Invest in U.S Property

How do I invest in U.S property without traveling there?

The house-buying experience is often synonymous with physically travelling to the location and exploring every aspect of the house in person. The very idea of investing in property that you’ve never seen physically is unusual – for some people. The “old” way of investing in Real Estate is becoming synonymous with the “old” way of buying socks in a store and not online. With the right partners in place – Mortgage Broker, Realtor, Property Manager, buying a property outside of the city, state, or country where you live is not only possible, it is almost as common as buying “socks” online these days.

Let’s first dispel the notion that the best property to invest in are those that are in the same country code as you. Location absolutely matters, but not in the traditional sense. Global real estate investors in the ‘know’ will tell you the most important factors are asset location and yield – their own proximity to their investment shouldn’t be a factor. Another thing they’ll probably tell you would be that the U.S is by far the best place to invest right now.

Why the U.S?

For one, it’s extremely easy – anyone can buy and own property in the U.S, regardless of citizenship. There are no restrictions (or stamp duties/extra costs) that prevent an individual of foreign citizenship from owning or buying a home in the U.S.

For another, the International Investor Survey done by AFIRE (Association of Foreign Investors in Real Estate) found that the U.S. continues to lead the world in terms of offering the best opportunity for capital appreciation. The same survey also found that 58% of respondents felt that the U.S is the most stable for real estate investment. Moreover, mortgage rates are expected to stay low for some time, resulting in the ability to secure cheap loans and fuelling demand for property within the U.S.

Can I do it?

The answer to this question would be quite different if it was 20 years ago when the ability to build a portfolio in markets beyond where you live was something you could do only if you were extremely wealthy. However, what seemed impossible is easily achieved these days, thanks to the Internet making the world a much, much smaller place. The key to success here is trust in the right partners.

It is essential that you find people you can trust throughout the process – look for licensed realtors and property managers with local expertise in the markets you find the most appealing. Whenever possible, ask associates for referrals, do website searches, find locals in real estate directories and check references. If you do decide to opt for financing, it’s all the more important you find experts who understand the situation and have experience with these transactions.

American Mortgages has proven results-driven solutions for U.S Expats and Foreign Nationals. We understand the requirements of our international borrowers and provide tailor-made mortgage solutions to purchase, refinance or release equity regardless if you have U.S. credit or prior investment experience. Speak to us today to understand how you can obtain a mortgage for U.S property without leaving the comfort of your home. Visit us at www.americamortgages.com to find out more.

Bridge Loan - America Mortgages

What is a Bridge Loan?

A bridge loan is a type of asset-based, short-term loan, typically taken out for a period of a few months to a couple of years pending the arrangement of longer-term financing or an exit such as the sale. It is usually called an asset-based bridge loan in the U.S, a bridging loan in the United Kingdom, or a “caveat loan,” or a swing loan.

What are the benefits of a bridge loan?

Let’s say you’re selling your house and need money to buy another house, but you’re short. In this case, a bridge loan can take care of the financing issue that emerges before your current home sells. Bridge loans fill the gap where traditional lenders cannot provide the speed of funding and flexibility of terms required by the borrower. It is used when financing is fundamental, and a favorable rate is not accessible – think of them as a form of secured debt upheld by collateral.

In addition, bridge loans fund faster than bank loans. Good opportunities don’t last long, which is why using a loan with fewer requirements that closes quickly is an excellent choice. It allows investors to grab a fleeting opportunity before someone else snatches it up.

How can you use a bridge loan?

1. Purchase transactions

In residential real estate, bridge loans are used to rapidly close on a deal before a long-term loan or mortgage with a lower financing cost is acquired. When a homebuyer wants to buy a new property before selling their previous home, a bridge loan can be used to pay off the old mortgage and purchase the new home.

2. Liquidity

Let’s imagine a scenario. Like many of our clients today, Covid has impacted your business and you need capital now. You’ve applied for a loan with your bank, but the lender tells you that it could be weeks before you get your funds or you may not qualify based on current cash flow. You don’t want to play the waiting game. Anything can happen in the time it takes for a “standard” mortgage to be approved and disbursed.

On the other hand, if you own real estate you could use a bridge loan and receive funding with a much shorter turnaround — even as quickly as a week depending on the complexity, location, LTV, and structure.

3. Flexibility

Bridge loans can give you the flexibility you need to buy your dream home in a competitive market. At America Mortgages, we provide U.S. short-term “bridging” loans for overseas borrowers and are certain to find you the right mortgage.

Often America Mortgages Bridge financing is a cheaper alternative to the standard hard money or private lending options, while just as flexible underwriting and fast with the turn around to fund.

