In this Ask Us Anything! U.S. Real Estate Investing & Financing webinar, Robert Chadwick, CEO of America Mortgages, and Donald Kilp, Co-founder of Global Mortgage Group, provided valuable insights into U.S. mortgage trends, including the latest rate updates, market strategies, and investment opportunities for international investors.

For those who couldn’t attend, the recording is now accessible here.

During the session, Robert Chadwick (RC) and Donald Kilp (DK) addressed a variety of questions, offering informative responses to help investors make informed decisions in the current market environment. Remarks have been edited for clarity and brevity.

As an expat, I don’t receive a W2. Does that impact my rate or the terms that I qualify for?

RC: No, not having a W2 does not impact the rate or terms for expats, as the loan programs are designed for clients living and working abroad.

Is now still the right time to invest in U.S. real estate?

DK: Yes, given the current supply constraints, property prices are unlikely to decrease significantly, even with fluctuating interest rates. Buying now can be advantageous since future rate reductions could allow for refinancing at lower rates.

What expenses or costs can we expect when owning a property in the U.S.?

DK: Initial closing costs are around 5% of the loan amount, including fees, insurance, and taxes.

RC: Ongoing costs include property insurance, maintenance, property taxes, and any HOA fees, depending on the type of property.

I stayed up very late for this webinar, and I’m glad I did. As a Canadian, first-time U.S. real estate investor with excellent Canadian credit but no U.S. credit, how do I qualify to buy an investment property? What are the steps?

RC: You do not need U.S. credit to qualify. Programs exist that do not require credit history. Investment properties can qualify based on rental income rather than personal income.

Can you purchase real estate as an LLC?

RC: Yes, purchasing through an LLC is recommended due to liability protection and tax benefits.

How do you manage the properties?

DK: Property management services like Ausplan are available to assist with tenant management, maintenance, and overall property oversight.

How would you describe the current state of the California market?

DK: The California market is mixed. San Francisco is soft but has likely bottomed out, while other areas like Irvine have seen strong price growth.

I have a high-value property in California that is approximately US$18M. I have no debt on the property. It’s important for me to monetize the asset; what are my options?

RC: Options include a conventional mortgage or a short-term bridge loan for faster liquidity. A bridge loan can be arranged quickly, with the option to refinance into a conventional loan later.

Are there any recommendations on how to get the other 20-25%?

RC: Down payment requirements must come from the borrower’s own funds, though leveraging equity from other properties is an option for obtaining the necessary amount.

When should I apply for pre-approval prior to the expected date of purchase? And for how long is pre-approval valid?

RC: Apply for pre-approval when you begin looking for a property. It is valid for 60 days, assuming your financial situation remains the same.

Do we have to be working in the U.S.?

RC: No, it is not necessary to be working in the U.S. The programs are designed for foreign nationals and U.S. expats.

Does owning investment/rental property in the U.S. require me to file tax with the IRS – rental income tax, capital gains or inheritance taxes? Asking from a non-U.S. citizen and Middle East resident perspective.

RC: Yes, rental income requires IRS filing. However, proper tax planning can minimize tax obligations, especially for non-residents.

Does the loan cover other costs, e.g. legal, title, commissions, etc.?

RC: No, the loan covers the purchase price or appraised value but does not include additional costs like legal fees, title insurance, or commissions.

Where are we in the real estate cycle?

DK: Traditional cycles have shifted. With strong demand and supply constraints, despite higher interest rates, the market remains favorable for investment.

Will AM assist buyers with finding real estate across the States?

DK: Yes, America Mortgages can refer clients to vetted realtors and assist with finding suitable properties.

Do you have advisors in Italy I can talk to?

DK: While there are no advisors specifically based in Italy, America Mortgages has loan officers in Europe who can assist.

Can an investor utilize the 10-year interest-only period at any time during the loan term?

RC: The 10-year interest-only period applies at the beginning of the loan term and then converts to a principal and interest loan for the remaining 20 years.

