following what the loan officer or our processing team sends you, and responding to emails promptly will make the process as smooth as possible. All of our loan officers, and I think this is imperative if you want to be successful as a loan officer, need to be super organized. And we realize that not everybody works that way. I mean, I’m probably not as organized as I should be, but as long as you’re following what the loan officers say, and our loan officers have exceptional training and this is all we do, 100% foreign national or expat lending, the process will be smooth. Certainly, like anything, there are maybe some bumps in the road, things that come up that we’re not expecting. But again, because this is all we do, we try to foresee this in the beginning.

34:28
Robert Chadwick
So to answer the question maybe a little bit more clearly, I think following what the loan officers or the processing team instructs promptly will make this process go as smoothly as possible.

34:42
Kyle Mazzuchin
Excellent. Thanks, Robert, for that. Another question. We got 18 of them in full, so hopefully we have enough time to get through them here. So how long will it take for a non-U.S. resident to get pre-approved? And how much does a pre-approval cost?

34:58
Robert Chadwick
Well, the great thing is it costs nothing except for some time. Our documentation, as Kyle had pointed out, is very simplified. Because we’re doing loans for borrowers all over the world, whether they’re from Sydney to Shanghai, we’ve tried to make this process as simple as possible and with as limited paperwork to make it a viable, common sense loan, but without over cumbersome of having to go through ten years of tax returns and dissect this and that. The loan process, once you send in the documents, takes about 72 hours, Kyle, right now, to issue a loan approval. And this is what is awesome. Once you have that loan approval, we issue you a letter. Once you have this letter, this is powerful.

35:57
Robert Chadwick
When you find a property that you want to buy, you turn this letter in with the offer to the realtor, and that realtor knows that Kyle is behind you, America Mortgages is behind him, and you have the mortgage financing in.

36:11
Kyle Mazzuchin
Excellent. So free, zero investment of your time to make sure that this goes smoothly. And communication. Communication is really good. So our next question is here. As a foreigner or non-U.S. resident, what is the maximum loan-to-value available? And is the loan to value dependent on income?

36:33
Robert Chadwick
So again, really good questions. The max loan to value for a non-U.S. citizen is 75%, and that’s across the board, which is really good. The LTV, there are two ways to qualify. Kyle had touched one of our loan programs, which we’re super proud of, where it is pure common sense underwriting. The way a rental property should qualify is based on what the rental income should generate. I mean, it just really makes sense. So we have a loan program that qualifies on the rental income of the property, and how we find what that rental income of the property is, is a third party appraiser, just as they would appraise your property when you’re purchasing. That also protects you to make sure you’re buying it at the right price and for the lender to make sure that they’re lending at the right value.

37:34
Robert Chadwick
But it also gives us a very accurate indication of what the general rents are in that area. That’s what’s used to qualify. There’s no funny business. It’s a very pure common sense underwriting on these loans. A lot of people think, oh, my gosh, they’re not asking for income. What’s happening? But if you think about it, this is the logical way that you should underwrite an investment property. And if you were to go on, does it depend on your income? If you’d like to provide income, rather than providing your tax returns and your end-of-year statement, we have a very simple way of doing this. And again, this has to do, because we’re doing this in various countries and various jurisdictions, doing it through tax returns would almost be impossible and time-consuming.

38:29
Robert Chadwick
We have a template, and Kyle will send you the template once you start the process. And that template is very straightforward. It says, the current year to date and the last two years of your income. That has to be completed by your employer if you’re employed, or by your accountant if it’s self-employed. Again, simple, easy, common sense ways of buying or obtaining a U.S. mortgage for investment property.

38:52
Kyle Mazzuchin
Excellent. Translation line 150 of your notice of assessment from your T-1 generals. So hence, just translating here for you folks that have maybe complicated lending, or if you have your T-2 generals from your corp, or if you have audited financial statements with review engagements or notice to the reader, we just take your gross for the two years and then a year to date, maybe even based on your bookkeeper, providing that to your accountant to validate. And then that’s all we need. We don’t need to have a stack of 40. We don’t need to take the French returns from Quebec, as they’re a little bit different than the normal English returns as well. So, simplified approach. Letters from your accountant or your employer. Next question.

