14:02
Speaker 1
Hello. Hello, everybody. Good to see everybody again. See some friendly faces and names on the screen. You know, there’s a lot of stuff happening in the world I think, you know, what I wanted to do is reach out to our, what I wanted to do is reach out to the audience and let everybody know what we’re thinking about the current in real estate investing environment, especially with respect to the tariffs. Now I’ve been speaking at a lot of events about this subject. What I’m going to do is lay out the framework of my thought process and then we’ll go into a short presentation with about, you know, 10 or so slides and then we’ll, we’ll finalize, we’ll end with some Q and A. You know, the tariffs have caused a lot of uncertainty, myself included.
15:01
Speaker 1
I think we’re all kind of waiting to see what will happen. But, you know, what’s important to note is that. This is Michael. Matthew, I see you. Can you turn the video off? Hi, Matthew. Can you turn your video off? So what I wanted to do is, you know, everybody, there’s a lot of uneasiness, but what I wanted to accomplish is talk about US Real estate investment as an asset class. Now, just like investing in stocks or other asset classes, you know, we are conditioned to have certain biases, but it’s important to remove the emotions, look at the facts, and make our decisions according to the facts. And what I want to accomplish today is lay out the foundation of why I think U. S.
15:56
Speaker 1
Real estate investing is actually the, one of the best, if not the best assets to invest in because of certain fundamentals that are undisputable. So on the next, you know, when I go into the presentation, I’m gonna show you some slides that prove the fact that this could be not a better time to start investing in real estate because the supply demand landscape is so dislocated that people who can afford to make these investments are going to better off over the long term. Now what makes the US Better than any other real estate investment market is that it’s the only major country and economy that gives you double digit rental yields plus capital appreciation potential. Now everybody’s thinking, well, you know, these tariffs, you know, is it bad for the economy and all these type of things?
17:00
Speaker 1
And, and quite frankly, I guess we’re seeing some of that. There’s a lot of uneasiness. But I’m just going to tell you one thing. In 2000, and I’m going to show you these charts. But in 2022, literally the worst thing that could have happened to the real estate market was that interest rates went from 0.25. These are fed funds rates went from 0.25 to 4 in a year, and in that year, home prices went up 10%. So my point being is that we’ve seen the worst. And I’m going to. Over the next few slides, I’m going to present the case that structurally, US Home prices are going to be forced up and so are rental yields. And I’ll go into the reasons why and, you know, the tariff situations. We can talk.
17:50
Speaker 1
I’ve done quite a lot of, quite a bit of research on this. I talk about, you know, tariffs and how it impact economies, you know, in private events. However, this presentation is about how it affects the U. S. Real estate market. So with that said, I’m going to go into the slides. Hopefully this won’t be too boring for everybody. So here we go, the first slide. Okay, so this is going to be a contentious, you know, thing I’m going to say, but, you know, the old American dream was you work hard. And this dates back to, you know, the baby boomers, right after the war. You got a job. It was, you know, you were the first to go to big cities to get a job.
18:37
Speaker 1
And, you know, your dream of having a family and owning a home, that was the definition of the American dream. Now, the American dream, that specific definition, I’m going to argue is dead. The opportunity. And, you know, I think it’s really important that when you’re investing, you got to take off your hat for primary investment and look at this as just a pure investment. And so, you know, the folks in America that are looking to, you know, work hard and own a home, it’s really difficult. And I’m going to show you some statistics to prove that. But the new American dream, I will argue, is that instead of owning a home, you may rent.
19:23
Speaker 1
And that’s good for us as property investors because, you know, part of, you know, we’ve all heard of the Maslovsky, you know, five basic needs, and one of them is you need a roof over your head, you need food and all that kind of stuff. But so we’re slowly moving into a world where more Americans are renting, and that’s not slowing down. In fact, 12% Americans are currently renting, and that’s increasing significantly year on year. But the new American dream is that we now have more avenues to make money, right? So while we may not be able to own a home, there’s different avenues to make money. Whether you’re trading, you know, trading crypto or trading stocks or, you know, you’re advertising on TikTok or you have your own YouTube channel or you’re selling things on Amazon, whatever it is.
20:07
Speaker 1
Those types of ways to make money didn’t exist when I was growing up. When I was growing up, you worked really hard. You worked at a company for 20, 30 years. You have a pension, hopefully you were able to buy a home and you make some good investments and then you retire, then you move to Florida and you play golf. That, that is being redefined now. So the next slide is, the next few slides are going to show this. All right, so this is factual, right? So you know, you can Google this on your own, you can use ChatGPT. But the bottom line is that there is a massive home shortage in America. You know, anywhere you read it’s between 5 to 7 million home shortage.
20:48
Speaker 1
Now of course, you know, you’ll read some doomsday, you know, things on media like Florida, home prices are collapsing or Austin. But these are, you know, you have to do your research. Like during COVID people in California wanted to move to a state and to a city that looked more like San Francisco. And that was Austin, Texas, one of the most beautiful cities in America. But you saw a lot of buildup during COVID and now there’s a little bit of oversupply. The sun pockets of Florida are like that as well. But when you’re investing, you should do some research and I’ll go into some, some tricks on what, how I look at things. But you see here, we’re headed toward a landlord friendly era. This is, this is the Wall Street Journal just two months ago.
