03:24
Kyle Mazzuchin
Hello, everybody. Kyle Mazzuchin here, vice president for America Mortgages for the Canadian markets. Thank you very much for joining us today. The point of our presentation today is to bring you value and tools to understand how to finance our real estate as a Canadian investor. We’re very proud to look at how to provide you with the tools and knowledge. Then we’ll go through all of those tools and pieces of knowledge. At the very end, we’ll have a question-and-answer period. We have a wonderful guest, co-founder of America Mortgages, Mr. Robert Chadwick, who will be able to answer any questions as well as myself in terms of the process for you.

04:18
Kyle Mazzuchin
So here at America Mortgages, we’re one of the only few places to have tools to help foreign nationals provide to get you applications across the border with relative ease. How to finance U.S. real estate as a Canadian investor? We’ll go through a bunch of slides here that will provide statistics, programs, and anything to do with our suite of programs here at America Mortgages. So who are America Mortgages? You’ve seen a lot of our videos, on LinkedIn, Facebook, and Instagram, and been inundated with this presentation. We’ll go through the why of who we are and what we do, and then also about the background, about myself, how I can be able to help you with anything when it comes to America Mortgages here in Canada. Then we’ll go through statistics and some Canadian news.

05:40
Kyle Mazzuchin
Over the last couple of years, it’s been very difficult for investors in Canadian real estate. So we’ll go through why the U.S. versus Canada, and then we’ll go through the application process. How easy it is to look at having our 15-minute interview to get you the mortgage application and conditional approval you need and the confidence for you to go buy real estate. Next, we’ll go through our loan programs, and at the end, we will look at questions and answers. So Canadians in the U.S. market, $6.6 billion was spent on real estate, rental, and permanent residence between April 2022 and March 2023. Number two, as the second top foreign buyer of U.S. real estate. Being so close to the border, why not? Then 55% of those purchases, you’re looking for somewhere warm there, Canada.

06:36
Kyle Mazzuchin
So you know how cold it can get in Ontario or Winnipeg or even in Montreal? You’re looking at Florida, Arizona, and California to get away from the frigid temperatures of the winter. Some facts here from the different associations. As you can see, fewer homes were built over ten years following the U.S. crisis than in any other decade since the sixties. As of the fourth quarter of 202, the U.S. has a housing supply deficit of 3.8 million units. The National Association of Realtors projects that the housing deficit is closer to 6.8 million homes. Also, we find a 30% increase in the monthly number of homes, coming onto the market would have been necessary to keep up with the demand of the pandemic. So just some facts there. Why America Mortgages? We’re 100% working with individuals living and working abroad.

07:40
Kyle Mazzuchin
We only focus on foreign nationals and U.S. expats and we have representation in twelve different countries. So time zone is not an issue. Culturally sensitive to seven different languages and understand any sort of cultural nuance in the interviewing process with you. All loan programs do not require U.S. credit. So we’ll probably ask for a credit bureau report from your home country in the language that we’re doing your mortgage application in. In this case, English. Common sense underwriting is a very straight approach. In Canada, as you know when you’re doing a mortgage application here, sometimes you’re asking for a lot. With our common sense underwriting approach, we’re not going to be doing that with some of our programs. Our programs are also simple and easy to understand. No age limits or restrictions. Interest servicing only facilities.

08:33
Kyle Mazzuchin
You can go 40 years versus Canada, 30. Loans in all 50 states. Transparent fees and process. Also 24/7 processing of your mortgage as well. So we’re always working to make sure that we’re meeting and exceeding expectations in terms of your deadlines. About myself, ten years here in financial services and leadership experience. Loved mortgage origination. That’s why I came back to it and looked at America Mortgages as an opportunity to provide value for truly borderless lending solutions. I’m a former senior leader of mortgage specialist for the Bank of Montreal, overseeing a team of 25. It was a fantastic experience, but with that came the opportunity to look at America Mortgages to help, and missed the mortgage origination side. I’m based here on beautiful Vancouver Island with my spouse and two children.

09:30
Kyle Mazzuchin
We’re located here in the Cowichan Valley if you’re very familiar with it. So why invest in the U.S. versus Canada? Larger, bigger, better diversified economy. Global influence is the number one economy in the world as well as number one in real estate markets, and also known for its innovation. Look at the top tech companies and airline companies located in Washington state. Tesla, and Microsoft, don’t even have to go any further. Lower taxes in Canada. I think that comes up. When you hear lower taxes, you’re putting your ear and listening for sure. Favorable tax treaties as well, stronger currency, and a 30% difference in terms of the income itself. Also, it has a reserve currency status with different countries around the world. So, we’ve heard a lot about government intervention in the housing area due to some challenges with affordability. Could be supplied?

10:34
Kyle Mazzuchin
We don’t know, but here are some pieces from around Canada. In British Columbia, for example, a ban on non-resident short-term rentals from May 2024 on, $3,000 a day could be fined. In Ontario, short-term rentals are allowed for only essential workers and travelers needing housing for at least two weeks, and Airbnb is not allowed in Quebec. A three-and-a-half percent tax on short-term rentals on the price. Operators must display government registration numbers on their ads and listings to comply with local regulations. There’s more. The federal government is now putting some rules in. The minister of housing has hinted at national regulation for short-term rentals affecting platforms like Vrbo and Airbnb. Tax changes when it comes to the CRA. CRA limits income tax deductions on short-term rentals to tackle the housing shortage.

11:30
Kyle Mazzuchin
From January 1, 2024, no tax deductions for short-term rental expenses in restricted areas, so this impacts Airbnb and Vrbo again. Further, if you own a trust or have some sort of holding company, the underused housing tax hasn’t been talked about as much. There’s a federal 1% tax on vacant or underused houses in Canada like BC. Right now, you’re all filling out any sort of vacancy reporting to the provincial government of British Columbia. So what does that in terms of its application? It targets foreign national owners, and may also apply to certain Canadian owners like partners, trustees, and corporations. Calculation exemptions based on the assessed value or recent sale price, exemptions available for specific entities and situations.

12:25
Kyle Mazzuchin
But if you don’t comply, CRA is going to be knocking at your door to get some sort of penalties which could go from a $10,000 fine if you haven’t registered yet. And obviously, they’re changing as well. So please talk to your accountant here in the next little while because the deadline is coming up for personal income taxes at the end of April and in June for business, for self customers. Popular places to purchase real estate. The biggest one. We all love Florida, especially you eastern Canadians, the Quebecers, and Ontarians. Very popular, very warm retirement areas, offer diverse options at affordable prices and also a large Canadian community. Arizona is preferred by Canadians for its dry, mild climate, especially for its winters. Got to love the Grand Canyon. Super Dry Monument Valley, then also you can probably watch hockey games.

13:23
Kyle Mazzuchin
A lot cheaper than going to the Leafs games or Vancouver Canucks. California has the biggest population size of Canada, 36 million. Same size as Canada pretty well. Diverse lifestyles with oceans and mountains and forests and vineyards. Lots of business and entertainment opportunities with Hollywood being nearby. Range of properties for people that want to go there and some prices in some areas are also a little bit higher. Who would have thought Louisiana with a rich French history and, a unique blend of influences, right near the ocean, has its own culture as well? So fantastic to see you there, especially during Mardi Gras. Montana, close to Alberta. Beautiful, nature enthusiasts with an abundance of outdoor activities for you hunters out there, even you skiers. Offers landscapes, mountains, lakes, and rivers and in comparison to other states, a very low population.

14:26
Kyle Mazzuchin
Also, one state that you wouldn’t have thought about, is South Carolina. Appeals to Canadians for its charm, hospitality, and mild climate. Sandy Beaches, can’t go wrong, also its rich history. So U.S. mortgage overview. What does that mean to you? Again, no credit is required. That little AUM there, so you don’t have to take money from your bank account, leave it at a bank in the United States. So assets are under administration. You don’t have to worry about that. You can keep your hard-earned money where it is, where you are. Foreign income is allowed. Loans and programs in all 50 states. Some other pieces to consider and focus on. So you’re Canadian, you’re considered a foreign national. That means that you can purchase up to 75% loan to value or a 25% down payment.

15:19
Kyle Mazzuchin
So if you give us the proper documentation that’s requested, we’ll be able to give you a loan approval in 72 hours. We can close your mortgage application in 30 to 45 days, and consign at any sort of local U.S. embassy. Or we do have some alternative options to help make the process painless. We can also do a purchase, refinance, or equity release, whichever is the need. We can go 30 years amortization regardless of age. Ten-year servicing facilities and loan programs without income are available. The one thing that we’re very proud of here at America Mortgages is that 97% of the loan applications that are submitted are approved. And we’re truly 24/7. You contact us on our website, americamortgages.com.