39:36
Robert Chadwick
Go back to this. Think about this, Kyle. In Canada, things are in English, and it makes sense. Or maybe Quebec might be a little bit different. But can you imagine having to look at tax returns for a variety of countries around the world with people who have an interest in buying U.S. real estate? Again, this is like simplified, smart underwriting.

39:58
Kyle Mazzuchin
Like England, Singapore.

40:02
Robert Chadwick
Exactly.

40:03
Kyle Mazzuchin
Like how the stacks are, and then you have to translate it with a letter at the front from, say, Japan, and all of a sudden, same thing. It’s a little bit more, but not that much. But I wouldn’t want to go through pages.

40:14
Robert Chadwick
I agree.

40:16
Kyle Mazzuchin
So it appears that we have two questions from the same individual. Who pays for the appraisal? And what is the interest?

40:25
Robert Chadwick
So the appraisal is paid for by the borrower. And again, it makes sense. All the appraisals in the U.S. are done by a third party. It’s all handled by AMCs, appraisal management companies. They bill you directly. Never is there ever any money sent directly to us. Everything is either done through a third-party escrow or a vendor-like appraisal management company. So you’d be responsible for paying the appraisal, but that’s the only cost that you would have out of pocket initially when the transaction occurs. As for the interest, it’s reliant on a variety of things. How you qualify, whether you’re going to qualify just off of the cash-flow property, you want to qualify by providing an income letter. You’re a U.S. citizen, you’re a foreign national, it’s based on your loan to value.

41:28
Robert Chadwick
There’s a wide range of what the interest rate is, but what’s so fantastic about that is if you want a lower rate, you just comply with whatever the requirements are on our program. If you’re not so rate-conscious because you want to buy a property now before interest rates go down and property values go up, then you take it at the most favorable terms for you, but maybe at a higher rate, and then you just refinance down the road.

41:57
Kyle Mazzuchin
Excellent. So hopefully that answers your question. The next question is, does anything change if I have an LLC? I think went through that a little bit there. Nothing changes except for your guarantee and it’s on the title. So then also please get your proper tax advice either through the concierge tab on our website or by going to your cross-border account within your local jurisdiction. Next question. If I already own four properties in Canada, am I eligible to get financed from us? Is there a limit on properties owned?

42:36
Robert Chadwick
That is a super question. And before I answer that, if you look at the group chat in the webinar, you can see a link to book a meeting with Kyle directly. After this webinar, or even actually during the webinar, if you want to arrange something on his calendar, Kyle’s calendar is open very early, very late, as I can attest. You can arrange something directly through the chat. But to answer the question, there are no limits to the number of properties that foreign nationals can own in the U.S. What also makes this quite interesting there are no limits on the loan to value. So whether you want to buy one property or you want to buy hundreds of properties, you can still obtain the maximum amount of value depending on what you choose.

43:35
Robert Chadwick
In most cases, it’s 75%, but there are no restrictions on it. Again, I’m currently based in Singapore. Because all of our clients are global, we try to make sure that our loan officers are also global and understand the market. But countries like Singapore, for example, have a variety of cooling measures, which makes absolute sense when you’re talking about a small country and high real estate prices. Or as you’ve seen in Canada, Kyle, the real estate prices are going through the roof. People are more affluent, but also a lot of foreign investors are coming in, and so they need to put certain restrictions. The U.S. is a free market society. They’re a free market when it comes to real estate. They’re not going to put restrictions on seeing properties appreciate, seeing rents appreciate.

44:37
Robert Chadwick
in certain states, there may be rent control and so forth, but don’t buy in there. You have 50 states to choose from. You have hundreds of cities. Find something that works for you and then buy that. Again, Kyle, you can translate into Canadian for me, but it’s unlimited.

44:57
Kyle Mazzuchin
Foreign buyers ban, guys, Canada, we got the ban now extended for another two years. To Robert’s point, free market over control. We don’t need to get into any further examples of that. So thank you very much, Robert, for that answer. A couple of other questions on a follow-up here. What are the fees that we charge and what are the rates of the current fees?