21:31
Speaker 1
So you’re going to see more of these anecdotes in the news. And I want you to pay attention to this because this is the mass market slowly coming on to what I’m about to present. There’s a lack of housing and guess what, that is actually not going to improve anytime soon because if I’m a homebuilder and I have to buy an electric drill and saws and screwdrivers, well, they’re all made in China and they’re twice as more as expensive. Most of the lumber that comes to that is used towards homebuilding comes from Canada. 70% of lumber for homebuilding comes from Canada. These are all things that are going to create no rush to go build homes, making this supply issue even worse for people looking to buy primary homes.
22:25
Speaker 1
It’s really good for us because we want to be in a market where supply isn’t increasing. So as a buyer of homes, you buy now, because of lack of supply and increased demand, prices go up, which I will show you factually in the next few slides. Now here, this is literally probably the most important slide. So if you can see my cursor here, this is 2022 fed, the blue line fed funds went from 25 basis points to 4% now. So that’s a 400% increase in fed funds rate which coincided with mortgage rates. Now if you didn’t look at this chart and I told you, what do you think home prices would have done? You would have said, oh my God, home prices would have collapsed. But in fact, if you look at the red line, they increased. Why is that?
23:20
Speaker 1
Because of the lack of supply. Now you look at what rental yields have done, they came down a little bit and they’re steadily going up, right? And you can think, you see the difference between the green line and the blue line. Well, that’s your profit. One’s a mortgage, I mean all things being equal kind of a mortgage rate. Actually the rental yields, that’s 2024, they’re higher now. But you know, you think over the long term mortgage rates are going down, rental yields, you see the trend, it’s going up because of lack of supply. And now here’s this little blip. This little blip was 2022-23 when you had like a mini three month banking crisis with FTX, Silicon Valley bank and Credit Suisse, all things disrupting the market. Home prices fell marginally 8% down and now it’s holding steady and increasing.
24:15
Speaker 1
So my point being, the point I’m trying to make is that we’ve seen almost the worst thing that can happen to home prices, which is mortgage rates increasing dramatically, and yet home prices are increasing. Now here’s a, something that, you know, when I say the American dream of owning a primary residence is dead, this is what I mean. The, the most commonly accepted ratio is that the, your salary should be three times, sorry, one third of the home that you’re trying to buy. Now the average home price, median home price in the US is 420,000, say 400,000, and the average salary is 60,000. So it’s either home prices drop 50% or salaries double, which ain’t happening, right?
25:16
Speaker 1
So this situation is so out of whack, which means the US is slowly moving into a world where they’re forced to rent and they’re going to get used to that concept. In fact, most of Europe rents So it’s a tough situation if you really want to own a home, to live in as a primary residence and build your family in the US but as a person like you, me and our audience here watching, you want to be a. This is a perfect situation to be a property investor. Now look at this. So under three is considered affordable in terms of primary. In terms of your home price to salary, 3 to 4 is moderately affordable and everything else is unaffordable. Look at the next slides. This is state by state, which means the only state in America which is considered affordable is West Virginia.
26:16
Speaker 1
The average home price is 155,000 and that median income is 52,000. You look at all the orange ones, which is some, like, moderately affordable. Kentucky, Louisiana, Mississippi, Arkansas, Ohio, Oklahoma. Now, you know, so there’s a, there’s a balance, right? So if, you know, and I’ll go into what makes the US really unique in terms of how it gentrifies. So these are some of the things that you want to look at, right? I mean, do you want to buy a home for investment purposes in California, which is totally unaffordable, or you want to look at some of these areas? Because if I’m a family in California and I say, honey, you know, it’s too expensive to live in California, let’s move to another state and let’s start fresh, right? I’ll get into some of this in further slides.
27:10
Speaker 1
These are some of the things you look at. You know, these are some of the ratios that you look at as a family to say, to determine where am I moving to? Obviously, you want to go to where there’s good school districts, there’s low crime, there’s abundant employment. But you also want to look at this if you want to own a home, these type of ratio. Now, you know, I’m, you know, hosting this webinar from Asia. But, you know, the US Regardless of, you know, what’s happening in the media over the past few years, is that it’s still a place where people want to send their kids to school. You know, if you’re outside the U.S. So all of our clients are living outside the U.S. Education is the primary reason why people buy properties in the US for investment purposes.
28:05
Speaker 1
And that’s not to say, you know, they want their kids to stay there or whatnot. It’s usually they would have gone to school in the U.S. Maybe they have a family member that lives in the US They’ve been to the US and wouldn’t mind their kid going to, their child going to university there, whatever it is. This attraction that education in the US provides is a real magnet. And as you can see, last year overseas international students were over 1 million. And that’s a 7% year on year increase. And that’s still, you know, increasing right now. Next slide. So this is super interesting. You know, the US gentrifies better than any, any other country, period.