America Mortgages provides bridge loan financing for companies, developers, and individuals on a global scale. These interim financing services have been designed to assist real estate investors with financial solutions that offer quick relief in challenging times when liquidity or cash flow is an issue. America Mortgages Bridge has normal terms of 12-36 months with interest-only payments.

4. Delayed purchase exit

Using a bridge for purchase is almost “same-as-cash” and could get your offer accepted when other offers may be tied to “traditional” financing. The big question, how do you exit out of a higher interest bridge loan? The answer is simple; Delayed Purchase.

In a delayed purchase transaction, you can take out a “traditional” mortgage on the property immediately. This allows you to have the advantage of being a “cash buyer” and gives sellers the chance to know the transaction will close while giving you the time and flexibility to obtain a long-term permanent mortgage. Depending on the loan program, this normally needs to be done within three months of closing.

Bridge loan Case Studies

Here are two case studies of America Mortgages Bridge financing solutions:

Canadian investment fund purchases hotel in Texas. Read More.

Chinese National closes US$5.6m purchase with GMG Bridge Loan. Read More.

Get in touch with us today to learn more about the structures and options of short-term bridge financing solutions www.americamortgages.com

Clients are from Canada

While America Mortgages has clients from most countries globally, Canada by far is where most of our clients come from.

This is consistent with public information released by the National Association of Realtors; in year-ended March 2020, Canadian’s purchased $9.5B of U.S. residential real estate!

If we assume an average home price of $500,000, that equates to a staggering 19,000 home purchases!

As the top U.S. mortgage specialist specifically focused only on Expats and Foreign Nationals living in Canada, the customer data we have would be considered as the best representation of “real” demand.

In this article, we wanted to dig a little deeper into where they are buying and why.

Here is our data over the past 12 months for Canadian buyers:

  • – Loans funded: 137
  • – Average loan amount: $460,000
  • – Client location: Ontario 52%, Vancouver 33%, Edmonton 5%, Montreal 3%, Others 7%
  • – Top 3 purchase locations: Orlando, FL; Atlanta, GA; Charlotte, NC

Orlando, Florida

Orlando is a natural fit for Canadians, especially those living in Ontario. They share the same time zone, and it’s only a 3-hour flight from Toronto to Orlando. It’s no secret that winters in Canada (and especially Toronto) can be long and harsh, which is why many choose to buy second homes in Florida to escape the cold. Of course, Orlando’s reputation for being an affordable location with social and economic benefits also helps with its popularity. The average home price in Orlando is $293,000 vs C$870,000 for an average home in Toronto. With tourism and job market growth in leisure and hospitality at their highs, it’s no wonder Forbes ranked Orlando as their #1 Best Place to Buy a House 3 years in a row.

Atlanta, Georgia

Atlanta ticks many boxes and is an underappreciated place for many but offers great value for those looking to take advantage of the recent demographic shift inwards for coastal cities. A little unknown fact is that the Atlanta International Airport is the busiest airport in the world, with over 110 million passengers a year! Beijing #2 at 100 million passengers (2019). Let that sink in a little. A city of 500,000 people has the world’s busiest airport. That is because geographically, it’s perfectly located as a travel hub and hence a growing trend for companies to expand their headquarters there – like Google and Blackrock. Meanwhile, the population growing by 12.18% in the last 8 years – 111% faster than the national average of 5.76%. That also means the area’s annual job growth has risen to the rate of 2.15%. Affordability is a key driver for many real estate investors looking for a strong rental yield. The median purchase price of a 3 bedroom single family home at only $190,000, 15% lower than the national average of $222,000.

Charlotte, North Carolina

Charlotte is not an obvious choice to own property in, but digging a little deeper, we found that it has been one of the best cities to own real estate over the past 10 years. The supply of homes is at a 17 year low, 8 years of home price increases with no signs of slowing down. Another fact that surprises many is that Charlotte has the second-most banking assets after New York City, with Bank of America and Wells Fargo having their regional headquarters there. Meanwhile, CNBC recognizes Charlotte as the third-best city in the country to start a business.

It was also surprising to find out from our clients in Canada that Toronto was only a 2-hour direct flight from Charlotte!

How America Mortgages can help…

Unlike a traditional bank, which can only show you their own bank programs, which are by definition rigid and hard to qualify for, we are a solutions provider. We understand your requirements and suggest several loan options that best suit your requirements; this could be from banks or wholesale lenders, which are unknown by many accounts for 70% of the mortgage lending market. For example, if you are an entrepreneur, you can almost assume you would not be able to qualify for a bank loan. The trouble is banks will drag this on for 3-4 months before rejecting your loan. Our Loan Officers are all experts working with Foreign National and Overseas Expat clients – that is all we do! When you tell us your requirements, we already know from our database of 150 U.S. lender programs that best suits your needs. (Also see Can a Canadian Buy a House in the USA?)