45:23
Robert Chadwick
we charge a very standard market rate of 2% of the loan transaction that is only paid at closing. If for whatever reason, you don’t fall into that 97%, you wouldn’t have to pay anything except for maybe the cost of the appraisal for the transaction. But you own that appraisal. We don’t own that appraisal. It’s yours. It’s very standard across the U.S. Interest rates for foreign nationals. I think the easiest way to figure it out is about 1% higher than what a U.S. citizen would pay if they were buying an investment property. Again, it’s dependent on the loan to value how you qualify, and so forth. But I think right now if you’re looking at rates in the eight, sometimes in the sevens, it’s still fantastic.

46:22
Robert Chadwick
We’ve been pushing this narrative for a while, and not to kind of go on a tangent, but interest rates will come down. In my personal opinion almost 30 years of mortgage lending, as we get closer to the election, will be used as a tool to boost the economy and confidence and so forth. It’s important to buy now. Once these rates come down, all of these people who have been sitting on these low-interest rates, owner-occupied properties that have wanted to upgrade, or all these people who have been waiting to buy their owner-occupied are just sitting on the sidelines. As soon as rates go down, property value is going to skyrocket again. And if you buy before that, you’re going to immediately see that and refinance later.

47:15
Kyle Mazzuchin
Yes. So speaking of skyrocketing, if you’re in Houston, you may have a problem near NASA, near Cape Canaveral in Florida. If the values are there, the rockets are going up, too. So take advantage if you can. Some other questions here. So, is there any prepayment penalty?

47:32
Robert Chadwick
Yeah, it’s a good question. It’s asked all the time. It makes sense, you would be concerned about it. On most investment properties, there’s anywhere from a three-year to a five-year prepayment penalty. This can be reduced, it can be bought down, so you can pay a fee to the lender to reduce it. I think when you talk to your loan officer, the most important thing is to just have clarity on what are you going to do with this property. I’m going to hold it for ten years. And really, the prepayment penalty doesn’t matter. If you’re going to hold it for a couple of years, then you structure it that way. And again, that’s what makes us good at what we do. And Kyle is fantastic.

48:18
Robert Chadwick
taking all the particulars of a client and finding out exactly what they want to do not just today, but what they want to do in the future with their investment property. We’re here for your journey, not just this one transaction. So certainly, there is a prepayment penalty. There are ways to mitigate it. There are options to even remove the prepayment penalty. But it’s important to look at what the process is and how you want to handle the property now and in the future.

48:47
Kyle Mazzuchin
Definitely. To our viewers, holistic conversations are critical to making sure that we understand your future and what your investments are going to look like. I’m not putting the bank hand at all, by any means. I’m just using our experience as an organization and a relative experience to emphasize the confidence that we need to ask, what does the future look like for you when going through these transactions, then we’ll provide you with the best avenue possible to, bankers term, mitigate what the future would look like for the customers. A couple more questions here. How about restaurant businesses with the property? The rent is 14 grand, asking price of two million. How do we calculate it?

49:37
Robert Chadwick
Kyle, you’re generating some great questions. This is something we’ve received many times, not just in restaurants, but gas stations seem to be a very keen thing to acquire. Unfortunately, we only do real estate lending. So if you want to buy a restaurant, it’s possible to be able to lend on that building that that restaurant is in. But being able to provide a business loan to purchase that restaurant, some options are probably out there. It’s just not something that we deal with.

50:14
Kyle Mazzuchin
Excellent. Another question. Can you get a mortgage in a U.S. C Corp?

50:22
Robert Chadwick
yes, not the mortgage. You can hold the title in a C Corp if that’s what you choose. Kyle had stated this a few times. It’s important to talk to your accountant and see what’s the best structure. When you say, can you get a mortgage in a C Corp? the mortgage itself is given to the individual. So whoever the borrower is, that’s actually who has the mortgage. How the title of the property is held, is what can be in an entity. So again, if you don’t have a CPA, we have an awesome CPA that we use regularly that much like us has expertise in foreign nationals and U.S. expats.