28:48
Speaker 1
You know, if you’re working in a services industry in Sydney and it’s too expensive and Sydney is really expensive, it’s one of the most unaffordable cities in the world, you say, well, let’s move to Melbourne because home prices are less and you get a similar job, similar income. But then prices go up and you’re like, well that, you know, it’s getting, it’s honey, it’s getting expensive. In Melbourne you start to run out of cities to move to. You can go to Perth, Brisbane and then where do you go? Right, if you’re in London and you’re in the services industry, are you moving to Manchester or Tottenham or other cities? And it gets really difficult. But in the U.S. In fact, one of the most famous brands in the US is a brand called U Haul.
29:32
Speaker 1
Everybody knows of this brand and this was a brand that was started after the war where people could move around to different states. So if you can’t afford to live in California, you rent a U Haul, you put all your stuff in it and you drive to Texas and you start fresh. So my point being is that gentrification and state to state mobility is in the DNA of Americans. So while most of our audience are not Americans, we want to make our investments in states that attract this gentrification. So it’s usually cost of living, employment opportunities, you know, better schools for my kids and actually, you know, and availability of financing. You know, I want to be able to move from California to Texas, but I still want to be able to get a mortgage.
30:25
Speaker 1
Well, that, you know, financing is abundant, you know, in the US and you know, for us we’re a U S bank, so. And all we focus on is people like you in the audience who want to take advantage of this real estate opportunity and with leverage you can enhance your returns, which I’ll get into towards the end of this presentation. But the way the US is formed, you know, many of the cities are on a grid base for, for this reason that it’s, it allows cities like Dallas, Fort Worth and La to, to expand outwards. Because after the, you know, when us first started, they knew that gentrification was important and they created, you know, most cities, large cities on a grid formation that allowed for urban formation. But, but more importantly, it has a culture of migration. I’ll give you an example.
31:18
Speaker 1
So these are the top 10 states that saw the highest population increases. Okay, Texas, North Carolinas, Florida, Tennessee, Georgia. So these six states are what we call the southeast corridor. Did you know that in the southeast corridor are building nine EV factories, each hiring between 2 to 9,000 people? And so, you know, if I’m moving from New York to Texas or California because it’s too expensive to Texas or to Florida, I’m thinking, where can I get a job? Google that. On, on, you know, search for that on Google and you see these states and then, you know, families will do their own research. But what do these states have in common? Well, just looking at it, I, I know that Texas has no state tax, Florida has no state tax. But to me it looks like it’s cost of living. Right.
32:19
Speaker 1
So next slide these. So if I’m in these states and I want to move, I look at these things. What’s income tax? Well, look at Wyoming, Alaska. Well, maybe we’re not going to move to Alaska, but Florida, Tennessee, Nevada, Texas. What I’m trying to say is as an investor, I want to do homework because I want to front run or preempt what these people who are immigrating to the states, why are they moving there? Well, they’re obviously moving there because cost of living tax is a big component of this. So as you can see, Texas comes up on a lot of screens because there’s no income tax, state tax, sorry. So another thing, you know, you look at the CHIPS Act. So CHIPS act was Biden’s one of the former President’s initiative to bring back manufacturing.
33:14
Speaker 1
The Chips act is earmarked to hire 500,000 people over the next 10 years, direct and indirect. And Donald and our current President Trump’s Stargate is set to hire 100,000. So total 600,000 jobs. And here’s a small snapshot, Arizona, TSMC. So this was the Chips Act. Billions of dollars of funding, 30,000 hires, you know, as you can see, you know, hundreds of thousands of people looking to be hired. So it’s not just the people in the plants building the semiconductors. There’s going to be coffee shops and dry cleaners and restaurants and these are the indirect jobs that are hiring and you know, we have some clients that do this type of homework, right? They, they look to buy single family homes within 30 minute drives from intel factories. And man, you should see some of the gentrification of these cities.
34:15
Speaker 1
I mean, these cities look like slums. And now two, three years later, you wouldn’t be able to tell the difference between Austin and these, some of these areas. Next slide. Now, as a property investor, you want to do a little bit of homework and see where are people moving to. But are those states landlord friendly states? So these are the top 10 landlord friendly states. Typically you want no rent control, right? Which means that as a landlord you have the ability to raise rent however you want and fast eviction procedures. If you’re, if your tenant doesn’t pay, I want to be able to kick him out, find a new tenant, and favorable state court systems that allow you to do this. So These are the 10 top friendly states. You know, Ohio comes up as one of the top.
35:09
Speaker 1
You know, it has low cost of living, home prices are low, it’s gentrifies and it’s a big, you know, urban type of city. Arizona, lots of technology is moving there partly because it’s hot and you can generate electricity for your semiconductor plants and stuff like that. I personally like Georgia. Atlanta is a fantastic city to be an investor in. USA Football is based there. It’s known as the Hollywood of the SEC. Hollywood 2.0. A lot of stuff going, you know, in, in Atlanta’s favor. It’s also the most, the busiest airport in the world is Atlanta. So these are all some of the things, some of the homework you need to do to identify where to be buying. All right, now we’ll get into, you know, we. One, we are a lender, right?