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

Cash-Out Equity Release - America Mortgages

There’s something about having cash on hand that feels empowering. Being able to invest in projects, equities, crypto, or a business opens up endless possibilities. It could be to pay off high-interest debt or taking the family on a dream vacation before the children get too old. We hear this daily when speaking to clients that are considering cash-out refinancing.

What is a cash-out refinance?

A cash-out refinance is a mortgage refinancing option in which an old mortgage is replaced for a new one with a larger amount than owed on the previously existing loan, helping borrowers use their home mortgage to get some additional liquidity. You get the difference between the old mortgage and the new and the money can be used however you like. The amount received depends on the equity built up in your property.

How does it work?

Cash-out refinancing depends on several factors which include the value of the property, the amount owed, and how much you can qualify to borrow. Your America Mortgages loan officer can help you determine if this type of financing makes sense from a cost basis.

The potential benefits of a cash-out refinance

  • 1. A lower interest rate on your mortgage – Let’s say you bought your home when mortgage rates were much higher. Refinancing your home can improve your financial situation if you are able to obtain a lower rate.
  • 2. Debt consolidation – The money from a cash-out refinance can be used to pay off other high-interest debts, like credit cards and college loans. This could save you thousands in interest in the long run.
  • 3. Credit score improvement – Building on the previous point, paying your credit card debts off in full using a cash-out refinance can build your credit score by reducing your credit utilization ratio.
  • 4. Tax deductions – If you’re looking to improve your home using the cash from a cash-out refinance, you could potentially qualify for mortgage interest deduction.
  • 5. A cheaper way of paying for your kid’s education – It’s every parent’s dream to be able to put their kids through college, but high-interest student loans can be extremely stressful. Using a cash-out refinance can be a good alternative if the rates are lower.
  • 6. Inheritance – Although we advise you to speak with your attorney or tax advisor, it may be possible to reduce the amount of inheritance tax when estate planning with increased leverage.
  • 7. Take advantage of an opportunity – With the current situation with Covid, there are a lot of opportunities that may not be available once the world goes back to “normal”. Having access to liquidity and being able to act immediately can be potentially life-changing.

So, should you do it?

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

Interested in cash-out refinancing? America Mortgages has a 97% approval rate for both U.S. Citizens & Foreign Nationals. That is our sole focus and our expertise.

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

Vacation Homes Buoyant

Despite the slow reopening of workplaces nationwide, a new report by Redfin shows that demand for vacation homes– otherwise known as short-term rentals –is soaring at a record pace.

One reason for the rise in demand can be attributed to vacationers wanting to keep their distance from strangers in shared hotel spaces. Now, with the developing accessibility of the COVID-19 vaccines, more people are planning their future get-aways. A recent Vacasa review of U.S. vacationers revealed that 59% said they intend to vacation in spring 2021. Additionally, 52% said they would choose to stay in a vacation rental more regularly. A study by the National Association of Realtors also found a 16% increment in second-home purchases in 2020.

Rise in remote work

Another reason for the increased demand could also be due to more affluent families having more opportunities to do their jobs remotely for the foreseeable future. The increase in remote work for individuals in white-collar positions implies that families could leave urban cities and set up for business in more modest, remote towns.

Redfin chief economist Daryl Fairweather said, “The combination of the wealthy becoming wealthier, remote work turning into the new normal, and low mortgage rates is creating an ideal environment for affluent Americans to buy vacation homes,”

“As long as the economy continues to grow, I don’t foresee demand for second homes slowing down anytime soon,” she added.

Fortunes may have genuinely turned for the vacation home market since the start of the coronavirus crisis. But as a real estate investor, what does this mean for you?

From having a stable cash flow to obtaining tax benefits, investing in real estate can have several advantages. It’s also an excellent way to increase wealth over time. New investors can take advantage of this by getting in on this heightened interest for second homes being bought as vacation rentals.

America Mortgages has programs for both Foreign Nationals and U.S. Expats. Our U.S. Expats programs are exactly what you would find at your bank back home. We work with lenders in all 50 states, and we are sure to find the best loan option available for your needs. We also provide solutions for U.S. Citizens who have been “away from home” for an extended period and lack the depth of credit. No U.S. credit? No problem! America Mortgages has loan programs that accept your overseas credit and income. As Expats ourselves, we not only understand the challenges you face living abroad while trying to obtain U.S. mortgage financing, we live it.