51:13
Robert Chadwick
So if you want the referral, you can go to our website and go to our concierge page, or you can message or email Kyle directly, and he can give you the CPA’s contact.

51:23
Kyle Mazzuchin
or even WhatsApp.

51:26
Robert Chadwick
Yes, exactly.

51:29
Kyle Mazzuchin
Any sort of tool. We got four more on the go here down the list. What are our commercial mortgage rates and how many basis points over the ten-year treasury?

51:43
Robert Chadwick
Again, good question. We do have a commercial loan specialist on duty. He spent ten years doing commercial mortgages at Wells Fargo. American citizen, living in Asia, super knowledgeable. I would suggest after this webinar, you reach out to Kyle or reach out to our company, and we’re happy to put you in touch with Nick. Again, I probably should know this right off, but I don’t. I apologize. And again, that’s the great thing. You have a question about Canada, how you structure it as a Canadian, you have a question about somebody in Europe, somebody in Asia. We have people all over the world, and that’s what makes us unique and makes us quite successful.

52:36
Kyle Mazzuchin
Good. Not answering your question, but we’ll be able to do it with some of the other individuals who are on our staff there. Another question here. So what is the maximum loan-to-value a Canadian can get on a DCR loan, Cash out refinance for two units or more?

52:56
Robert Chadwick
So if you’re looking to cash-out, you should be able to get 70%, assuming that the rents are sufficient to cover the debt servicing.

53:10
Kyle Mazzuchin
Excellent. Next question. Does approval guarantee funds release? How reliable is it by itself and is it binding?

53:20
Robert Chadwick
Very good question. The initial approval letter that we receive or that we give to you after you provide us with all your documents is a pre-approval letter, meaning that we’ve gone through the process, we’ve put you into underwriting. The underwriter says, okay, based on what they provided, this loan will go through. Now, like anything in the world, there are always things that come up. Maybe there’s a question that they have on your bank statement. Maybe there’s a question about the property. So there is never a guarantee until the actual loan is funded. But if you go to the fact that we close 97% of our transactions, I think you’ve got a pretty good assurance of the loan funding.

54:12
Robert Chadwick
But again, working with experts like Kyle and the rest of the America Mortgages teams, the issues that many foreign nationals expats come into when they deal with a foreign bank or a local broker or some broker that they contact in the U.S., you’re likely not going to have with us. I’ll put it in an analogy. If you’re going to get your Volkswagen repaired, you’re not going to go to a Toyota dealer. Yeah, probably it’s a car. They’re going to be able to fix it. They know they work on cars every day, but they don’t work on Volkswagens every day. So it’s the same thing with a mortgage. Why would you go to obtain a foreign national mortgage from somebody who maybe sees 1 out of 100? Again, this is all we do.

55:08
Robert Chadwick
Sorry, going on a little bit of a tangent, but to answer your question, there’s no guarantee of funds release. But with a 97% close rate, I think you’ve got a really good team behind you and good assurance that it will fund.

55:25
Kyle Mazzuchin
Awesome. Thank you very much for putting that answer together. I think we’re down to the last two. Is it possible to know the approximate mortgage interest and brokerage fees I can expect when closing a mortgage with you in this market?

55:42
Robert Chadwick
So we answered that a little bit with another question. We charge the very standard 2% of the loan amount on a transaction. What makes the U.S. very transparent? And Kyle had sort of covered this in the very beginning. When you apply for a mortgage, within three days, you receive mortgage disclosures. Those mortgage disclosures break down all the costs of that loan. When you see this and you read this, if you’re comfortable with it, certainly the loan officer will go over it with you if you have questions. You acknowledge that. Okay, I understand this and this is okay. But the most important thing is when you go to sign your mortgage at closing, you’re not going to say like, “What the hell, Kyle? You told me it was x and now it’s y.” That absolutely won’t happen.