16:12
Kyle Mazzuchin
You click on our website if you want to have a chat at 02:00 in the morning, there’s someone there for you to chat about U.S. real estate let’s look at our loan program, shall we? So here’s the process. Number one, you talk to me. Second, we choose a program after our initial conversation and or consultation. Third, you provide the relative documents, and then I provide you with the loan approval. Number five, we review your loan approval with the loan officer. And then six, we order the appraisal to make sure that whatever you are purchasing, the value matches market value. We’ll look at underwriting conditions. We’ll communicate with you throughout the full process. You will receive emails to make sure that we’re clarifying certain pieces for insurance.

17:06
Kyle Mazzuchin
All those pieces, making sure that your application is nice and clean going through, and that we’re working with the lender to make sure that they’re satisfied with their conditions as well. Then probably the best part, the signing is arranged. And then the money is out the door and it closes and you receive your keys in your hands. Some of our programs. One thing I’m passionate about is the AM rental coverage program. No personal income is required. We qualify only on the property’s projected rental income. Yes, only on the projected rental income. No U.S. credit or residency is required. So if we go back on some of the slides that we had, in Canada, most of the major provinces have some sort of restrictions. Loan amounts are from at least $150,000 to $3 million. So that’s a big part of the market.

18:05
Kyle Mazzuchin
Some loan structures, for example, have a 30-year fixed and interest-only facility available, and again, we close in 30 to 45 days. How do you qualify? You don’t even need one to 1 to 1. 0.75 to 1 for your rental coverage. So total mortgage payment, principal, interest, taxes, and insurance, are $1,000. You only need $750 of income to qualify for this. Fantastic. The investor program. So we can use foreign income, but tax returns aren’t required. I bet you’re going, what? I don’t need tax returns. We qualify based on income letters from either your employer, your home country, or your accountant. We use a two-year average. We can go into the particulars of that particular program later. We don’t need any sort of U.S. credit or residency.

19:00
Kyle Mazzuchin
Again, the loan amounts between $150,000 to $3 million. 30-year fixed and interest-only facilities are available and 75% financing for new purchases. And again, we can close in 30 to 45 days. Again, how to qualify? You’re reporting $10,000 on your letter. Your mortgage payment, taxes, and insurance can exceed 43%, in this case, $4,300. Do a bit of analysis. Debt to income ratio or in Canada, TDSR. So for you bankers, and mortgage brokers out there, the total debt servicing ratio in the U.S. is called DTI, debt to income ratio. So if you are a U.S. citizen living in Canada, I’m sure you’ve been through maybe even a couple of applications. So for us, we ask for two years of U.S. income taxes only the same as if you were working in the States. So you’d qualify under the same criteria as if you were living there.

19:55
Kyle Mazzuchin
No U.S. residency is needed. U.S. score of 680 or higher for your FICO score. And again $150,000 to $5 million for that. Then also, 30 to 45 days closing as well, in case you need to have that rush. Again, expectations should be a little bit different between Canada and the U.S. when it comes to closing your mortgages. 30 to 45 days is considered lightning fast. So just to kind of put that little tidbit out there for you. So, how does it work? $4,300 if we’re going to consider mortgage payment taxes and insurance. Gross personal income based on a two-year average, based on your U.S. tax returns. So your 1040s, your W-2s, and W-4s can exceed 43% for the DTI, in this case, debt to income ratio.

20:45
Kyle Mazzuchin
if we were to translate it to Canada, the total debt servicing ratio for some of you investment advisors. If you want to use a portfolio, we can utilize that over a two-month average. So if you have customers with a high net worth, who want to buy this huge mansion in Florida, but are worried about qualifying? It’s not so bad. You don’t have to take the money that you’re controlling. You don’t have to give it to the bank where we’re going to be placing it. No U.S. credit is required as well. We’ll ask you for a borrowell.com statement Equifax from your local province. Or you would provide that, really easy to get loans up from $3 million to $100 million. And then again closing within 30 to 45 days.

21:36
Kyle Mazzuchin
America Mortgages’ high net worth program will take the average of the portfolio at $5 million divided over the fixed rate term. Let’s use five years as an example. If the mortgage payment, tax, and insurance don’t exceed $83,333, you’ll be able to qualify. Some of you have grade twelve student doing their MCAT, doing their exams. They’re looking at some of the U.S. states or schools to have quality education. You can qualify based on projected income and have your child essentially live on the property. Also, we can have them on title and some net benefits of that would be if they were to provide or if they were to stay and get the residency, it helps them open the door for getting their U.S. credit score established.

22:38
Kyle Mazzuchin
Some thresholds to meet loan amounts between 150,000 and $3 million and 30 to 45 days to close. qualification, rental income, and property expenses have to match at least one-to-one for this particular product. So in this case, $2,400 for the income, principal and interest, and tax insurance don’t exceed $2,400 as well. One-to-one coverage, we’re approved. Fantastic. A little bit more sophistication. We do have commercial-based products, multifamily units with five units or more. So if you have six or seven units in heritage homes, because heritage homes are normally built huge, and if you’re subdividing the units inside it, you’ll be able to qualify for our AM commercial + program. No personal income is required. No recourse is available. No U.S. credit is required. Available between $1 million to $100 million in communities across the United States.

23:45
Kyle Mazzuchin
portfolio, you have more than ten U.S. properties. You need a mortgage. You don’t want to provide essentially all your paperwork just for the one house. We can cross-collateralize most of your portfolio with four properties or more. No personal income is required. Loan amounts between $250,000 to a million dollars in this particular case. And 40 to 60 days need a little bit more because of the complexity of getting all your tax returns, and Excel spreadsheets, organizing them, and sending them to the lender on your behalf. So some information about us here at America Mortgages, where we’re located, and then my information at the bottom. You can reach me at [email protected] or you can reach me at 778-838-9654. Then we’ll have my calendar link if you would like a consultation in regards to this particular presentation as well.

24:47
Kyle Mazzuchin
So, that’s our presentation for today. We’ll be opening up a Q&A here with Mr. Robert Chadwick, who’s the co-CEO and currently joining us right now. So really fantastic to have the amount of audience here today, Robert. We do have a series of questions and people in the chat here. So how are you, Robert? Maybe let’s talk about how you’re doing today.

25:18
Robert Chadwick
Yeah. I’m well, Kyle, thanks. Great information, especially for me to see the challenges that even Canada has these days when people are looking to invest in real estate domestically. So our clients, in general, are more sophisticated, more educated, and more affluent, because they are smart enough to look at markets outside of their natural. I think you represented this perfectly. The advantages the U.S. real estate market has, not only just Canada but if you talk about global markets, no stamp duties, all of these things that impact the opportunity for a borrower to get wealth or to create a viable portfolio that they can sell at retirement, take passive income or even pass it down generationally. The U.S. is by far the best market.

26:16
Kyle Mazzuchin
I would agree. After I had my own rental transactions personally, paying land transfer taxes to the local province, there’s part of me being a citizen. Definitely, taxes are required, but sometimes having an extra $30,000, some people may not have that to pay for their house. And seeing where historic lows during the pandemic to where it is today, every dollar is being counted for cash-flow and everything like that. So totally agree with you, Robert, on that. Looks like we got a bit of questions here. Just going to open it up here and we’ll take a look. We got Anthony Galano here asking if can canadians sign mortgage documents remotely via DocuSign for properties purchased in New York. Yeah, we can.

27:04
Kyle Mazzuchin
So we utilize some services, depending on the lender that we choose. They can be done through notarial means, through online services. So, we’ll take a look at that, which is fantastic. A lot of flexibility there for you to sign from home, but a lot easier would be to go to the local American embassy if you’re in a major city like Vancouver or Toronto.

27:34
Robert Chadwick
Sorry, Kyle. Let me expand on that as well, because I think we see this a lot, you and I, as clients, whether they’re in Canada or anywhere else in the world, think where do we sign? Canada is unique. Because it is very close to the U.S., you will see maybe a lot of people that will fly over to the U.S. to sign, which is perfectly fine. But we’ve got a multitude of ways for people to sign their mortgage documents as conveniently as possible. Certainly, if a remote notary is allowed, kind of like signing it over a Zoom, that’s possible depending on the country that you’re in and the state that you’re obtaining the mortgage.

28:20
Robert Chadwick
But if your country is part of the Hague, you can sign with an Apostille, meaning that you can go to your local notary and sign with your local notary and that local notary gets it apostille stamped. And it’s normally at the high court or whatever the regional thing is there in that country. That’s sufficient and it makes it a very easy process for the borrower. Certainly going to the U.S. embassy if it’s convenient or the consulate is absolutely an option. But we’ve tried to provide the availability for you to sign in a multitude of ways, depending on whatever is the most convenient for you.

29:10
Robert Chadwick
So I think, Kyle, you’ve had various experiences with this, but anytime that your clients want to sign and they have a question about how we do it, it’s best to speak to your loan officer and do it from the very beginning and already set up the structure because U.S. embassy appointments, just like anything else, is not always available and easy.