Regarding interest rates, what is your forecast for 2025?

DK: Interest rates are expected to trend downward over time, although the exact rate is uncertain. Lower rates will benefit property investors through refinancing opportunities.

My husband is a dentist in Australia. Eventually, we want to move to the USA because the rest of our family lives there. Any suggestions for us?

DK, RC: If planning to move to the U.S., you can either buy an investment property now and convert it later or purchase a property as a holiday home. Pre-arranging financing with proof of income abroad can ease the transition.

Do we get to choose where we want to go in the U.S., or are there areas that are pre-set up for us?

DK: Investors have the freedom to choose any location. America Mortgages can provide guidance based on investment goals, such as rental income, lifestyle preferences, or market growth.

Does AM provide a one-stop-shop approach to investing in real estate in the U.S., i.e., source the property, secure the finance, manage settlement, etc.?

RC: Yes, they offer a concierge service that includes everything from finding properties to securing financing and property management.

What cities are the most promising, in your team’s opinion?

DK: Promising cities include Texas (Dallas), Georgia, and parts of the Midwest. The choice depends on investment goals and preferences.

In my experience, short-term rental can triple the cash flow. Am I allowed to rent my properties on Airbnb as a foreign citizen? Or must I obtain a working visa to do short-term rental business?

RC: You can qualify for the loan using long-term rental income, but how you rent the property (e.g., Airbnb) is up to you. There may be local requirements or regulations.

What is your down payment request per purchase?

RC: Foreign nationals need a 25% down payment, while U.S. expats need 20%.

How do we know we are getting the best market rate?

RC: As both a direct lender and broker, America Mortgages passes on the best rates available without additional markups.

Will an investor be able to monitor their investment online or via an app? i.e. view property, check capital growth, basic info to keep them satisfied with their investment?

RC: It depends on the property management company, though apps are available to monitor property performance.

Can I do cash out from Turkish property (equity)?

RC: No, loans are not offered for properties in Turkey, but equity from other eligible properties could be considered for investment in the U.S.

Do you charge any broker fees to your client? Or do you collect your commission from the financial institute?

RC: America Mortgages charges a brokerage fee directly to clients to secure competitive rates.

Can commercial property be purchased?

RC: Yes, commercial properties can be financed, though foreign nationals face more restrictions for properties above four units.

What is the standard term on rental agreements for investment properties in the U.S.?

RC: Typical rental agreements range from 12 to 24 months, depending on location and property management policies.

If I have a down payment of circa 25k (25% foreign national), what’s the upper limit/type of property I should be looking at to invest in, i.e. what amount of mortgage can I expect to go for? Also, who organizes things like finding sols/representatives?

RC: With a $25,000 down payment, the minimum property value should be $100,000. America Mortgages can assist with finding suitable realtors.

Loans to commercial properties, e.g. multifamily

RC: Yes, loans for one to four units are straightforward, but foreign nationals face more restrictions for properties with five or more units.

When investors analyze a deal, we will look at different metrics like capitalization rate, cash-on-cash return on investment, cash flow, IRR, and GRM. In your opinion, which metrics outweigh the other metrics? How do you define a good deal?

DK: Emphasizes the “1% rule” for rental income relative to property price and stresses positive cash flow as the key indicator of a good investment.

What about the approval? Are there any stumbling blocks on the way?

RC: Stumbling blocks are minimized through straightforward underwriting, focusing on the property’s cash flow rather than the borrower’s income.

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America Mortgages Launches New Application Platform for Non-Resident U.S. Real Estate Investors

The first step when buying or refinancing U.S. real estate is to get approved. This straightforward process ensures that every client is aware of and understands the mortgage options, associated fees, and is issued a pre-approval letter. This letter serves as assurance to the seller’s realtor that you have already completed the pre-approval process for a mortgage loan and are interested in purchasing their property.

We’ve now made this process easier and more transparent! 