35:59
Speaker 1
So we lend on our balance sheet in our name for our folks outside the US Looking to buy an investment property. And this is our core product and this is the most popular product that we offer also, which is if the rent that is appraised from the property that you want to buy, say you want to buy a $250,000 home, you know, we run the appraisal and then we also appraise that it should rent for $2,400. And if the, so it should rent for say 2,000, say $3,000, and if the mortgage and related mortgage expenses such as insurance and HOA and tax comes out to 2,400 or less than 3,000, you qualify. We don’t need to see any other, you know, of your personal financials, you qualify on the cash flow that the rental is going to give you.
37:00
Speaker 1
Now I’ve only highlighted one loan program. We have loan programs for expats. It’s just like you walked into your, you know, neighborhood bank that you grew up in. Our programs also for expats don’t require W2s. We have programs that you could use your income to qualify. It’s less popular because it’s just a little more homework because you’re using your income, you prove, you’re proving that your income that you earn can, can qualify to cover the mortgage payments. That just requires us to do a bit, do a deep dive into your foreign earned income. And we’re one of the few places that you can actually use your Singapore income. You can show me your Malaysia income, you can show me your Japanese income and we use that to qualify for the loan. Loan programs are very robust.
37:49
Speaker 1
We have on our balance sheet we have a few loan programs that can go as low as $100,000 in loan amount all the way up to 2 to 3 million and even higher for some of our, we also have a high net worth loan program for folks that want to qualify using their investment portfolio. So for example, if you have a fidelity portfolio and it’s you know, several million dollars, we can take that, use a formula and use that to qualify for the mortgage. And you know, a lot of people that you know are affluent or high net worth, they don’t want to show so much stuff because they’re busy making money. So that is something that we can dig into. But I wanted to show you the most popular loan program that we offer.
38:37
Speaker 1
Last but not least, I wanted to talk about something that’s become increasingly popular which is tapping your home equity for cash. And so we do this as a broker for us Real estate, London real estate, Australia real estate and our favorite Singapore real estate. You know, Singapore alone, We funded over 400 million in Singapore property alone. And basically what this is the next slide is, you know, you have an opportunity whether you know, you have a friend that wants to sell you their business, but he needs the money really quickly or you want to bring your, you want to bring the income back to your home country because your bank is not lending you to buy your raw materials. Maybe you want to buy new properties.
39:20
Speaker 1
We actually just had a client today, have three single family homes on the west coast, no debt, and he wants to buy a home in Singapore, but he lives in the US and so what he did is we did a cash out refi, pulled out 65% of the equity and he’s using that cash to buy property in Singapore, which of course we’re helping him with as well, you know, because right now there’s a lot of, you know, we had a client that pulled out cash from their US property to buy gold. Right. So this is a, this is a, a liquidity solution for the, for those that need cash for a short period of time when there’s an opportunity. So listen, that’s it from, you know, me. Here’s our contact details.
40:07
Speaker 1
But what I wanted to say, and I hope this is the message that you glean from this presentation. I, I purposely wanted to keep it short and sweet so I can engage the audience on questions that they have. One, all of this will pass. Two, we have to look at a real estate investment like any other investment. It’s not a primary residence. You’re not living in it. You don’t need to have a view or, you know, facing the sun when you wake up or facing east because it’s good feng shui if you’re Chinese. You, you want to buy a home that’s rentable where there’s high demand of renters and those renters are, are seeing a higher wage and those are the tenants you want. And so you have to do your research on where should I be buying?
40:54
Speaker 1
So I laid, I have a small snapshot of some of the things we look at. I’ve actually done a very long presentation on, and I go really deep into, you know, some of the tricks and ratios and screens to find these properties. But, and I’m happy to share that slide with you. Just message me and message your contact details in the chat and we’ll email that to you. So I hope that was useful. Don’t, don’t panic. It’s very, you know, the uncertainty, everybody’s feeling it. But if you have disposable income outside the US and you want to make an investment decision, US single family homes and property in the US is maybe the best thing you could do. The entry price is significantly lower than probably where you’re living.
41:47
Speaker 1
You know, I was just presenting, I can, I noticed one of our good friends on this chat, I was presenting to a group of investors in Malaysia and you know, were talking about Chicago property and a super nice Chicago property, you know, grass front lawn fence, two stories, bricks, looks like it’s out of, you know, a movie is Less than a condo downtown Malaysia, which, where you get no rental yield. So I think, you know, if you can get over the mental hurdle, like, wow, how do I invest over there? And you know, how do I look for properties? This is really exciting. We can help you with that. We can introduce you to realtors practically in any city you want. We can help you with the screening process. We have tons of research and data.
42:35
Speaker 1
And this is one thing I want to say. There is so much data available in the U.S. Like, if I wanted to buy a place in Singapore, I still struggle on, like Witch street and stuff like that. In the US There is data overflow. Anything you need, there is, whether that’s Zillow, Adam, Reddit, realtor.com, nAR reports, you name it’s there. And we can help you with some of this as well. So with that said, I’m gonna wrap it up and I’m going to open the webinar to some Q and A. So I’m going to start reading it now. All right. Oops. Okay, I’m having difficulties, difficulty finding where the Q A is. Oh, there it is.