29:36
Kyle Mazzuchin
So Canada, the local notary is fine. We’ll look at it on a one-off basis and get you some clarity on that. Being so close to the border, really nice. For example, I can take a ferry across to probably Seattle from where I am in the world. So second question, we got a lot of questions. As a Canadian, what would be the best way to register a property? Using company or personal?

30:03
Robert Chadwick
Yeah, a lot of people these days are using a limited liability corporation. An LLC is probably what it’s better known as. It gives you a variety of protections. Whether it is some sort of tax protection, some sort of asset protection, or personal protection in case maybe somebody gets injured in the property that you’re renting, there’s no direct path to you. They’re just going to go into the LLC and however, that works with the attorneys. But this is the most common way to structure the ownership of a property. So what it means is the borrowers are responsible for the mortgage, anything like Canada, the same thing. But the ownership of the property or how the property is held is held in an entity and it makes it a very easy process. And again, this is one of the great things about U.S. real estate investing.

31:11
Kyle Mazzuchin
Excellent. Just to translate that to Canadian. So if you have a holding company and you have a slew of properties with a big chartered bank, bank of Montreal, Toronto, Dominion, RBC, they’ll have a personal guarantee on that making sure it’s nonoperating. So essentially that translates to a limited liability company and then you would be guaranteeing the mortgage on that as well. In terms of operating, I don’t want to get too far. I don’t have my CPA. So again, you may want to get some tax advice through a cross-border specialist, or you can go to our website, americamortgages.com, go to the concierge, fill out our tax advice form, and then we’ll have one of our partners get a hold of you in due course. All right, so third question today.

31:56
Kyle Mazzuchin
How do I go about opening a cross-border bank account and would America Mortgages help me with that? My spouse is from Japan, I have multiple currency accounts with wise.com, which open up utilizing the U.S. dollar piece. It does qualify as well. And if you need help with that, all of our loan officers will have a particular way of assisting you. Or if you would like, if you’re in southern Ontario, you want to travel to New York, just go to your local bank nearby and you can also open up a bank account there. Our fourth question today is, are there any preliminary steps I can take to make sure the approval process goes smoothly? Robert?

32:47
Robert Chadwick
Oh, super good question. Our whole business model is the customer journey needs to be smooth. That’s really what we focus on. The first thing you do before you start looking for real estate at all is to make sure that you get pre-approved for a loan. I mean, you want to know how much the payment is going to be, what kind of interest rates you have, what kind of terms you qualify for. One of the things, Kyle and I talked about this earlier that we’re super proud of, is 97% of our loan applications get approved. And normally if they don’t get approved, it’s not an issue with the borrower, it’s normally an issue with the property that they’re trying to buy or refinance.

33:32
Robert Chadwick
So making the process, following what the loan officer or our processing team sends you, and responding to emails promptly will make the process as smooth as possible. All of our loan officers, and I think this is imperative if you want to be successful as a loan officer, need to be super organized. And we realize that not everybody works that way. I mean, I’m probably not as organized as I should be, but as long as you’re following what the loan officers say, and our loan officers have exceptional training and this is all we do, 100% foreign national or expat lending, the process will be smooth. Certainly, like anything, there are maybe some bumps in the road, things that come up that we’re not expecting. But again, because this is all we do, we try to foresee this in the beginning.

34:28
Robert Chadwick
So to answer the question maybe a little bit more clearly, I think following what the loan officers or the processing team instructs promptly will make this process go as smoothly as possible.

34:42
Kyle Mazzuchin
Excellent. Thanks, Robert, for that. Another question. We got 18 of them in full, so hopefully we have enough time to get through them here. So how long will it take for a non-U.S. resident to get pre-approved? And how much does a pre-approval cost?

34:58
Robert Chadwick
Well, the great thing is it costs nothing except for some time. Our documentation, as Kyle had pointed out, is very simplified. Because we’re doing loans for borrowers all over the world, whether they’re from Sydney to Shanghai, we’ve tried to make this process as simple as possible and with as limited paperwork to make it a viable, common sense loan, but without over cumbersome of having to go through ten years of tax returns and dissect this and that. The loan process, once you send in the documents, takes about 72 hours, Kyle, right now, to issue a loan approval. And this is what is awesome. Once you have that loan approval, we issue you a letter. Once you have this letter, this is powerful.

35:57
Robert Chadwick
When you find a property that you want to buy, you turn this letter in with the offer to the realtor, and that realtor knows that Kyle is behind you, America Mortgages is behind him, and you have the mortgage financing in.

36:11
Kyle Mazzuchin
Excellent. So free, zero investment of your time to make sure that this goes smoothly. And communication. Communication is really good. So our next question is here. As a foreigner or non-U.S. resident, what is the maximum loan-to-value available? And is the loan to value dependent on income?

36:33
Robert Chadwick
So again, really good questions. The max loan to value for a non-U.S. citizen is 75%, and that’s across the board, which is really good. The LTV, there are two ways to qualify. Kyle had touched one of our loan programs, which we’re super proud of, where it is pure common sense underwriting. The way a rental property should qualify is based on what the rental income should generate. I mean, it just really makes sense. So we have a loan program that qualifies on the rental income of the property, and how we find what that rental income of the property is, is a third party appraiser, just as they would appraise your property when you’re purchasing. That also protects you to make sure you’re buying it at the right price and for the lender to make sure that they’re lending at the right value.

37:34
Robert Chadwick
But it also gives us a very accurate indication of what the general rents are in that area. That’s what’s used to qualify. There’s no funny business. It’s a very pure common sense underwriting on these loans. A lot of people think, oh, my gosh, they’re not asking for income. What’s happening? But if you think about it, this is the logical way that you should underwrite an investment property. And if you were to go on, does it depend on your income? If you’d like to provide income, rather than providing your tax returns and your end-of-year statement, we have a very simple way of doing this. And again, this has to do, because we’re doing this in various countries and various jurisdictions, doing it through tax returns would almost be impossible and time-consuming.

38:29
Robert Chadwick
We have a template, and Kyle will send you the template once you start the process. And that template is very straightforward. It says, the current year to date and the last two years of your income. That has to be completed by your employer if you’re employed, or by your accountant if it’s self-employed. Again, simple, easy, common sense ways of buying or obtaining a U.S. mortgage for investment property.

38:52
Kyle Mazzuchin
Excellent. Translation line 150 of your notice of assessment from your T-1 generals. So hence, just translating here for you folks that have maybe complicated lending, or if you have your T-2 generals from your corp, or if you have audited financial statements with review engagements or notice to the reader, we just take your gross for the two years and then a year to date, maybe even based on your bookkeeper, providing that to your accountant to validate. And then that’s all we need. We don’t need to have a stack of 40. We don’t need to take the French returns from Quebec, as they’re a little bit different than the normal English returns as well. So, simplified approach. Letters from your accountant or your employer. Next question.

39:36
Robert Chadwick
Go back to this. Think about this, Kyle. In Canada, things are in English, and it makes sense. Or maybe Quebec might be a little bit different. But can you imagine having to look at tax returns for a variety of countries around the world with people who have an interest in buying U.S. real estate? Again, this is like simplified, smart underwriting.

39:58
Kyle Mazzuchin
Like England, Singapore.

40:02
Robert Chadwick
Exactly.

40:03
Kyle Mazzuchin
Like how the stacks are, and then you have to translate it with a letter at the front from, say, Japan, and all of a sudden, same thing. It’s a little bit more, but not that much. But I wouldn’t want to go through pages.

40:14
Robert Chadwick
I agree.

40:16
Kyle Mazzuchin
So it appears that we have two questions from the same individual. Who pays for the appraisal? And what is the interest?

40:25
Robert Chadwick
So the appraisal is paid for by the borrower. And again, it makes sense. All the appraisals in the U.S. are done by a third party. It’s all handled by AMCs, appraisal management companies. They bill you directly. Never is there ever any money sent directly to us. Everything is either done through a third-party escrow or a vendor-like appraisal management company. So you’d be responsible for paying the appraisal, but that’s the only cost that you would have out of pocket initially when the transaction occurs. As for the interest, it’s reliant on a variety of things. How you qualify, whether you’re going to qualify just off of the cash-flow property, you want to qualify by providing an income letter. You’re a U.S. citizen, you’re a foreign national, it’s based on your loan to value.

41:28
Robert Chadwick
There’s a wide range of what the interest rate is, but what’s so fantastic about that is if you want a lower rate, you just comply with whatever the requirements are on our program. If you’re not so rate-conscious because you want to buy a property now before interest rates go down and property values go up, then you take it at the most favorable terms for you, but maybe at a higher rate, and then you just refinance down the road.