America Mortgages, the leader in financing solutions for non-resident (foreign nationals and U.S. expats) U.S. real estate investors, is proud to announce the launch of its innovative online application platform. Designed with the unique needs of international investors in mind, the platform allows users to seamlessly complete a loan application from anywhere in the world, ensuring an easy, secure, and efficient experience.

The new platform offers a suite of advanced features aimed at simplifying the loan application process for non-residents:

1. Multilingual Accessibility: Applications are available in a variety of languages, making it easier than ever for international borrowers to navigate the loan process without language barriers.
   
2. 32-bit Encryption Security: With robust 32-bit encryption, the platform ensures that sensitive financial documents and personal data remain secure, providing peace of mind for investors.
   
3. Personalized Experience: Each borrower receives a tailored experience, including a step-by-step timeline of their application’s progress. Borrowers can track each stage of the process, ensuring they are always informed and engaged.
   
4. 24/7 Communication: The platform enables real-time communication with loan officers and support teams around the clock. Borrowers can ask questions, receive updates, and handle any issues without delays, ensuring a smooth loan application journey.
   
5. Common Sense Underwriting: America Mortgages has loan programs that qualify only on the rental income of the property on a 1:1 ratio. If the monthly rent can cover the monthly mortgages, the loan will qualify. Loan features include up to 80% LTV, availability in all 50 states, and loan amounts ranging from $100k to $3M.

At America Mortgages, we have one focus: providing market-rate U.S. mortgage loans for non-U.S. residents. This is all we do, and we firmly believe no one does this better. 

The new platform reflects America Mortgages’ commitment to providing innovative, client-centric solutions for global investors. Whether you’re a first-time investor or expanding your portfolio, America Mortgages makes it easier than ever to secure financing for U.S. real estate investments.

Our team works 24 hours a day, 7 days a week, to assist our clients with their needs. If you’re ready to apply for a U.S. mortgage loan, you can use this link.

If you’d like to speak with a loan officer right away, you can call +1 (845) 583-0830, or you can schedule a call with a loan officer anytime here.

We look forward to working with you!

During our recent live webinar, “How This Couple Used U.S. Real Estate to Retire Early!,” hosted by America Mortgages’ Co-Founder Donald Klip (DK), our special guests, Han Teo & Tracy Pah (HT & TP), shared their incredible journey from U.S. real estate beginners to owners of multiple cash-flowing rental properties in the U.S. In just four years, they achieved financial freedom, and during this session, they provided valuable insights into how they navigated the U.S. real estate market.

For those who missed the opportunity to join the webinar, it is available here.

Remarks have been edited for clarity and brevity.

1. Is it risky to invest in properties located far away? 

HT & TP: Yes, it can be challenging, but it’s manageable if you educate yourself, learn from people who have done it before, and build a reliable team, such as property managers, contractors, realtors and lenders. Proper due diligence and research help mitigate the risks of remote investing, such as choosing the right market with strong rent demand.

2. How did you overcome operational challenges while managing remotely? 

HT: Overcoming remote operational challenges involves building a strong team of local professionals (e.g. property managers, and contractors). You can establish trust through regular communication, such as video calls, and set clear operational guidelines through property management agreements.

3. How much capital is required to start investing? 

HT & TP: In some markets, cash-flowing rental properties can be priced around $150,000 to $200,000. A down payment of 25% means you would need around $50,000 to start, depending on the property price.

4. Do you have any properties financed by America Mortgages? 

HT & TP: Certainly, multiple of them! Having worked with multiple lenders before, America Mortgages has been the only lender who is well-versed in handling out-of-country loans, ensuring a timely, stress-free and smooth closing.

5. What is the minimum loan amount, and are there any restrictions on the type of housing?

DK: The minimum loan for some programs is around $100,000. The type of housing typically depends on the local market, but investing in homes priced between $150,000 and $200,000 is common.