43:32
Speaker 2
You can stop your screen share.
43:37
Speaker 1
All right. Okay, we’re in business. Is now a good time to invest in US Real estate? Well, if there was one thing I wanted this webinar to say is that in a perverse way, high rates is actually good. And let me explain why it sounds, you know, you know, irrational. But rates at, you know, 8% for 30 years is high. You know, it’s, but it’s high all over the world. But if you can earn 12% rental yield, you’re in the money. And what do you, what do I think is going to happen in three years? Well, 8% go to 5 and the 12% rental yield is going to go to 15. So your margin expansion and when interest rates go to five, you call me up and you say, I want to refinance my loan.
44:32
Speaker 1
And when you do that, in three years, your property would have been 20% higher. So when you pull out cash, you’ve actually recouped some of your initial down payment and that’s the US game. So, you know, high interest rates and you know, in my, I think slide two, the median income, the home price to median, the median home price to median income is almost seven times. Which means that coupled with mortgage rates where they are now, the average buyer in the US can buy, but he’s got to live somewhere, so he has to rent. And guess what? We’re, we’re tenants. Sorry. We’re landlords. You know, you can Google institutional buying of single family homes in the U.S. I’m not the only one that knows this. Blackstone knows this. These guys are smart.
45:24
Speaker 1
They’re, they have significantly more data than what I presented to you today. And they’re doing it. And I think, just like Warren Buffett, you know, these guys are smart. You should follow what they’re doing. Are there any signs that gentrification is slowing down in major cities? You know, I, you know, there’s always going to be gentrification. Like I said, it has a culture of gentrification. Now if I’m, you know, if I’m in tech, well, there’s only one place I can be. That’s, that’s Silicon Valley. So are people in Silicon Valley moving to, you know, to Dallas? Probably not. Right, but are those our clients? Right. Are the sweet spot that we see is a home price between, say, $250,000 to $500,000. You have good tenants, you know, a dual family income.
46:15
Speaker 1
So say a family income of 120 to $150,000 could support a 250 to $500,000 home in a good school district. And the quality of tenants is very high. So the US will always gentrify. And maybe in 10 years, it won’t be Texas, maybe it’ll be Portland, or maybe it will be Ohio. Well, I think Ohio is already happening, but maybe it’ll be another state. But right now it’s happening, it’s real, it’s here, and it ain’t stopping anytime soon. Should we prioritize states with no income tax when investing? Listen, it’s one of the things I look at, right? So, you know, you just have to put your, you have to put your mindset in. It’s like, you know, it’s like buying stocks. Like when interest rates go down. What are you buying? Well, you’re buying risky assets, risk assets.
47:09
Speaker 1
You know, when interest rates, you know, does it affect the banking sector? Then you buy some bank stocks. You have to put your mind into what your tenant is thinking. So they’re probably thinking, where should I move to rent? Well, I want to move to a place where I don’t have to pay, you know, there’s low taxes or no taxes. Well, I have, I had a slide on what those 10 states are. I want to move to a state where as good school districts, we have a report and you know, message me and I can send you this report where we identify the top public schools and private schools in California, Texas, Florida and New York. Why did I do that?
47:47
Speaker 1
Well, it’s because if that’s the mindset of somebody who’s looking to move to another state, where are the best schools for my kids to go? Right? That they could live the American dream of graduating, going to a good college. And then I look at home prices in those top schools, and guess what? Obviously those home prices are going up because people are moving into those areas. How does qualifying based on projected income work? Well, this is, you know, this is something that we revolutionized for when we brought to the market foreign nationals living overseas is that actually you can own a, you can get a mortgage in the US you don’t need US Credit. Which is the biggest myth out there in the world, besides Santa Claus is still real, is that you need U. S.
48:41
Speaker 1
Credit to own a home, which you don’t, or to get a mortgage, which you don’t. You never did. And, but now we’ve made it even more simple by saying, listen, we don’t even need to see your personal income or your pay stubs. We don’t need to speak to your human resources manager to give us 12 months of pay stubs. We just say, hey, listen, if this place you’re going to buy is renting for 3,000 bucks and the mortgage that you get through us is 2000 bucks, I don’t really need to see anything because the rent’s going to cover the mortgage. So that’s really exciting. And if you want more details, message us. And I can get, go into that with significantly more detail. How fast can a bridging loan be approved and funded? Good, Good question. So generally in most countries, it’s pretty fast.
49:35
Speaker 1
It’s anywhere between one to four weeks. You know, different lenders can operate at different speeds. But generally speaking, you know, it’s also, do you have an existing mortgage or do you want to do a second lien? Whatever it is, you know, this is a really exciting product that we’ve brought to the market. And it’s in super high demand right now because banks all over the world, they’re not lending right. You know, they’re, you know, they’re, you know, they’re putting their money elsewhere as opposed to lending, you know, so lending to lending for property investors isn’t on their priority list right now. But for us, this is all we do foreign nationals. We lend for people living in Canada, Latin America, you know, all of Asia.