41:57
Kyle Mazzuchin
Excellent. So hopefully that answers your question. The next question is, does anything change if I have an LLC? I think went through that a little bit there. Nothing changes except for your guarantee and it’s on the title. So then also please get your proper tax advice either through the concierge tab on our website or by going to your cross-border account within your local jurisdiction. Next question. If I already own four properties in Canada, am I eligible to get financed from us? Is there a limit on properties owned?

42:36
Robert Chadwick
That is a super question. And before I answer that, if you look at the group chat in the webinar, you can see a link to book a meeting with Kyle directly. After this webinar, or even actually during the webinar, if you want to arrange something on his calendar, Kyle’s calendar is open very early, very late, as I can attest. You can arrange something directly through the chat. But to answer the question, there are no limits to the number of properties that foreign nationals can own in the U.S. What also makes this quite interesting there are no limits on the loan to value. So whether you want to buy one property or you want to buy hundreds of properties, you can still obtain the maximum amount of value depending on what you choose.

43:35
Robert Chadwick
In most cases, it’s 75%, but there are no restrictions on it. Again, I’m currently based in Singapore. Because all of our clients are global, we try to make sure that our loan officers are also global and understand the market. But countries like Singapore, for example, have a variety of cooling measures, which makes absolute sense when you’re talking about a small country and high real estate prices. Or as you’ve seen in Canada, Kyle, the real estate prices are going through the roof. People are more affluent, but also a lot of foreign investors are coming in, and so they need to put certain restrictions. The U.S. is a free market society. They’re a free market when it comes to real estate. They’re not going to put restrictions on seeing properties appreciate, seeing rents appreciate.

44:37
Robert Chadwick
in certain states, there may be rent control and so forth, but don’t buy in there. You have 50 states to choose from. You have hundreds of cities. Find something that works for you and then buy that. Again, Kyle, you can translate into Canadian for me, but it’s unlimited.

44:57
Kyle Mazzuchin
Foreign buyers ban, guys, Canada, we got the ban now extended for another two years. To Robert’s point, free market over control. We don’t need to get into any further examples of that. So thank you very much, Robert, for that answer. A couple of other questions on a follow-up here. What are the fees that we charge and what are the rates of the current fees?

45:23
Robert Chadwick
we charge a very standard market rate of 2% of the loan transaction that is only paid at closing. If for whatever reason, you don’t fall into that 97%, you wouldn’t have to pay anything except for maybe the cost of the appraisal for the transaction. But you own that appraisal. We don’t own that appraisal. It’s yours. It’s very standard across the U.S. Interest rates for foreign nationals. I think the easiest way to figure it out is about 1% higher than what a U.S. citizen would pay if they were buying an investment property. Again, it’s dependent on the loan to value how you qualify, and so forth. But I think right now if you’re looking at rates in the eight, sometimes in the sevens, it’s still fantastic.

46:22
Robert Chadwick
We’ve been pushing this narrative for a while, and not to kind of go on a tangent, but interest rates will come down. In my personal opinion almost 30 years of mortgage lending, as we get closer to the election, will be used as a tool to boost the economy and confidence and so forth. It’s important to buy now. Once these rates come down, all of these people who have been sitting on these low-interest rates, owner-occupied properties that have wanted to upgrade, or all these people who have been waiting to buy their owner-occupied are just sitting on the sidelines. As soon as rates go down, property value is going to skyrocket again. And if you buy before that, you’re going to immediately see that and refinance later.

47:15
Kyle Mazzuchin
Yes. So speaking of skyrocketing, if you’re in Houston, you may have a problem near NASA, near Cape Canaveral in Florida. If the values are there, the rockets are going up, too. So take advantage if you can. Some other questions here. So, is there any prepayment penalty?

47:32
Robert Chadwick
Yeah, it’s a good question. It’s asked all the time. It makes sense, you would be concerned about it. On most investment properties, there’s anywhere from a three-year to a five-year prepayment penalty. This can be reduced, it can be bought down, so you can pay a fee to the lender to reduce it. I think when you talk to your loan officer, the most important thing is to just have clarity on what are you going to do with this property. I’m going to hold it for ten years. And really, the prepayment penalty doesn’t matter. If you’re going to hold it for a couple of years, then you structure it that way. And again, that’s what makes us good at what we do. And Kyle is fantastic.

48:18
Robert Chadwick
taking all the particulars of a client and finding out exactly what they want to do not just today, but what they want to do in the future with their investment property. We’re here for your journey, not just this one transaction. So certainly, there is a prepayment penalty. There are ways to mitigate it. There are options to even remove the prepayment penalty. But it’s important to look at what the process is and how you want to handle the property now and in the future.

48:47
Kyle Mazzuchin
Definitely. To our viewers, holistic conversations are critical to making sure that we understand your future and what your investments are going to look like. I’m not putting the bank hand at all, by any means. I’m just using our experience as an organization and a relative experience to emphasize the confidence that we need to ask, what does the future look like for you when going through these transactions, then we’ll provide you with the best avenue possible to, bankers term, mitigate what the future would look like for the customers. A couple more questions here. How about restaurant businesses with the property? The rent is 14 grand, asking price of two million. How do we calculate it?

49:37
Robert Chadwick
Kyle, you’re generating some great questions. This is something we’ve received many times, not just in restaurants, but gas stations seem to be a very keen thing to acquire. Unfortunately, we only do real estate lending. So if you want to buy a restaurant, it’s possible to be able to lend on that building that that restaurant is in. But being able to provide a business loan to purchase that restaurant, some options are probably out there. It’s just not something that we deal with.

50:14
Kyle Mazzuchin
Excellent. Another question. Can you get a mortgage in a U.S. C Corp?

50:22
Robert Chadwick
yes, not the mortgage. You can hold the title in a C Corp if that’s what you choose. Kyle had stated this a few times. It’s important to talk to your accountant and see what’s the best structure. When you say, can you get a mortgage in a C Corp? the mortgage itself is given to the individual. So whoever the borrower is, that’s actually who has the mortgage. How the title of the property is held, is what can be in an entity. So again, if you don’t have a CPA, we have an awesome CPA that we use regularly that much like us has expertise in foreign nationals and U.S. expats.

51:13
Robert Chadwick
So if you want the referral, you can go to our website and go to our concierge page, or you can message or email Kyle directly, and he can give you the CPA’s contact.

51:23
Kyle Mazzuchin
or even WhatsApp.

51:26
Robert Chadwick
Yes, exactly.

51:29
Kyle Mazzuchin
Any sort of tool. We got four more on the go here down the list. What are our commercial mortgage rates and how many basis points over the ten-year treasury?

51:43
Robert Chadwick
Again, good question. We do have a commercial loan specialist on duty. He spent ten years doing commercial mortgages at Wells Fargo. American citizen, living in Asia, super knowledgeable. I would suggest after this webinar, you reach out to Kyle or reach out to our company, and we’re happy to put you in touch with Nick. Again, I probably should know this right off, but I don’t. I apologize. And again, that’s the great thing. You have a question about Canada, how you structure it as a Canadian, you have a question about somebody in Europe, somebody in Asia. We have people all over the world, and that’s what makes us unique and makes us quite successful.

52:36
Kyle Mazzuchin
Good. Not answering your question, but we’ll be able to do it with some of the other individuals who are on our staff there. Another question here. So what is the maximum loan-to-value a Canadian can get on a DCR loan, Cash out refinance for two units or more?

52:56
Robert Chadwick
So if you’re looking to cash-out, you should be able to get 70%, assuming that the rents are sufficient to cover the debt servicing.

53:10
Kyle Mazzuchin
Excellent. Next question. Does approval guarantee funds release? How reliable is it by itself and is it binding?

53:20
Robert Chadwick
Very good question. The initial approval letter that we receive or that we give to you after you provide us with all your documents is a pre-approval letter, meaning that we’ve gone through the process, we’ve put you into underwriting. The underwriter says, okay, based on what they provided, this loan will go through. Now, like anything in the world, there are always things that come up. Maybe there’s a question that they have on your bank statement. Maybe there’s a question about the property. So there is never a guarantee until the actual loan is funded. But if you go to the fact that we close 97% of our transactions, I think you’ve got a pretty good assurance of the loan funding.

54:12
Robert Chadwick
But again, working with experts like Kyle and the rest of the America Mortgages teams, the issues that many foreign nationals expats come into when they deal with a foreign bank or a local broker or some broker that they contact in the U.S., you’re likely not going to have with us. I’ll put it in an analogy. If you’re going to get your Volkswagen repaired, you’re not going to go to a Toyota dealer. Yeah, probably it’s a car. They’re going to be able to fix it. They know they work on cars every day, but they don’t work on Volkswagens every day. So it’s the same thing with a mortgage. Why would you go to obtain a foreign national mortgage from somebody who maybe sees 1 out of 100? Again, this is all we do.

55:08
Robert Chadwick
Sorry, going on a little bit of a tangent, but to answer your question, there’s no guarantee of funds release. But with a 97% close rate, I think you’ve got a really good team behind you and good assurance that it will fund.

