Help! Buying in the US?

[evey7]

Hi Im buying a property in rochester and am having problems opening a US bank account ,they say beacuse im not a resident. could anyone give advice on this and how to get a US tax numer as I hear I need one to receive my rent from the property. .

Thanks. E

[teepeeseller]

Originally Posted by PMBLUE57

I’m looking to take advantage of the weak dollar and falling house prices in the US.

I live in the UK and I don’t own any property anywhere, just rent. And as I don’t have a pension I really need to sort some kind of investment out for my future.

I’m hoping that I can find a company that will help me find, buy and let a place (one company does all) in maybe Florida (open to suggestions).

I’ve never done this before so any advice or contacts would be much appreciated! PLEASE!

There are some excellent investment opportunities in the US. My advice is to use local advice.
Florida is not all it is cracked up to be. I am married to an American and lived in Florida for a couple of years. Horses for courses I know - but I could not wait to get back to Blighty.
The Pacific NW is lovely. Four season, a lot of rainfall/snow. Given the choice I would go for Vancouver but Washington state, Oregon and N California are far too frequenty overlooked.
The Carolinas, Georgia, Florida Panhandle and Tennessee are worthy of consideration.
As a beginner I would advise you to stick a little closer to home. You need to get to your nest egg in a hurry and cheaply.
Just where? Well that's a whole series of other posts.

[oregon woodsmoke]

You get the tax number from the IRS (Internal revenue Service). All of their forms can be down loaded from their web site.

My local bank will provide the forms necessary to apply for a tax number. It surpries me that any bank can't do that. I think maybe you spoke to a low level clerk who just didn't know how, because it isn't a thing they do often.. Try asking the bank manager.

At any rate, if the bank won't do it, simply apply directly to the IRS.

[Lmgrei]

PMBLUE, there are a few things you have to consider. Your goal being one of them. Are you only purchasing so you can use as a vacation home on occasions? Are you looking for Monthly Cash Flow and Equity in the property? Personally I would stay away from areas such as Florida and Vegas. If the rent does not cover all your costs, such as mortgage, insurance, property taxes, water you could be in the hole every month. What is your exity strategy? Is it to sell in a few years after you have made good cash flow or refinanceto pull out cash and buy more? I suggest to many of my overseas investors to start with smaller cities with high rental demand and higher foreclosure rates. As many are foreclosing, they still need a place to rent. There are much smaller cities you can purchase properties and fix up for under 35k, with market values in the 50-60k range. Rents can garner $600-700 per month cash flow. If the tenant is on Section 8, gov funding, you can receive more. The yield is much higher and you are able to cover expenses without a problem, seeing green.

If you are just seeking to purchase a home for equity alone and do not mind coming out of pocket, because the market will eventually go up, that is a different strategy. For this, you should have a good monetary cushion. You will not see much cash flow though, or it may be negative.

There has been talks of different areas in the U.S. Buffalo was very common a few years ago. There was much attraction to the high yields, but the various taxes they impose and regulations, fees etc made it burdensome mentally, even if you make a profit. Better areas, through much experience and research that are providing good cash flow without as much hassles, are Pittsburgh PA, Dayton, Oh, Atlanta GA. Memphis, TN

Management is always the key. Whenever you purchase, if possible, find referrals for good property managers. They are the key to your prosperity whether investing at home or abroad. The fees are minimal with a good manager and they can make your investments carefree. Also try to get turn-key properties, that are ready for rental if possible. You do pay a premium 40-60k but the contracting headaches are gone. If you buy a fixer upper you can get a much bigger discount many times under 20k. If you do so, try to have contractor referrals lined up, or purchase from an investment company who can refer you to the best affordable contractors, or oversee the work on your behalf.

I hope some of these recommendations steer you towards success

[evey7]

Originally Posted by oregon woodsmoke

You get the tax number from the IRS (Internal revenue Service). All of their forms can be down loaded from their web site.

My local bank will provide the forms necessary to apply for a tax number. It surpries me that any bank can't do that. I think maybe you spoke to a low level clerk who just didn't know how, because it isn't a thing they do often.. Try asking the bank manager.

At any rate, if the bank won't do it, simply apply directly to the IRS.

many thanks for your replyil look into it again.
I thought that the rental agency would be helping with tax number but they werent sure of what to do.
thanks again

[oregon woodsmoke]

evey7, the normal day to day person in the USA does not have a tax number. Tax numbers are for businesses and corporations, and the occassional foreign investor.

Citizens in the USA use their social security number to pay their taxes, and you can't get one of those unless you become a legal resident. So if you ask for a tax number, unless they own a business, they are going to think you are asking for a social security number, and they know you can't get one of those.