56:38
Robert Chadwick
The final figure, the final number has to be at the number that you agree to or below. When it comes to closing costs, it’s super transparent. When it comes to interest rates, I think probably the easiest way to calculate it is to look at what a U.S. citizen’s investment rate is and add about 1% to that, and that’ll give you a range. So I think right now we’re looking at in the eights and sometimes the high sevens. But with long amortizations, fixed interest only, it makes sense even at higher interest rates. And if the numbers work out, especially when you’re talking about the rental coverage loan, then it shouldn’t always be about the rate. It should be more about what am I buying this property at and what kind of yield can I get.

57:30
Kyle Mazzuchin
So, to answer in another way as well, holistic conversations are important. What’s most important to you? How are you holding in the asset? So, having these conversations during our calls is very important. And then the last question. If you have a good Canadian credit rating of more than 800, can you use that to qualify for better mortgage rates in the United States?

57:56
Robert Chadwick
Another good question. No. To make it Canadian, all we want to see is that you’re able to manage and you’re responsible for credit. And whether it’s your Canadian credit or credit in the UK or credit in Hong Kong, the most important thing for us is we look, are there defaults, are there foreclosures, are there bankruptcies? But the score, because they range depending on which country you’re in, unfortunately, and maybe it should be and maybe it will be considered in the future, but doesn’t impact the rate. The rate is determined really by the loan to value and how you qualify.

58:45
Kyle Mazzuchin
Excellent. So that’s all of our questions so far. Maybe we’ll just take a look in the chat here, and see if there are any comments. No comments there, but to look at other pieces. So everybody, my link, if you would like to book an appointment, is currently in the chat. Please copy and paste it or click on it. And then you can pick a time where you’re able to pick a time to speak with me as the VP of Canadian markets. I’m local to your time zone within four and a half, from Tofino, British Columbia to St. John’s, Newfoundland. And if you live anywhere near the North Pole, you can’t get a mortgage on an igloo. Then obviously, you can just go to our website as well.

59:32
Kyle Mazzuchin
We do have other languages as well, from Spanish to many other languages on our team, so we’ll be able to assist. We do have another Canadian living in Alberta as well on our team, so we can translate the American ease to Canadian ease in terms of that. Also, we do have another announcement to make. We do have another webinar in three weeks pertaining to property management. So we’re very excited about that. Hopefully, you all have found this to be an informative discussion. And thank you all very much for taking time out of your busy day. I know on the Pacific side, 4:30 to 5:30, everyone’s planning to go home. And on the east coast of Canada, we’re looking at about 7:30 to 8:30. So hopefully you found this to be informative.

01:00:32
Kyle Mazzuchin
If you’re interested in our mortgages, reach out to me, at [email protected]. Reach out to me at 778-838-9654. If you want to talk to Robert directly, he’s also readily available. Probably not many other companies have access to any of our senior leaders, so please be able to do that. Oh, looks like we have a couple more questions coming in., if you have an ITIN score, does it get you better rates?

01:01:01
Robert Chadwick
It could. Not only could it get you better rates, it might even be able to get you a higher loan to value. So I think that’s something that you discuss with the loan officers, depending on the programs that you choose.

01:01:17
Kyle Mazzuchin
And then our last question that just came in, can we get a copy of today’s presentation?

01:01:22
Robert Chadwick
Yes. Well, this webinar will probably be available post-editing in maybe a week, and it will get sent out to everybody who had joined and also people who maybe had joined that weren’t able to attend the meeting. But it’s also on our website, so it’ll be loaded onto the website. You can find it on our YouTube channel. There’s a variety of ways to see it. But not just this webinar. We’ve done about 100 webinars. So whether you want to learn about taxes, immigration, EB-5, mortgage financing for commercial properties, or whatever it may be, you’ll probably be able to find that webinar.

01:02:13
Kyle Mazzuchin
Very cool. And then also, our first Canadian webinar for American investing. It’s the first. So, very proud, as the second largest investment country to the U.S. We’re now over. So thank you all very much for your time. Please again, contact us at www.americamortgages.com, [email protected], or 778-838-9654. Thank you all very much and have a wonderful evening.

01:02:45
Robert Chadwick
Thank you, everyone. Thank you, Kyle, for having me

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