55:25
Kyle Mazzuchin
Awesome. Thank you very much for putting that answer together. I think we’re down to the last two. Is it possible to know the approximate mortgage interest and brokerage fees I can expect when closing a mortgage with you in this market?

55:42
Robert Chadwick
So we answered that a little bit with another question. We charge the very standard 2% of the loan amount on a transaction. What makes the U.S. very transparent? And Kyle had sort of covered this in the very beginning. When you apply for a mortgage, within three days, you receive mortgage disclosures. Those mortgage disclosures break down all the costs of that loan. When you see this and you read this, if you’re comfortable with it, certainly the loan officer will go over it with you if you have questions. You acknowledge that. Okay, I understand this and this is okay. But the most important thing is when you go to sign your mortgage at closing, you’re not going to say like, “What the hell, Kyle? You told me it was x and now it’s y.” That absolutely won’t happen.

56:38
Robert Chadwick
The final figure, the final number has to be at the number that you agree to or below. When it comes to closing costs, it’s super transparent. When it comes to interest rates, I think probably the easiest way to calculate it is to look at what a U.S. citizen’s investment rate is and add about 1% to that, and that’ll give you a range. So I think right now we’re looking at in the eights and sometimes the high sevens. But with long amortizations, fixed interest only, it makes sense even at higher interest rates. And if the numbers work out, especially when you’re talking about the rental coverage loan, then it shouldn’t always be about the rate. It should be more about what am I buying this property at and what kind of yield can I get.

57:30
Kyle Mazzuchin
So, to answer in another way as well, holistic conversations are important. What’s most important to you? How are you holding in the asset? So, having these conversations during our calls is very important. And then the last question. If you have a good Canadian credit rating of more than 800, can you use that to qualify for better mortgage rates in the United States?

57:56
Robert Chadwick
Another good question. No. To make it Canadian, all we want to see is that you’re able to manage and you’re responsible for credit. And whether it’s your Canadian credit or credit in the UK or credit in Hong Kong, the most important thing for us is we look, are there defaults, are there foreclosures, are there bankruptcies? But the score, because they range depending on which country you’re in, unfortunately, and maybe it should be and maybe it will be considered in the future, but doesn’t impact the rate. The rate is determined really by the loan to value and how you qualify.

58:45
Kyle Mazzuchin
Excellent. So that’s all of our questions so far. Maybe we’ll just take a look in the chat here, and see if there are any comments. No comments there, but to look at other pieces. So everybody, my link, if you would like to book an appointment, is currently in the chat. Please copy and paste it or click on it. And then you can pick a time where you’re able to pick a time to speak with me as the VP of Canadian markets. I’m local to your time zone within four and a half, from Tofino, British Columbia to St. John’s, Newfoundland. And if you live anywhere near the North Pole, you can’t get a mortgage on an igloo. Then obviously, you can just go to our website as well.

59:32
Kyle Mazzuchin
We do have other languages as well, from Spanish to many other languages on our team, so we’ll be able to assist. We do have another Canadian living in Alberta as well on our team, so we can translate the American ease to Canadian ease in terms of that. Also, we do have another announcement to make. We do have another webinar in three weeks pertaining to property management. So we’re very excited about that. Hopefully, you all have found this to be an informative discussion. And thank you all very much for taking time out of your busy day. I know on the Pacific side, 4:30 to 5:30, everyone’s planning to go home. And on the east coast of Canada, we’re looking at about 7:30 to 8:30. So hopefully you found this to be informative.

01:00:32
Kyle Mazzuchin
If you’re interested in our mortgages, reach out to me, at [email protected]. Reach out to me at 778-838-9654. If you want to talk to Robert directly, he’s also readily available. Probably not many other companies have access to any of our senior leaders, so please be able to do that. Oh, looks like we have a couple more questions coming in., if you have an ITIN score, does it get you better rates?

01:01:01
Robert Chadwick
It could. Not only could it get you better rates, it might even be able to get you a higher loan to value. So I think that’s something that you discuss with the loan officers, depending on the programs that you choose.

01:01:17
Kyle Mazzuchin
And then our last question that just came in, can we get a copy of today’s presentation?

01:01:22
Robert Chadwick
Yes. Well, this webinar will probably be available post-editing in maybe a week, and it will get sent out to everybody who had joined and also people who maybe had joined that weren’t able to attend the meeting. But it’s also on our website, so it’ll be loaded onto the website. You can find it on our YouTube channel. There’s a variety of ways to see it. But not just this webinar. We’ve done about 100 webinars. So whether you want to learn about taxes, immigration, EB-5, mortgage financing for commercial properties, or whatever it may be, you’ll probably be able to find that webinar.

01:02:13
Kyle Mazzuchin
Very cool. And then also, our first Canadian webinar for American investing. It’s the first. So, very proud, as the second largest investment country to the U.S. We’re now over. So thank you all very much for your time. Please again, contact us at www.americamortgages.com, [email protected], or 778-838-9654. Thank you all very much and have a wonderful evening.

01:02:45
Robert Chadwick
Thank you, everyone. Thank you, Kyle, for having me

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Disclaimer: This transcript is AI-generated, so kindly pardon any transcription or grammatical errors that may be present.

00:17
Donald Klip
Hello everybody, my name is Donald Klip, co-founder of America Mortgages and Global Mortgage Group. We are the only us mortgage provider outside of the USA, focusing only on non-residents who are foreign nationals and U.S. expats living overseas. We’re super excited to have a conversation with our next guests. But before I introduce you, we’re going to be talking about their journey on U.S. real estate investing. We’ve been talking about the benefits of U.S. real estate investing for many years now, but once you hear it from an actual practitioner who quit their job and is doing this full-time, the story is much more interesting.

01:04
Donald Klip
Now stay till the end of the webinar where I will talk about our loan programs and we will open it up for Q&A so you can ask questions about anything U.S. real estate related, investing strategies, the market, and of course our loan programs. So, please stay till the end. So with that said, Han Teo, Tracy Pah.

01:27
Tracy Pah
Hi everyone, I’m Tracy. Together with Han, we are so excited to be here with America Mortgages and Donald. So just a little quick intro about ourselves. Han and I are Singaporeans. We were born in Singapore, grew up in Singapore, and studied in Singapore. We are full-fledged Singaporeans. We have always wanted to achieve financial freedom, but it’s very difficult to do so with Singapore properties due to the very high cost. So we started to research all over the world where it would possibly make the most sense. I will share with you the juicy bits later. But we decided that our properties made the most sense and therefore we dove into this journey to collect more and more cash-flowing rental properties to reach our financial freedom. Han, do you want to say a few words?

02:20
Han Teo
First and foremost, we are very thankful to America Mortgages, Donald, and the team for inviting us to allow to share on this platform. We also thank all of you here for your time to participate despite your busy schedule. I hope our sharing today can add value and offer you a very different, viable alternative way to grow your wealth and achieve financial freedom. So, without further ado, let me get started. Take a look at the slides here. We’re Han and Tracy. We are co-founders and co-hosts of Byte Sized investments. We are the only education and consulting company teaching international real estate investors to buy U.S. cash-flowing rental properties.

03:07
Han Teo
Both of us came from average-salary jobs but managed to quit our nine-to-five, all thanks to our portfolio of U.S. cash-flowing rental properties, as you can see in the slides. We own chopped properties at the moment, almost all are bought remotely from Singapore. So, a little bit more about ourselves. I came from a low-income family. My dad was a taxi driver, and my mom was a bookkeeper. It was tough growing up because my family didn’t have much. I had half the pocket money compared to my peers in school, and I had to learn how to stretch my dollars. So at work, I had to endure 24-hour shifts on weekends, and after the shift work, like on Monday, without any break, continued my nine-to-five jobs.

03:52
Han Teo
life was really tough, and I realized that I was working hard for money and not the other way around. And I neglected my family and friends and did not enjoy it. So this motivated me to find out more meaning in life and to find financial freedom.

04:10
Tracy Pah
For myself, unlike Han, I grew up in an upper-middle-class family. But because we didn’t need to worry so much about money, I grew up following the system. I called the system the conventional way that people think life should be, which is to go to school, find a field of study that ensures good employability, get good grades, get a good job, find a stable job, and stay there until you retire. And in the Chinese context, they call it the iron rice bowl. So people think that once you get an iron rice bowl job, you’re set for life. So I would say I was very fortunate that I managed to do my postgraduate studies in the U.S., and I was there with my sister.

04:52
Tracy Pah
So while we spent that one and a half years just touring around the U.S. with not a care in the world, we cared a little bit about our studies. We passed. But I think that was the first taste of freedom that I ever felt, to have freedom of my time, to do what I love without having to report five days a week to the office. So I just want to highlight that Han and I, both of us, have no background in finance or real estate. Han was a physics major, and I was from electrical engineering. So when I came back from the U.S., I told Han, “I know you always talk about financial freedom. I also want to have freedom of my time. What should I do?”