Schedule a call with our U.S. mortgage specialist today at www.americamortgages.com

Sources: Redfin & Marketwatch

Home Sales Are Newly Built

New construction homes have steadily taken a larger share of the pie over the past decade, but during the coronavirus pandemic, there has been a remarkable acceleration. According to Redfin Lead Economist Taylor Marr, there are two main reasons for this: a rise in home construction and fewer Americans listing their houses for sale.

“Homebuilding has become more attractive and profitable during the pandemic because of record-low mortgage rates and strong demand for homes,” Marr claims. “At the same time, many homeowners have chosen to stay and refinance or remodel their existing homes rather than sell them, which has led to new construction taking a larger share of the market.”

In the US, new residential construction projects have increased by 20% each month since the pandemic and reached the highest level since 2006, in March this year. This goes to show that homebuilders are becoming more optimistic and hopeful about the current housing situation, notwithstanding the shortage in lumber and rising costs of construction.

According to Melanie Miller, a Redfin real estate agent in Houston, buyers choosing not to deal with bidding wars prefer new construction homes because builders rarely impose deadlines for offers. Furthermore, they can purchase a house at the asking price instead of bidding at a higher price.

With record-low mortgage rates and strong demand for homes, we think this is an excellent time to invest in real estate. With an investment mortgage, you will usually be able to tell whether you are approved relatively quickly. America Mortgages has pretty cut and dry standards when it comes to getting you approved for an investment mortgage. America Mortgages has loan programs for U.S. Expats with or without U.S. credit. We understand that living abroad often changes factors and your ability to borrow in the U.S. Our loan programs are tailored towards your exact situation.

What are you waiting for?

For more information on U.S. or mortgage loans in other countries, please enquire via email – [email protected].

Source: Redfin

America mortgages

Portfolio Loans

Real estate investors looking to scale quickly and expand their residential investment portfolio often run into the same problem fairly quickly – too many financed homes. Most conventional lenders in the U.S. will allow borrowers up to 5 or 10 financed properties either with that lender or financed in general. After that, the available financing is limited or non-existent conventionally. This limits the investors’ ability to scale and grow their real estate portfolio without having more equity. Usually, releasing more equity is either not available or too expensive to make the numbers work. This is exactly where portfolio loans come into play.

What are the basics of portfolio loans?

Portfolio loans cross-collateralize several different properties and can be used to either purchase, refinance, or release equity from a portfolio of stabilized investment properties. Most portfolio lenders have a minimum of 5 properties and a USD $500,000 loan minimum – there is no maximum number of properties or loan amount. This, in turn, helps the investor avoid the 5 to 10 financed properties limitation that conventional lenders have and will instead consolidate them into one loan.

Here are 5 reasons how a portfolio loan is able to help an investor solve the issue of having too many financed homes, and grant them the ability to scale on their own terms and pace.

Top 5 Benefits of a Portfolio Loan:

  • – No capital or property financing restrictions
  • – Portfolio specific underwriting – no personal income underwriting
  • – Non-recourse and interest-only options available
  • – Flexibility and competitive structures with higher leverage and longer amortizations
  • – Ease of managing one loan versus many individual loans

With the underwriting criteria in the investment property market continuing to tighten among traditional lenders, the portfolio option provides a streamlined underwriting approach that focuses mainly on the cash flow of the specific properties.

Portfolio Loan Interest Rates

More often than not, the loans are offered non-recourse, allowing the investor to keep a separation between personal and business assets, with no requirements to document the borrowers’ personal income. For investors focused on monthly cash flow, interest-only options are available.

With the recent news of Fannie Mae‘s reduction in interest in the investment real estate market and the resulting interest rate increase on investment property loans, the portfolio loan terms are usually more competitive from a leverage and pricing standpoint as a conventional investment property loan, with much more streamlined underwriting and less documentation required.

We believe portfolio loans will continue to be a top financing option for clients looking for increased leverage, competitive pricing, and flexibility when looking at options for their real estate portfolio. Our team is available to review the specific scenario and terms best suited for you. Find out all about your mortgage options when you schedule a 15-minute call with our U.S. Mortgage Specialist here: [email protected].

International Mortgage Specialists

The number of luxury home sales rose 41.6% in the first quarter of 2021. According to Redfin, “luxury” homes sell for an average of $975,000, while “expensive” homes sell for an average of $429,000. Low interest rates and record-low home prices are helping many Americans buy high-end houses. This strategy is also helping millennials avoid expensive cities like San Francisco and New York.

Despite high-end properties that are over the asking price are getting multiple offers, according to Redfin agent Katy Polvorosa.