The IRS will be happy to give you a tax number.

[evey7]

Originally Posted by oregon woodsmoke

You get the tax number from the IRS (Internal revenue Service). All of their forms can be down loaded from their web site.

My local bank will provide the forms necessary to apply for a tax number. It surpries me that any bank can't do that. I think maybe you spoke to a low level clerk who just didn't know how, because it isn't a thing they do often.. Try asking the bank manager.

At any rate, if the bank won't do it, simply apply directly to the IRS.

HI Did you have to post rental agreement and proof of purchase of property to IRS for us tax number or just form and passport?
They tell me it takes 12 weeks minimum..will i not receive rent till then?

thanks alot for your advice. eve

[oregon woodsmoke]

Evy, I am a US citizen, so have a SS # so don't need a taxpayer's number. All I know about it is that friends from Britain who were buying a vacation home here were told by my bank that it was no problem. They'd open a bank account for them and get them the taxpayer's number. I didn't see what documents they had to provide, but I know they opened the account before they bought the property (which would make sense, you have to have an account to wire your money to, in order to be able to pay for the property you purchased.) I also suspect that they had to prove they were in the country legally, which would involve showijng your passport and visa (but I am guessing)

There are a great many foreign investors in the USA, so the system is set up to deal with it. And by the way, once you have a specific number of dollars invested, you are then eligible for an investor's visa.

If you are dealing with a legitimate firm, any payments you receive will be held in escrow for you. I would expect payments to be dispursed with just a copy of the application for the number. But worst case, the money should be held in escrow.

The reason you need the taxpayer's number is that there is usually withholding tax from any money you receive, at the time you receive it, and there has to be an account to pay it into, or at a minimum to report it to. However, those of us in the USA very rarely pay any income tax on real estate investments because of the structure of the income tax and the deductions we are permitted to take off the top before we have to pay income tax on what is left.

Note: there are several types of "banks" in the USA. I suggest that you deal with one that has the word "Bank" in the name, because banks are the only institutions that can deal in foreign currency exchange.

Other institutions that act just like banks are 'savings and loans" and "credit unions", both a very good type to deal with for what they are good at. I'd stay away from anything called a "finance company".

Suggestion: the IRS usually has a page of explanation with each form, and the form should llist wjhat has to be provided with the form. If you download the form, it should tell you what you need.

[evey7]

HI THANKS for your advice.
The property investment company have said that they will transfer my rent to my own acount here in Ireland and I sent off for my tax number today so thats grand.thanks again evey

Originally Posted by oregon woodsmoke

Evy, I am a US citizen, so have a SS # so don't need a taxpayer's number. All I know about it is that friends from Britain who were buying a vacation home here were told by my bank that it was no problem. They'd open a bank account for them and get them the taxpayer's number. I didn't see what documents they had to provide, but I know they opened the account before they bought the property (which would make sense, you have to have an account to wire your money to, in order to be able to pay for the property you purchased.) I also suspect that they had to prove they were in the country legally, which would involve showijng your passport and visa (but I am guessing)

There are a great many foreign investors in the USA, so the system is set up to deal with it. And by the way, once you have a specific number of dollars invested, you are then eligible for an investor's visa.

If you are dealing with a legitimate firm, any payments you receive will be held in escrow for you. I would expect payments to be dispursed with just a copy of the application for the number. But worst case, the money should be held in escrow.

The reason you need the taxpayer's number is that there is usually withholding tax from any money you receive, at the time you receive it, and there has to be an account to pay it into, or at a minimum to report it to. However, those of us in the USA very rarely pay any income tax on real estate investments because of the structure of the income tax and the deductions we are permitted to take off the top before we have to pay income tax on what is left.

Note: there are several types of "banks" in the USA. I suggest that you deal with one that has the word "Bank" in the name, because banks are the only institutions that can deal in foreign currency exchange.

Other institutions that act just like banks are 'savings and loans" and "credit unions", both a very good type to deal with for what they are good at. I'd stay away from anything called a "finance company".

Suggestion: the IRS usually has a page of explanation with each form, and the form should llist wjhat has to be provided with the form. If you download the form, it should tell you what you need.

[deejay-55]

Originally Posted by Hates Slimy

I invested in Florida approx 2 years ago ... There are a lot of Sharks out in Florida and more in UK who are operating in a non regulated industry...

You were unlucky getting into the market at the top - there are certainly some bargains to be had right now. Also, Realtors in the Florida US real estate market are regulated by the Department of Professional & Business Regulation and by the National Association of Realtors - not all real estate agents are Realtors.