05:32
Tracy Pah
He recommended two books to me, Robert Kiyosaki’s Rich Dad, Poor Dad, and also this one, Cashflow Quadrant. I went to read them and oh my God, my mind was blown. Like, where has this book been all my life? It is just crazy, and enlightening. So Robert Kiyosaki talks a lot about achieving financial freedom through real estate. But more importantly, I think this book changes your mindset about how you think about money, life, employment, being a business owner, being an investor. And for someone like me, who grew up being told by my parents that debt is bad, stay away from debt your whole life, this book taught me how debt can be good, like how debt can earn you more money and accelerate your progress towards financial freedom.

06:24
Tracy Pah
And by the way, America Mortgages gave us a lot of good debt to scale on our journey. We’ll share some real examples later. So, what is financial freedom? Financial freedom is where your passive income is more than your living expenses. So what is passive income? Passive income is money that comes into your bank without you needing to spend time at a job. For example, rental income. Every month your tenant pays you the rent even though you don’t need to report five days a week, eight and a half hours a day at a job. So, that’s called passive income. So once all this passive income covers whatever you spend on, your food, your insurance, and your transport, then you don’t need to spend time on the job anymore. You don’t need the job anymore. And that’s when you achieve financial freedom.

07:10
Tracy Pah
And let me show you what financial freedom has done for us. This is in no way to show off. I just want to motivate you guys and show you guys that it’s possible that just four years ago, Han and I were getting zero passive income and zero properties, and we didn’t even know where to start. And in just four years, right now, every month we collect about U.S. $15,000 in rent checks. That’s about S$20,000. Round of applause for us. But again, this is in no way to show off. I just want to show you it’s possible. As mentioned, we both came from average-salary jobs. So financial freedom allows us to turn our dreams into reality. With the passive income, we can travel.

07:58
Tracy Pah
We’re not limited to our 18 days of leave a year at a job anymore. We can travel for a few months, to different places. And all this time, our rental properties are still paying us while we travel. So in 2024, we’re going to do something new and exciting for us at least. If you look at the bottom right-hand corner, there is a van that we bought. We’re going to retrofit it into that sample picture on the right-hand corner so that we can travel and live in the van. Plus we installed two passenger seats so our family and friends, if they come along, can go for a ride. And to us, it’s a dream in the making. We have planned for this for so many years and now we finally achieved it because we have collected sufficient cash flowing rental property.

08:43
Tracy Pah
So, it turns your dream into reality. I know a lot of you will be thinking, why did we choose the U.S.? Don’t worry, I will share. But first, let’s let Han share some of our recent purchase numbers to show you what it’s like with U.S. properties.

09:00
Han Teo
Yeah, looking at the pictures, got my heart pumping quite faster and got me excited. And that’s the true meaning of life. So anyway, take a look at this picture. This is a three bed, one and a half bath, 1300 square foot single family home on a 5000 sqft land with nicely done up the interior, finishing as you can see on the picture on the In my country, such lent home would cost upward of a few million dollars. But this was how it looked like when we bought it. It was distressed, dilapidated, and ugly. But such ugly houses are opportunities for investors. Why is it an opportunity? Tracy will share with you later with some maps and charts. But now let’s take a look at the numbers.

09:53
Han Teo
we bought it for $142,000 and we spent $42,000 to fix it up. So our all-in cost is about $185,000. So we also know at the same time that the same type of properties around the area right nearby were selling for $230,000 when done up nicely. So what will happen to our property’s value when we get it fixed up nicely? It’s a no-brainer. It’s going to be at least in around the area of $230,000. But our all-in is o nly $185,000. So we made an instant $45,000 of paper gain. So at the same time, we rent it for $1800. Our net rental yield based on the 70% loan-to-value will be about 16.6%. Is that good or great? Let Tracy share with you more about what are the other qualities we see when we invest in U.S. real estate.

10:55
Tracy Pah
We share this so many times with our friends, but we’re still very excited every time we share. So, why the U.S.? We want to retire early. Our goal is financial freedom. We need assets that pay us, not the other way around. So why didn’t we invest in Singapore, our hometown? Let’s take a look at this. I’ll call it a fictitious Singapore condo. We’ll just call it N.ton park. So a one-bedroom costs about $1.2 million. The down payment is about $300,000. This is the kind of property that a lot of Singaporeans buy as an investment because one bedroom is the lowest price point to buy a condo unit. Now, your monthly mortgage payment will be about 4.2k, and the rent is about 3.5k.

11:42
Tracy Pah
So, the rent cannot even cover the mortgage. And this means that this is a negative cash-flowing property. And now you throw in property tax as well, and then even add in repairs, vacancies, appliances, and whatever. Every year, just based on the mortgage payment and the property tax, you are bleeding or you are paying the bank $13,000 a year instead of the property paying you. All right, this is called negative rental yield. So why is it negative? It’s because the property price is just so high. So, the mortgage payment is very high, and the rent just cannot cover the mortgage payment.

12:21
Tracy Pah
So the landlord, which is the investor, is working very hard to pay for the asset and hoping that it will appreciate enough to be able to sell it and make back, firstly, all that negative cash flow over the years, and secondly, to make a sizable profit out of it. It becomes, you buy, you pay every month, and then you hope that it appreciates, and then you make something out of it. And if you want to retire early on passive income, how many of these can you buy to quit your job and live off passive income? It is just impossible because everyone you buy has a negative cash flow. You’re never going to quit your job collecting properties with a negative cash flow.

13:04
Tracy Pah
You need to work to earn the income top-up, to pay the bank the extra for the mortgage. Now, let’s take a look at a typical us property that we buy. In the middle photo, there’s a house on sale. It’s about 180k, similar to the one Han shared. And then on the right, this house on the same street rents at about 1.8k a month. Do you realize that just two of these properties can fetch you about 3.5k of rent a month, which is the same as the Singapore N.ton park? So just two of the U.S. houses to fetch the same rent as the Singapore property. And how much would two of these us houses cost? It’s less than 400k.

13:50
Tracy Pah
180k times 2, 360k, compared to $1.2 million for N.ton park. So you spend a lot less when you use our properties versus Singapore properties where we are. In that sense, we are making our dollar work a lot harder for us. We’re getting more bang for our buck. And for Singapore investors, you may heard of asset progression. This is where you invest in the house that you live in. So you start with an HDB. And then you wait a few years, earn a bit of income, better appreciate your sale and then you upgrade to a bigger house, maybe a condo. And then after a while you sell and you just keep upgrading to build your net worth. But all this time, because you’re living in, it’s not giving you cash flow, you are working hard to pay the mortgage.

14:38
Tracy Pah
And as you upgrade to a more and more high class, you’re paying more and more mortgage and that keeps you locked in your job. And then after that, at the end of it, when you want to retire, you downgrade. So when you finally want to enjoy life, you downgrade. So this is not a strategy that you can use to retire early. Whereas for U.S. real estate, the cash flow, so every property you buy pays you, adds to your income and you can use this cash flow to fund your lifestyle. And that’s why you can retire early. On top of that, U.S. properties are freehold. So you just collect, collect. You hold them forever and then you can pass them down to your kids and even your kids’ kids.

15:20
Tracy Pah
It’s very common to see 100-year-old properties in the U.S. being done up very nicely and passed on and on for generations. Can you imagine what it would be like as a child if, by the time you graduate from school, your parents hand you 20 cash-flowing properties? I think life will be so much different for them. Another reason is that the U.S. also has an imperfect housing market. Let me show you what these kinds of opportunities are. So these are the sale transactions in a southern neighborhood in the U.S., you will see that some are sold very cheaply, like below 100k, whereas right next door the house can sell at 200k even though the house looks almost the same. Why?

16:05
Tracy Pah
Is it because of distressed sellers, distressed homes, like the one that Han showed you? the one that we bought, was distressed and needs a lot of renovation. And when houses need a lot of renovation, nobody wants to buy them. So the seller will just mark them for cheap. You go in as an investor, you buy them way below market value, put a bit of money, fix it up, and straight away the valuation jumps up to what it should be, what all the rest on the street are. This is called forced appreciation. So in Singapore, what investors do is they buy and they wait for years to happen, wait for market appreciation to occur. But in the U.S., we use forced appreciation even before you buy.

16:46
Tracy Pah
You already know how much it can be appraised after you fix it up. And we force up the appreciation. And in the U.S., information is very accessible. So it is very easy for you to find the sales around the area, the rents around the area. This creates opportunities for forced appreciation, our favorite kind of appreciation. And lastly, this is a very important point. Good debt. Good debt versus bad debt. The U.S. is the only place in the world where you can get 30 years fixed-rate mortgage. That means if the market rates go up, you don’t do anything. Keep your rate. If market rates go down, you can refinance down to the lower rate and then lock it in for 30 years.