6. How do you identify suitable properties for investment? 

HT & TP: Identifying properties involves first choosing the right markets based on factors such as job growth and demand for rentals that correspond to your investment objectives. You should also consider factors that attract renters, such as proximity to amenities. After selecting the right market, you do your due diligence to ensure that rents can cover all the monthly expenses. 

7. How do you manage to supervise renovations from overseas? 

HT & TP: Managing renovations remotely requires clear understanding of your scope of work, stringent vetting of your contractors, managing payment milestones with contractors, and having someone trusted to oversee the work. Regular communication and photo updates are crucial.

8. How do you protect your cash flow from extended periods of vacancy that aren’t covered by property insurance? 

HT: Mitigate vacancy risks by choosing markets with job and population growth, this ensures high rental demand. It is also important to keep your properties well-maintained and ensure your property is appealing to renters. Your property manager is vital in reducing vacancies as they are your first-line responders to prospective tenants.

9. What are your most popular loan programs? 

DK: The most popular loan programs include rental coverage loans, which require rent to cover mortgage expenses, and bridging loans, which allow investors to access equity from their properties.

10. What are the tax obligations for foreign investors? 

DK: Foreign investors have the same tax obligations as U.S. citizens, paying taxes on rental income according to state regulations. Setting up an LLC can provide tax advantages and reduce liabilities.

11. How do you overcome the psychological challenges of remote investing, especially in a country far from Singapore? 

DK & HT: Remote investing can be psychologically challenging, but it’s about mindset. The key is building a trustworthy team, knowing your market, and understanding that remote investing offers freedom while managing risk.

12. Is foreign investment approval required from the U.S. government as part of a home loan application? 

DK & TP: No, foreign investors do not need U.S. government approval to purchase homes or apply for loans. Setting up a US LLC can be beneficial for liability protection.

13. Did you need to establish an LLC or any other U.S. entity for liability protection? 

DK & TP: While not mandatory, it is highly recommended that an LLC be established for liability protection and tax benefits. An LLC can help shield personal assets and simplify tax deductions.

14. How do you mitigate the risk of being over-leveraged if housing prices decline, potentially leading to default or foreclosure? 

DK & HT: The key is ensuring your rental income covers the mortgage payments and maintaining reserves for vacancies. Even in a recession, demand for affordable rentals remains strong, since shelter is a basic necessity. In the US, there is no margin call, meaning that if your home value drops below what you borrowed from the bank, as long as you keep up with your mortgage payments, there is no need to top up the difference to the bank. This makes it one of the safest investment vehicles compared to any other equally leveraged products.

15. In how many cities are your properties located? How do you avoid contractors overcharging during renovations, and how do you find a reliable property manager? 

HT & TP: We are only focused on 2 cities in the Midwest. We prefer to nurture strong teams and strong relationships in each city to support our remote rental business instead of buying across multiple cities and spreading our attention thinly in each city. This also creates scales of economies. Doing thorough due diligence, getting guidance from a mentor, and getting multiple quotations for your renovation scope of work and estimated costs are essential to avoid being overcharged. As for finding a reliable property manager, there are several aspects to look out for, which are covered in detail in our Masterclass, such as what questions to ask to interview them, what are the red flags, what their management agreement should include, etc.

16. How do you handle hot markets and multiple offer situations?

HT & TP: With experience, we have devised strategies to put up compelling offers at the right price. With our network, we also have access to off-market deals. The strategy is going to be different for every unique situation. Still, it has allowed us and our graduates to buy great cash-flowing rentals today, meeting the 1% Rule (i.e. Monthly Rent ≥ 1% of the Property Value) even in super hot markets.

17. How long did you spend on due diligence before committing to your first property? Did you visit the site often before making your decision? 

HT & TP: The process took about three years, and we only visited the city once to validate our research and network before we started to buy properties. With so much available data and a strong network on the ground, there is no need to be physically there.

18. What rental yields are you achieving post-renovation compared to your cost of debt? 

DK: Rental yields are generally higher than mortgage costs, especially with the benefit of rising property values and decreasing mortgage rates, leading to expanding profit margins over time.