50:17
Speaker 1
And a lot of that has to do with they want to send their kids to some of the best schools in the world. What are some of the more unexpected ways clients are using bridging loans? Well, generally it’s, you know it’s usually they need money quickly so whatever that means they need to make an investment. Sometimes it’s you know, unfortunately sometimes there’s, it’s health care related. You know my, you know my mother has got sick and I’m not covered by, you know there’s certain things that need. I need x amount of money quickly to pay for certain health bills. But there’s a whole range of of reasons you use a bridging load.
50:55
Speaker 1
Actually before I continue to ask questions I wanted to say in the chat in the, in the chat box it would be, you’d be doing me a huge favor if you could start following us. On our various Instagram account. My co founder Robert posts things on Tick Tock. These are quick snippets on real estate tips and tricks and anything U S related. It’s on Tick Tock. We’ve got a very robust YouTube channel where we introduce where we interview specialists in real estate or we you know sometimes it’s just Robert and I talking about opportunities in the US but take a look there’s tons of stuff there. I personally I have a Instagram channel called the Global Mortgage Guy where we talk about you know bridging low strategies and you know, tips and tricks as well. So please follow us where you can.
51:51
Speaker 1
Also we have two newsletters that goes out. America Mortgages is a US Specific newsletter. Global Mortgage Group talks about the markets and different investment opportunities and ways to look at it tends to look at the world and then tries to move tries to see what’s happening in the world and with the outcome of how it affects real estate prices where you live. So please follow us on that and all the details are on the chat. How do migration trends affect real estate investment opportunities? Well, I think you know, I hope part of this presentation explained that is that you know you want to buy where you expect you know, people to move to.
52:35
Speaker 1
You know when I was living in Hong Kong, when I first moved to Hong Kong in 1995, you know Wan Sha you would have never thought to buy property there or Shang. But as central only has so much space and mid levels that slowly it gentrifies into these areas and you See that in big cities, you know, Brooklyn 20, 30 years ago was not considered someplace where you want to live. And now it’s super gentrified. So you could feel it in a city by city basis. But in that, so that’s just a microcosm of an entire country. So you know, people move from California, they’ll move to Arizona to, or Vegas because it’s kind of nearby. Nevada has seen huge gentrification. So, you know, you have to do a little bit of homework. Call us, we can help you through the thought process.
53:32
Speaker 1
But yeah, it’s a great opportunity to kind of start looking at your investment opportunities because I can guarantee you, especially what’s happening right now, the Fed, I think, is going to be forced to cut rates. You know, they’ve got a lot of things they have to manage. They’ve got to lower the, you know, the debt burden on the rollover. So hopefully they roll it over at a lower rate and this is all. And once that happens, I mean, we’re off to the races again. So start doing your homework now. Call us, call me, call your American Mortgages representative. We can walk you through the process. We can introduce you to a realtor, we can crunch the numbers for you. Whatever you need, we’re here to help. Aside from income coverage, what loan to values can foreigners get on a mortgage for a rental investment?
54:23
Speaker 1
So I think I forgot to, I may have overlooked this key, key point. As a foreigner that’s a non US citizen, you can borrow through us up to 75% of the home value. Now think about that. You see a million dollar home, we’ll lend you $750,000 without any US credit, without any Social Security number. We’ll look at the rental income or we have programs that look at will. Look at your local income and we don’t care what you’ve done in Singapore or Frankfurt. You’ve got 100 homes. We’re not going to ask for that. We just want to see what you make in that country. But our most popular loan is based on the rental income. And can you imagine that 75% leverage as a foreign national? If you’re a US expat, that’s even higher for obvious reasons.
55:22
Speaker 1
All right, how are the questions coming along? Matthew, you have any questions for me? Oh, one just came in. What do you think? How many times. Wait, hold on. How many times do you expect the Fed to cut rates this year? Well, I’m, you know, it’s anybody’s guess, but you Know however, how economists look at it and how market participants look at it is they look at the Fed fund futures and it’s pricing in four rate cuts this year. So think about that. It’s, it’s almost May, right? So you have, you know, seven months and four rate cuts. If property prices can go up 10% in a world where rates went up from 0.25 to 4 fed funds rate, what do you think home prices are going to do when they go from four and a half to three and a half?
56:27
Speaker 1
I mean it doesn’t take to be, it’s not a rocket science. You don’t have to be a rocket scientist to figure out that’s going to be really good for home prices. Partly because people are waiting for this, are going to buy because they know they people in the US with disposable income know what I’m telling you. It’s a rent, it’s a tenant market. So they want to accumulate single family homes that they can rent out to earn rental yield while the property prices are going up. Do, does Global Mortgage Group lend to international investors financing property in the Middle East? Our parent company, Global Mortgage Group is an international real estate financing broker. We have a team in Dubai that facilitates international investors looking to buy property.