17:28
Tracy Pah
So I think a lot of our fellow Singaporean friends, during the COVID time, after COVID-19 when interest rates started to go up, then they felt the pain of refinancing at a higher rate. But for the U.S., 30-year fixed rate, you don’t need to worry about rates going up. Rates go down, you refinance down. Rates go up, you just don’t do anything about it. And as investors, that’s so important because you reduce one variable in your long-term equation. Also, for the loans in the U.S., you don’t need to show your income. Why? You think about it. Why does your local banker ask for your income when you want to buy properties? It is because they know that the property’s rent cannot cover the mortgage to pay them back.

18:12
Tracy Pah
So therefore they want to know your income to top up the rent to be able to pay the mortgage. But because in the U.S., we have cash-flowing properties, the bank knows that the property can pay for the mortgage, plus the property taxes and insurance and what have you, and therefore they can approve loans without seeing your income. So linked to that, for the U.S. loans, we don’t have TDSR or MSR. This is the total debt service ratio, and mortgage service ratio. Because the loans are tagged to the property and not you. And because of that, you can take an unlimited number of loans. Imagine you want 1000 houses. As long as each of the 1000 houses can earn enough rent income to cover each of their loans, by all means, take 1000 loans. It’s not tied to your income.

19:00
Tracy Pah
And lastly, there is no age limit for taking loans in the U.S. This is due to the Fair Housing Act. So even if you are 99 years old, you can still take 30-year fixed-rate loans. So, how cool is that? So this is just a summary. I’m not going to go through everything, it’s just too much to talk about. But feel free to take pictures, and print screen the page. These are all the pros and cons of Singapore versus the U.S. I just want to highlight there are a few new things here. Like U.S. has higher rent demand which forces up rent growth. We’ll talk a little bit more about this later. There are no cooling measures like in Singapore where the government is trying to tell you, hey, stop investing in properties.

19:41
Tracy Pah
I’m going to slap all these measures on so you stop investing in properties. The U.S. on the other hand, is like, come and invest. I’m going to give you tax benefits, a lot of benefits for you to invest in properties. And lastly, a very powerful strategy that we use is you don’t need to sell your home to monetize the appreciation. There’s a way to take the money out without selling the home. I’ll let Han explain more about this.

20:10
Han Teo
So how do you sell your house without selling your house? So let me show you. Take a look at this four-bed, two-bath single-family home that we bought for $79,000 and we spent about $16,000 to renovate it. So the total capital investment was about $95,000. After we finished renovating, the property was appraised at $170,000. So obviously we gave a call to Donald and said, “Hey Donald, can you give me a loan?” And Donald said yes. And then he approved a 100k loan taking this property, as you can see in the slides, as collateral. So this is called cash-out refinance, where you go to a lender, take a new loan with the property as collateral, and put the cash into your pocket. You can do whatever you want with it.

20:59
Han Teo
So can you see what is happening over here? We paid $95,000 and then how much did we get back? We get back $100,000 as a loan. So did we pay for the property, or did we get paid for buying the property? So we got paid $5,000 to buy the property. And then when we realized this, it instantly blew our minds. It was a mindset change, and we now see things very differently. We got more cash than what we put in, and it’s still a cash flow cost that rent can cover the mortgage. And when we make investments, we talk about ROI. What is the ROI for this deal? Think about it. You take your returns, which is our monthly cash flow. And we divide by the amount we put in.

21:47
Han Teo
But in this case, if the amount we put in is zero, which is our denominator, what does it mean? Our return becomes infinite. Off the chart, it’s 10%, 20%? And everyone will say, I got 20, 30%. But then we got more than that. We got it off the chart. I don’t know, is it good or great? So anyway, we got the 100k from Donald, and what do we do with it? All right, we buy another property. We repeat the process over and over again. We use the cash-up money from the previous property as a down payment, and then we call Donald again, and say, “Hey, we need another loan to buy this property.” So, as you can see, we bought this property without a single new fund in.

22:37
Han Teo
So this is how we scale from zero to twelve properties, and we aim to repeat this every year, over and over again, and double and double our portfolio. So this is how you can sell your property, and monetize the appreciation without actually selling it. So then you can continue, collect your rent, enjoy future appreciation, and then, once it is appreciated enough, give Donald another call a few years down the road when the property appreciates. So one more thing I like to share with you. It’s called rent growth. We bought this three-bed, one-bath, single-family home for $90,000 in 2021. Our rent then was $921, and cash flow for $300 per month. This is very normal in the U.S.

23:26
Han Teo
Over the years, we managed to successfully push rent up from $900 to $1000 to $1003 to $1004. So this is very normal in the U.S., as Tracy has shared because inflation and capitalism are baked into daily life. The landlord does it, and the tenants accept it. So rent has been slowly growing forever, as you can see in the chart on the bottom right side. Whereas in places where it’s dominated by a lot of homeowners, let’s say like Singapore, rents sometimes can stay flat for a very long time, as you can see in the bottom left side. So to summarize, when we invest in the U.S., we invest, number one, for cash flow. But at the same time, we also enjoy appreciation and rent growth. So, I hope this gets you very excited about the potential here. And if you are excited, about how to get started, Tracy will share with you.

24:24
Tracy Pah
Do you want to get started? We can’t share everything in this short session, but we do have a free webinar coming up. The next one will be on January 31. It is over 2 hours long, so we will share a lot more information there. And there’s also open Q&A where you can ask us anything that you want. In our webinar, we will explain four core investing principles when you buy properties, no matter where in the world. The first one is how you avoid money pits, avoid properties that eat your money rather than pay you. The second one is how we buy properties for not only cash flow, not only appreciation but cash flow and appreciation. I invite you to join us at our free webinar. Then you can find out about the other two core investing principles.

25:08
Tracy Pah
you can scan the Q.R. code on the bottom left side. Anyway, feel free to take a snapshot of this page so that you can slowly scan the quotes later. And we also have a YouTube channel. It’s called Byte Sized Investments. Here is where we give a lot of free content. Feel free to subscribe and enjoy our free content. At the same time, we also have a remote cash flow rentals masterclass here. We jam-pack a lot of information as much as we can. So why did we start this master class? Because due to our very unique circumstances to invest from so far away, we did not know anybody else doing it. So we had no guide, nobody to follow, no role model.

25:48
Tracy Pah
So we spent years of blood, sweat, and tears building up all the processes, building up our teams over there. We think our properties are very powerful and it can be done from anywhere in the world. So we designed this course for international investors, and people outside the U.S. who want to start buying U.S. cash -flowing rental properties using proven data-driven methods to find these properties. So we will teach you things like how to pick markets, how to evaluate your rentals, who you need in your team, how to buy remotely, how to manage remotely, and even how to sell remotely. Plus, we also threw in some complimentary guides and free live group coaching sessions because it’s very important to form a community.

26:28
Tracy Pah
So we want to have these group coaching sessions for our graduates to be able to network with each other with like-minded individuals. So it’s everything you need to hit the ground and get running again. Feel free to print screen this page. Don’t hesitate to contact us on any of our social media or our email at [email protected]. You can ask us anything. We are very friendly. It’s time for our next exciting session. Remember how I spoke about good debt and the U.S. having fantastic loan benefits? So I shall end my shameless plugs here and stick around to the end for Q&A as I hand over to Donald now to talk about U.S. mortgages.

27:11
Donald Klip
Thank you very much, Tracy and Han. And by the way, I was just noticing that those properties you bought that were valued at $170,000 and 2020 must be much higher now. So it’s about time you call me to cash out again. I think so. Listen, I want to talk about a few things. So the strategy that Han and Tracy are using is called force appreciation. However, there are many different strategies in the U.S. to earn rental income. There are strategies where you buy, and where industries are moving to. A lot of that is Texas, Atlanta, Florida. There are strategies where you focus on university towns. So Han and Tracy are experts in a particular area. And I’m not going to tell you where it is because that’s in their seminar, but that’s what they’ve done.

28:06
Donald Klip
there are many different strategies, but they all involve using good debt, which I’m going to talk about now. Another thing I wanted to talk about is the rental market because this is important. After all, people don’t quite understand how can rental yields be so high. And it’s very simple. There is a lack of supply in the U.S., and that’s well documented. Everybody talks about it and everybody can feel it. And so the housing demand is growing. Supply is flat. So at the current mortgage rates, a lot of people can’t afford to buy, so they have to rent. And that’s why rental yields now in many states are 10% and they’re only going higher. And we can talk much more about this in Q&A. So I want to talk about our mortgage programs that are specifically designed for overseas borrowers.

