Luxury4Play.com banner

1 - 12 of 12 Posts

·
Registered
Joined
·
3 Posts
Discussion Starter #1
Hey all, wanted to get some insight from you guys, especially ones who have been in the market, prior to getting into real estate myself.

I have ~$250K that I want to invest in the US real estate, as a foreigner.

Simply put, my plan is to buy a land, build on it (either commercial or residential), rent it out. I did a very rough calculation, seems like I'd break even in 4-5 years (including the construction phase), then passive income starts flowing in. Is this easier said than done? Now, my questions:

1. Location? - Any recommendations?
2. As a foreigner investor, do I have any fall backs or difficulties when compared to a US citizen?
3. Should I take out a mortgage, if I can fully use the cash? Did some research on this and different people have to different opinions. Some even said use half the cash and mortgage the remainder.
4. Taxes? What taxes am I liable for? Are those the same for a US citizen?
5. Construction costs? What's the average construction cost per square foot for an average residential complex?
6. Is it preferable to do a feasibility study in order to know where I would stand?
7. Did I miss anything?

Thanks
 

·
Registered
Joined
·
3 Posts
Discussion Starter #3
Thank for the input. If you can shed a light on how much is enough cash? And what locations do you recommend? And if you can answer any of the questions, that'd be great.
 

·
Registered
Joined
·
2,010 Posts
In most cities 250k won't get u a good location/land plus a construction fees, permits, architects, surveys and so on.......the more you can spend the better, as a minimum you will need around 500k to do anything serious (it dosnt meter if it's cash or not)
You asked which cities
New York
Chicago (where I live and have all of my rental properties)
LA
.
.
Florida (which is going to be my next pick)

Good luck
 

·
Registered
Joined
·
1,066 Posts
I can't imagine breaking even in 4 - 5 years. That would be some super high rent in a location that has extremely inexpensive real estate.
 

·
Registered
Joined
·
3 Posts
Discussion Starter #6
I can't imagine breaking even in 4 - 5 years. That would be some super high rent in a location that has extremely inexpensive real estate.
I don't see why not. How many years do you have in mind? Anything over 5 years I reckon is too much. Unless you're investing over $5M.
 

·
Registered
Joined
·
1 Posts
Hi! I agree that 250 K is not that sufficient amount for buying a home in city, but you can try the suburbs. Location-wise Saratoga springs, Clifton Park can be considered where you may find affordable properties.
I think being a foreigner, you should prefer to buy a home instead of buying a land and then constructing it.
Also for a foreigner to invest in real estate in US, the documentation and taxes will be little different from the residents. You should go through a detailed study before thinking of investment.
 

·
Registered
Joined
·
3 Posts
1. Location? - Any recommendations? Based on the capital, its always great to look at emerging markets. For example in L.A, it's all about following the trends. Google just bought 12 acres in playa vista and that is going to generate a ton of employment opportunities with many google engineers making 6 figures. Downtown Los Angeles is on fire as well from people who bought condos 5 years ago are selling for 2.8x their investment.
2. As a foreigner investor, do I have any fall backs or difficulties when compared to a US citizen? Obtaining a loan would be difficult since you do not have any credit in the United States although some lenders will be open to working with you. Stay away from hard money loans as you are looking in the long term and the high interest rates aren't attractive. Hard money is great when you are going to go in, and flip a property in 6 weeks or so.
3. Should I take out a mortgage, if I can fully use the cash? Did some research on this and different people have to different opinions. Some even said use half the cash and mortgage the remainder.
4. Taxes? What taxes am I liable for? Are those the same for a US citizen? You will have to pay taxes just like everyone else on the dollar.
5. Construction costs? What's the average construction cost per square foot for an average residential complex? I've seen savy builders build with good quality materials at 200-250 a square foot.

Houston is a very great place to invest in now. I know people who are buying homes at 5 at time and renting their house to cover their mortgage and hoping for the property to appreciate and cash out at once. I'm saying 5 homes at a time because they're going based off volume.
 

·
Registered
Joined
·
1,954 Posts
1. Location? - Any recommendations? Based on the capital, its always great to look at emerging markets. For example in L.A, it's all about following the trends. Google just bought 12 acres in playa vista and that is going to generate a ton of employment opportunities with many google engineers making 6 figures. Downtown Los Angeles is on fire as well from people who bought condos 5 years ago are selling for 2.8x their investment.
2. As a foreigner investor, do I have any fall backs or difficulties when compared to a US citizen? Obtaining a loan would be difficult since you do not have any credit in the United States although some lenders will be open to working with you. Stay away from hard money loans as you are looking in the long term and the high interest rates aren't attractive. Hard money is great when you are going to go in, and flip a property in 6 weeks or so.
3. Should I take out a mortgage, if I can fully use the cash? Did some research on this and different people have to different opinions. Some even said use half the cash and mortgage the remainder.
4. Taxes? What taxes am I liable for? Are those the same for a US citizen? You will have to pay taxes just like everyone else on the dollar.
5. Construction costs? What's the average construction cost per square foot for an average residential complex? I've seen savy builders build with good quality materials at 200-250 a square foot.

Houston is a very great place to invest in now. I know people who are buying homes at 5 at time and renting their house to cover their mortgage and hoping for the property to appreciate and cash out at once. I'm saying 5 homes at a time because they're going based off volume.
If you have cash then always pay cash
 

·
Registered
Joined
·
155 Posts
For a house in the $250k you would probably get an about average rent of $2500/month. Property taxes, insurance, and property management will cost about $450/month. So you would make $24,600/year. So it will take 10 years. These are all guesses.
 
1 - 12 of 12 Posts
Top