57:19
Speaker 1
We have a team that can select, you know, amazing condos, you know, in Dubai as well as offer financing. Are there restrictions to apply for a mortgage? None. I mean, I mean there are sanctioned countries but generally speaking the US is the land of the free. There’s no stamp duty. Foreigners can buy, you know, in fact, let me give you a statistic. Over the past 10 years, foreigners have bought over $1 trillion worth of US residential real estate. A lot of that comes from India, China, Latin America, London, Canada and Southeast Asia. The, and you know, last year was 50 billion, right. So this, you know, it’s always a destination foreigners to buy property there. A lot of that has to do with education.
58:25
Speaker 1
But you know, the lack of information which we’re hoping to improve on by having these webinars, education, educating the populace on these opportunities because it’s not, you know, you have to kind of be in the know to kind of look for this information. Sorry, might have missed this answer. How do you think interest rates will change going forward? You know, so the Fed funds rates and the 10 year treasury rate, they tend to move together but not necessarily, they’re based on a few different things. But it’s pretty commonly accepted that Fed Funds Rates are going to be cut this year and the market is predicting four times. So just to put things in perspective, it’s now almost May. So you’ve got SE, you’ve got 8 months. Did I do my math right? 8 months, 4 rate cuts.
59:27
Speaker 1
So like I said in slide 2 of the presentation is that in 2022, rates went from 0.25 to 4 and went up a little more after that. But in that period, property prices went up 10%, not down. So imagine what will happen to prices, property prices, when rates go down. Like rationally you would think home prices might go up more than 10%. Right? So we’re all really excited for that. We have our loan officers around the world are working day and night because investors around the world sees this. They’ve, they’ve taken out the emotional aspect to this. They’re like, listen, you know these tariffs and you know, all this noise in the media, it’s not good. But if I look at things objectively, what’s changed? Nothing’s changed. There’s lack of supply of homes. People are gentrifying to states where there’s employment opportunities.
01:00:30
Speaker 1
Chips act and Stargate are hiring because they’re building AI databases and data centers and things like that. And now you’re probably moving more manufacturing is because they want to start making more stuff in the US and two, the thing that has changed has actually helped the thesis of investing in U. S real estate is because tariffs are going to make input costs more expensive. And are, what are home builders going to do? Are they going to build and try to pass it on? No, I think they’re not going to build. I think they’re going to pause because you don’t want to, if you’re a company, you don’t want to increase capex in an uncertain environment. And so what that makes is the supply landscape is actually static, but the demand landscape is increasing. So think about that. So it’s a, it’s.
01:01:28
Speaker 1
And with, with mortgage rates so high, it’s squeezing out the average, the marginal buyer for their primary home. But for people like you and I and everybody on this call and Blackstone, they know it’s a good time to buy because rates are only going to come down. So if you can, if you can, you know, buy a single family home or a condo and you’re maybe making $200 a month, not that great, but it’s positive, right? 200 times 12, maybe the home price is you know, $200,000 and you’ve made $1200. Well actually that’s not, that’s pretty good yield. But what’s going to happen in three years? Well one, your average rent will increase 5% at least a year. So that 1200 a year could be 1500 a year. Right. And then your home price will increase 5% a year as well.
01:02:25
Speaker 1
And more importantly, mortgage rates are going to be cut. So you have a margin expansion story. As a property investor that really is the US real estate investing game. How does pre approval for a US mortgage work? Do you need an offer on a property to qualify for the mortgage or can one qualify ahead of finding the property? Really good question.
01:02:52
Speaker 1
So in the US you need a pre approval letter to buy a home because as a seller, just one more thing, just in terms of the current environment, another aspect to buying property right now which works in your favor is that if somebody is actually selling their property now and they’re not doing a 1031 exchange, which means they can buy another property at a higher price, that means they’re going to eat the capital gains tax, which means that they’re probably a motivated seller and you as a buyer have negotiating power. Right. So that’s really important. Somebody that’s selling now probably needs the money. Right. So I digress a little bit. So we are able to issue a pre approval letter within 24 hours.
01:03:39
Speaker 1
You use that pre approval letter as proof of financing when you go to to go house shopping in the US So the sequence of events are one, we give you some advice on, you know how to begin the process. Many of our clients like to set up a LLC and apply for a bank account. Because LLC holding rental properties is very tax efficient. But it’s 50, you can hold it in your own name. Then you come to us, we walk through the loan options, you ask us where we think is the best place to buy, we give you some recommendations and then we connect you to a realtor in that city. So we’ve just launched this portal, this in house portal that connects our buyers to realtors in the cities where you’re looking to buy. It’s, it’s fantastic. We just launched it.
01:04:36
Speaker 1
If you want more details on how this works and how we could, you could use it to help you with your US real estate purchase. You know, let us know, email us the contact details. I’ll just give you the contact details you should have in the email invites that went out. But yeah, so we can issue a pre approval. Once you find a home and that you like, you go into contract, which means you’ve paid earnest money or known as deposit, and you’re good to go. You call, you call our team and say, hey, I saw you on the webinar. You issued me a pre approval, I’m ready to go.