As we see it, it seems like the right time to invest in U.S. real estate in Texas, Florida, and Colorado. Aside from the higher rental yields, these states can provide improved cash flow to investors.

“This is consistent with what we see in America Mortgages, especially with foreign nationals looking to buy investment properties, mainly in Texas and Florida.”

Robert Chadwick

Texas Real Estate

Due to its diverse economy, Dallas real estate is very attractive for people of all income levels. Its low homeownership rate makes it the perfect place to invest. As interest rates rise, renting is becoming more affordable than buying. The demand for rental units has increased over 14% within the last year, making it perfect for investing in Dallas real estate.

Austin, Texas, is also another excellent place to invest in real estate. In the last 5 years, it has come to be known as another tech hub making its housing market very sizable. Its home values have more than doubled since 2010.

There are tons of high-paying tech jobs in Austin. As Austin is getting older, Millennials will become the largest buyers and renters in 2021, and this trend will continue. We believe investing in Austin real estate is a great market, as there is a huge scarcity of homes for sale in Austin, and more Millenials don’t see a value in owning.

Why should you invest in Texas properties?

The Texas real estate market has plenty of investment properties for sale. The real estate market in Dallas, Austin, and Houston is very active, and volumes of trade are high, and housing stock moves fast. This means it is relatively easy to exit investments and find a buyer for your home.

Florida Real Estate

In 2021, Florida is one of the best places to invest in real estate. This metropolitan area is also one of the most visited tourist attractions in the U.S. There are plenty of opportunities in this real estate market. Investors have a choice of targeting the long-term residential or holiday markets with their properties. Both offer strong returns.

Why invest in Florida Real Estate?

Florida’s real estate market is known to some as the hottest real estate market in the U.S. The housing market in Orlando, Tampa Bay, Lakeland, and Ocala is still growing steadily, with prices remaining low. Properties have a good chance of appreciation in the next couple of years. There is a huge demand for single-family homes in Florida, and with a strong renters market, we think this is a great place to invest in real estate and reap its yields and benefits.

Colorado Real Estate

Colorado Springs is a great place to invest in real estate in 2021. Its robust real estate market has continued to grow at a fast pace.

Colorado Springs’s real estate market is relatively affordable, with a median home price of around $320,000 and a monthly rent of approximately $1,600. Its proximity to Denver will make it more attractive to people looking to buy a home there. It is also important to note that the average home price in Denver in 2018 was $500,000. In short, you can buy two homes in Colorado Springs for the price of one in Denver.

Compared to other states, Colorado Springs has proven to be one of the best places to invest in rental real estate. What better time to do this than now when mortgage rates remain low?

At America Mortgages, we have eliminated many unnecessary steps to create a simple and easy process for our clients. We focus only on U.S. Expats and Foreign Nationals living overseas, and we offer over 150 U.S. bank and lender programs direct to our international clients. Our team of U.S. mortgage specialists are ready to help you! Schedule a call with us today!

For more information, please contact [email protected].

Sources: HousingWire & Redfin

Investment Property

Rental prices are bouncing back! We see the biggest single-month increase in rent prices since the beginning of the global pandemic. Apartment rental app Zumper reports that the price of a one-bedroom unit increased by 1.1%, and the average rent for a two-bedroom apartment in February rose 0.9%.

Through last year, Covid-19 disrupted the rental scene drastically. One-bedroom units in New York and Maine saw significant drops in rent prices. Even states like Massachusetts, Connecticut, Maryland, and Virginia also saw median rent prices go down during the pandemic’s peak.

There’s still good news for U.S. real estate investors as in just 2 months into 2021, low rental rates have finally reached the bottom. In some cases, like New York City, San Jose, and Boston, it is actually the first time rental prices have increased since the first quarter of 2020.

We think these events have presented an excellent time to secure an investment property or second home. Besides being able to take advantage of the higher rental yields and improved cash flow, property values in these states will likely correct up as the market heats up this summer. What better time to do this than now?

The increase in rates is largely tied to the uptick in mortgage rates that has slowed down the demand for new home purchases and refinances. Notably, year-over-year rate comparisons show that in major cities, there are still some great deals available. In San Francisco, the average one-bedroom is now 24.3% more affordable than it was a year ago, and two-bedroom rentals are 23.6% cheaper.

America Mortgages is committed to helping our clients find the best mortgage solutions. Keen to know what your mortgage options are? With a 97% approval rate for both U.S. Citizens & Foreign Nationals, our global team of U.S. mortgage specialists are ready to help you! Find out all about your mortgage options with us today!

For more information, please contact [email protected].

Sources:Fortune