International Buyers
Commercial Real Estate Loans Available to Foreign Purchasers
FOREIGN PURCHASERS:
These borrowers may or may not live and work in a country other than the U.S. They do have a SSN, a US Bank Account and established U.S. credit. They do not need to have filed previous income tax returns, although they may want to consult with a professional tax consultant after they purchase US Real Estate. They are interested in purchasing multifamily investment real estate and certain types of other commercial real estate.
COLLATERAL:
Multi family residential properties are defined as having at least five residential units or more. They may be in an apartment building or complex and can be garden style, in which are usually one or two 2 story buildings, or can be mid rise three or four story buildings, or high rise buildings of five stories and above.
One common commercial property considered to be acceptable collateral may be a mixed use building. This can be as simple as a multi family property WITH a commercial unit included in the building, such as a grocery store, restaurant, office or even a dry cleaner. Often there is a residential living component combined with a commercial space to be considered a mixed use building; however, that is not a requirement.
Other acceptable commercial buildings can include Retail Stores, Office buildings, Industrial Buildings and Strip Malls.
Unacceptable buildings would be special use or special purpose buildings such as free standing restaurants, automotive repair or gas station facilities, and hotel or motels.
DOWN PAYMENT REQUIREMENTS:
Commercial real estate lending has different requirements than residential lending since the loan requests are calculated based on the cash flow of the building; therefore, the higher the cash flow the lower will be the down payment requirements. Most commercial real estate in the San Francisco Bay Area is financed with at least a forty percent down payment, and many buildings have a cash flow that may require even larger down payments.
Residential Real Estate Loans Available to Foreign Purchasers
FOREIGN NATIONALS:
These borrowers live and work in a country other than the U.S. They do not have a SSN or established U.S. credit. They may be purchasing property for a variety of reasons, including:
- Desire for a second home
- Son or daughter attending school in U.S.
Lending guidelines:
STATED INCOME, STATED VERIFIED ASSETS, VALID PASSPORT AND 30% DOWN PAYMENT with automatic payment withdrawal.
NON-PERMANENT RESIDENT ALIEN:
Aliens whom have not acquired permanent residence status, are not U.S. citizens but may reside in U.S. They may also be in the U.S. on a work VISA and have been assigned a SSN and have established U.S.
credit. The applicant may be purchasing property for a variety of reasons, including:
- Wish to obtain permanent residence status
- Expanding business to the U.S. requiring residence here
- Employer has a U.S. location and employee is being transferred
Standard guidelines:
STATED INCOME, STATED ASSETS, 30% DOWN PAYMENT AND HAVE A VALID WORK VISA [OR]
FULL INCOME DOCUMENTATION, 20% DOWN PAYMENT WITH 2-YEAR U.S. WORK HISTORY AND VERIFIED ASSETS
PERMANENT RESIDENCE ALIENS:
These are lawful residents of the U.S. who have acquired permission to live and work here permanently.
Standard Lending Guidelines.
20% DOWN PAYMENT WITH 2-YEAR U.S. WORK HISTORY, VERIFIED ASSETS, AND VALID GREEN CARD REQUIRED
- 70% Loan To Value to $2MM (Higher loan amounts considered)
- (1-4) Family Residences Including Condos
- Only Joint, TIC, or Sole Ownership Allowed
- Fixed Rate & ARM Programs Available
Article of the Week
If you are an international client considering investing in San Francisco property, we can help you find what you are looking for and help to set up financing.
Weak dollar attracting home buyers from overseas
Dina ElBoghdady, Washington Post
Sunday, March 23, 2008
(03-23) 04:00 PDT Washington – –
Stephane Torriglia flew in from Spain about a month ago to check out a row house for sale on Capitol Hill in Washington, D.C., and declared it the “perfect” buy for someone like him, a foreign businessman with euros to invest.
“The idea is we’ll convert our euros into dollars,” Torriglia said. “We can rent the place out. Maybe in five years or six, the dollar will be strong again and the real estate will gain value. It’s an opportunity.”
With the U.S. dollar at its weakest level in decades, international buyers are chasing housing bargains in America, eager to take advantage of their purchasing power and the declining prices in some of the best-known U.S. cities.
Against that backdrop, the Washington area is luring more than the usual crowd of diplomats. Now that the dollar is cheap, the region’s appeal has broadened, enticing international business types and sophisticated investors who find comfort in the area’s global reputation as a recession-proof market.
Several area real estate agents said inquiries from abroad have at least doubled since a year ago, mostly from wealthy Europeans and people in such growing economies as India and Russia, where the currencies are gaining against the dollar. Some are making all-cash offers. Even Web sites are seeing a surge in page views from overseas. The international traffic for D.C. area listings was recently up 60 percent year over year on Zillow.com, a popular real estate Web site.
“The impact of the weak dollar on foreign demand is one of these market forces that has snuck up on us,” said Jonathan Miller, chief executive of Miller Samuel, an appraisal company in New York. “It’s been gradually gaining momentum, and the demand has accelerated as the fall in the dollar has accelerated.”
The math works out nicely for Torriglia, 50, and his wife, Isabel. The euro is now worth about $1.55 – a record high. On top of that, Torriglia has bargaining power in a down market.
Torriglia has been working with Dana Scanlon, of Keller Williams Metro Realty, an agent he found on the Internet. Scanlon said Torriglia was one of three foreign potential buyers who contacted her in a single week in January. A year ago, the only foreign clients she had were relocating for their jobs, not investors like Torriglia, she said.
“The increase in that kind of buyer has been exponential. I’ve gone from zero to 10 nibbles since the beginning of the year,” said Scanlon.
Hasan Nazzal, who lives in the United Arab Emirates, has been shopping since December for land in Virginia where he could build a house and possibly keep horses. Leesburg appeals to him, he said, because it’s close to one of his brothers, who has lived in the area for nine years.
“I see this as being for my son’s future” or maybe a place for the family to gather, he said.
Nazzal, an engineer who owns an interior-design firm, said he can spend $1 million on the land.
In a 2007 study by the National Association of Realtors, about 25 percent of the real estate agents surveyed said they had more business from international clients than they did five years earlier. The weak dollar was cited as one of the reasons for the uptick.
More than a quarter of the foreign buyers bought their homes with cash, and those who did take out loans put down more money than domestic buyers, the study found.
This article appeared on page K – 12 of the San Francisco Chronicle