01:05:12
Speaker 1
Once that happens, we get a few, we update a few of your personal information, you submit it to our underwriting team, and then we give you a formal approval with a set of conditions to fulfill. And a lot of those we do for you. We have a portal which is super cool, it’s super encrypted, it’s state of the art. It allows you to upload all your relevant personal information on this portal to. And it connects to our loan officers. And we have a team in the Philippines that actually does a lot of this for you. We order title, we’ll help you ordering insurance. We have a foreign exchange partner that helps you getting the best rates to wire money to make the down payment.
01:05:58
Speaker 1
So all of this stuff we do for you, but you know, it’s another way of saying that we’re one stop shop. We’re here to kind of, we’re here on this evangelical crusade to teach the world that US real estate investing is not only achievable and attainable, it’s really the best investment decision you can make at the moment. Oh, I see different places to ask questions. All right. Oh, here we go. With the talks of Fed cuts later this year, should we wait or lock in financing now? You know, if you. Okay, so there are two variables, right? There’s rate and there’s price. Right Now I can tell you that, oh, there’s fireworks. I can tell you that if you put in a spreadsheet what your costs are.
01:07:04
Speaker 1
If you, if you’re looking at a property now and it’s 200,000 bucks and you’re waiting for rates to cut, I can guarantee you as soon as rates are cut, 50 bips, that’ll be $250,000 literally overnight. Right? So it’s better to lock in now because your cash flow calculation is significantly more sensitive to the capital value than the rate. So you can do the math. We can help you with this. But lock in the rate now because you won’t be able to buy the homes at this price because of the lack of supply. Right. There’s abundant supply. You can wait and, you know, you can kind of pick the houses you want. But in A bull market. Once rates are cut, these things are going to shoot up really quick. Do you work, Whoa, questions are coming in hot and heavy.
01:08:03
Speaker 1
Do you work with self employed clients who do not have traditional salary documentation? Documentation 100. Right. And this is the trend now. The world is moving farther away from traditional income. Traditional income is what a bank wants to lend you. They want to see 12, they want to see you working at a job for 5 years and stable income and pay slips. But people have different income sources. You know, they’re, they’re trading, they’re digital nomads, they’re doing different things on TikTok or Amazon. But this is what we excel in. Right? We understand that this is a large portion of our investor base are people who are self employed. And so this is where the rental coverage program that I talked about earlier comes into play. We don’t really need to know about your personal income or employment situation.
01:08:53
Speaker 1
If the rent that we appraise, the home comes in and if it’s more than the mortgage, you qualify. And in the rare situation that it doesn’t, we just lower the loan to value. So you do qualify. It’s a super easy to qualify mortgage program. And we are pioneers of this for offering it to foreign nationals and people outside the U.S. In fact, we are the only U.S. Direct lender with offices outside the U.S. Our theory was, why don’t we put financing close to the borrower like in other countries? Financing is close to the asset, we make that close to the borrower. So you get to speak to somebody in your time zone. We try hard to get somebody in your language and we’re slowly adding people all over the world.
01:09:44
Speaker 1
So we have loan officer teams in pretty much every time zone, in every continent for sure that speak your language. And we’re, and we answer questions 24 hours a day, seven days a week. We’re like the 711 of US mortgage lenders. What should someone do today if they want to take advantage of these trends but don’t know where to start? Well, I would suggest, I’m more than happy to kind of walk you through this, give you some of the screens. At the end of the day, there’s got to be a leap of faith. You got to make that, you know, it’s like, you know, you haven’t gone to the gym in 10 years. You still gotta just gotta make that leap of faith.
01:10:23
Speaker 1
Now we will give you as much information as we have, walk you through the process, introduce you to Our, you know, our accountant, our U.S. Tax accountant partners, you know people set up LLCs. If you want one, talk through the mortgage, introduce you to the realtor, walk you run the numbers for you, calculate cap rates, net operating income, whatever it is, we can help you with that. But you need to take the first move. Contact us, get the ball rolling. We will share our experience, expertise and knowledge with you because we want you to be successful. We want you to make money on real estate investing because we think it really is the best opportunity at the moment. Wow. Managed to answer all the questions. All right, well this was super exciting. I’m going to wrap it up here.
01:11:19
Speaker 1
Listen, you know my email is donaldmg Asia pretty easy to remember. Please email me, I have tons of slides. Our, our research team has pretty much anything you can think of. We’ve probably done some research on it. We’ll walk you through the process. I’ll introduce you to one of a loan officer in your time zone that could speak your language to get the ball rolling, to show you what loan options there are. But you have to make the first move. But we’re here to help you, guide you, teach you, educate you and create a more successful US real estate investor in you. So I’ve said enough. It is 6pm I’m actually speaking at another event in 30 minutes. So thank you for joining. I appreciate everybody’s time. If you have any questions, please feel free to contact me directly.
01:12:14
Speaker 1
Good luck, happy hunting and all the best for the rest of this year. Bye.
Disclaimer: This transcript is AI-generated, so kindly pardon any transcription or grammatical errors that may be present.