29:10
Donald Klip
So I want to do a quick snapshot of the key points. One, U.S. credit, U.S. residency is not required. So this is the biggest myth that people have. They assume that, oh, I don’t have U. S. Credit. I don’t have a residency. I can’t get a mortgage. That’s not true. We accept your overseas income to qualify, we offer loans in all 50 states, and these loans can be closed in as fast as 30 to 45 days, which I guarantee you, if you went to a bank, first of all, you wouldn’t be able to get a bank loan. Normal bank loans, even for U.S. citizens, take months. Everything we offer is market interest rate and practices, except that we’re only focused on our international audience.

30:00
Donald Klip
Our loans allow you to purchase, allow you to refinance, and what Han does is cash out of the equity. These loans are a 30-year fixed, regardless of the borrower’s age, as Tracy mentioned. As a foreign national, you can borrow up to 75% of the home value, and for U.S. citizens, up to 80%, and you can sign the closing documents at your local embassy. Many of these foreign embassies already know us because so many of our clients are going to the embassies to sign the closing documents. And we have a phenomenal approval rating. We approve 97% of the loan applications that are submitted. Let’s talk about our four main loan programs. The first one is our most popular loan program, and this is what Tracy mentioned. We call this the AM rental coverage plus program.

31:01
Donald Klip
And what that means is that if the rental income of the property covers your mortgage payments, you qualify. No personal income is required, and of course, there’s no U.S. credit required or residency. And our loan amounts are from $150,000 to up to $3 million. Like all of our loans, they’re 30-year fixed. We have interest-only options available, and these can be closed in 30 to 45 days. I’m going to have a visual of this, of what I just said. Whereas if you’re expecting to receive $2,400 in rental income and your total mortgage payment is $2,400, you qualify. It’s as simple as that. And in a market where rental yields are going up, it’s becoming easier and easier to qualify. The next loan program is called AM Investor+. This is a standard loan program that uses your income to qualify.

32:01
Donald Klip
What makes us unique is we allow your foreign income. We don’t require tax returns, and you qualify using an income letter from your employer or your accountant. All of the other information is very standard. There’s no U.S. credit or residency required. The loan amount is $150,000 up to $3 million. Again, 30-year fixed. Interest-only options are available and up to 75% financing for a foreign national. So here’s a visual. This is a standard debt-to-income ratio of all banks and lenders in the U.S., which is if your income is $10,000, so 43% of that is $4,300. And if your total mortgage payment is $4,300 and your gross personal income is $10,000, you qualify. It’s as easy as that. The next program is targeted at U.S. citizens living overseas.

33:03
Donald Klip
Many U.S. citizens, start to work overseas and then they stay there for a very long time. And in their mind, I don’t think I can get a loan anymore. I’ve been out of the U.S. for so long, although I still file U.S. taxes. But yes, you can. So these loans are exactly like you would get in any bank in the U.S. You qualify on your tax returns, no U.S. residency is required. You have to have a U.S. credit score of 680 or above, which is very common for many people. And loan amounts, $150,000 up to $5 million for U.S. expats, and closing times, 30 to 45 days. The next visual is the same as the previous slide. The standard debt-to-income ratio of 43% of gross income. Now, this one I’m particularly excited about.

33:54
Donald Klip
We created this last year, and it’s one of our popular loan programs. So we noticed in our conversations that a typical journey and this was my journey as well. In Asia, your child gets into a school, and what you want to do is you want to buy a condo near the school because maybe you don’t want your child to live in the dorm too long. And when you go visit them, you don’t want to pay the high hotel prices. So you buy a condo and your son or daughter stays there. When you go to visit them, you stay there. Now, the trouble is, no bank in the U.S. will lend to a student because he has no income. And no, the allowance you give them doesn’t count. But, this loan program, this is what we do.

34:38
Donald Klip
As long as a student has an F1 visa, you qualify on the projected rental income of a comparable. And this allows you to help build the child’s U.S. credit at a later date. And again, all the other points are very similar. So here’s a visual. If the gross rental income of a similar property is, $2,400, and your total mortgage payment is $2,400, you qualify. And this is fantastic for families who want to buy homes for their kids while they’re going to university. Here’s our contact information. We are a U.S. headquartered firm. Our international headquarters is in Singapore. And that’s how we met Tracy and Han. But we have offices and representatives all over the world. We like to say we’re open 24/7, there’s our Q.R. code. Please scan it, take a screenshot, and download the information.

35:47
Donald Klip
We’re going to be around for a little longer, so I want to say a few housekeeping items. One, we’re going to open up the very soon, but the copy of this presentation and this video will be edited and sent to your emails in about a week. So, please look out for that. With that said, let’s open up for Q&A. I’m going to read the questions. Is it risky to buy properties remotely? Well, that’s one for Han and Tracy, because they do it.

36:37
Tracy Pah
Yeah, Han, you can talk about it.

36:41
Han Teo
Yeah, of course, it is risky to buy properties remotely. It’s just like, it’s risky to take a plane, it’s risky to cross the road. But I think eventually there are risks involved. But the question is, do you have the risk mitigation framework involved to mitigate the risk? We started this journey before we even bought it. We share with a lot of our close friends and families, so then obviously, everyone cares and loves us. So they will say all the risk that is coming, and we embrace all this sharing and concerns, like the typical, you buy ready, you cannot sell how? If you buy ready, then you cannot rent out how. All these kinds of questions.

37:24
Han Teo
But then we took time to slowly, one by one, address them and put in steps to mitigate. For example, if cannot sell how, the thing is, if we bought a place in a rural area, you drive half an hour or so, cannot see the next door, then there will be real challenges. But if you go to a place where it’s bustling, growing economy, thriving, people always come in, then when you put the house on the market and you want to sell it at a correct, attractive price, it will get sold very fast. Two, three weeks, or only one month at max. Then this is the type of market that we want to be in. So we go about addressing all the different risks.

38:09
Han Teo
There’s a lot of things involved, and that’s actually what we’re not a shameless plug or whatever, but that’s exactly what we share in our webinar, our course. We address all the risks. We ask people, what are the risks? They say, all of them, and then we have all the steps to mitigate the risk. So this is how we address the risk of buying properties remotely.

38:40
Tracy Pah
If I were to add, because like earlier, I shared U.S. information is very open. So it’s very easy for us to do a lot of research upfront to find out things from median income to crime rate to natural disasters. Risk identification is just about finding out the risk. Finding ways, you can first use to avoid the risk. If you can’t avoid it, how can you mitigate it? You can’t mitigate it, how can you ensure and protect against it? So it’s the same as project management anywhere. And that’s the kind of data we use to choose the right markets to ensure that we get a strong tenant population. We get a growing population and stuff like that. That’s how we mitigate the risk.

39:24
Donald Klip
Nothing in life is easy. I think if you sign up for their webinar, the journey won’t be easy. They’re very super friendly and very upbeat, but the journey, like any journey, is tough. And now they’ve got into a good routine and they feel more comfortable about doing these things. And you’re just talking about identifying markets. There’s so much information out there and the U.S. has something for everybody. They’ve got lower price units, higher price units. But if you think about capital appreciation, like Tracy said, we’ve all been lucky. Interest rates have been low, everything’s gone up. So have you been smart by doing? The rising tide lifts all boats. But capital appreciation is a hope. Rental income is math. If the numbers work, that’s how you do it.

40:27
Donald Klip
So that’s kind of what I wanted to say about that. What drives property prices are just a few things. It’s population growth. That means are people moving to that city and why? That could be a university, it could be a new car manufacturing plant. So those are things you need to research. Another factor is schooling. And does it have good schools? If I can’t afford to live in California, I looked at the cost of living in Texas or Ohio or Michigan, and the first thing I’m going to do, like we all would, crime rate in that city and, the best high schools in that city. So these are some of the things that, if you think about it as a business, if you were opening a restaurant, you’d have the same thought process.

41:16
Donald Klip
So that’s kind of the mindset. And the U.S. has tons of information. Okay, next question. Hi, Han and Tracy. How do you manage the properties from Singapore?

41:29
Tracy Pah
So in U.S., I’m not sure if you’re from Singapore, but I know in Singapore, there is no such culture as a property manager. So in Singapore, I think the real estate agent acts as the property manager. This means they are the ones that handle communications with your tenant and stuff like that. But in U.S. property management, I think it’s the same for some other countries. U.K., Australia. Property management is a profession where they need to be qualified. Property management companies are set up solely to manage properties for investors.

42:03
Tracy Pah
So they do everything for you, from getting it turned, doing the repairs, doing the leasing, screening your tenants, putting the tenants in, getting the lease signed, collecting your rent every month, sending it to your bank account every month, and then collating the bank statements for you every month, every year, so you can check. So I guess, for starters, that is the best way to say how to manage your overseas properties. Find a good property manager, one that you can vibe with, one that you can trust, and then get them to manage the properties for you. Normally, it varies from state to state. It could be 8% to 10% or 8% – 12% of your rent every month to them, but they are your hands and legs. And us being in a twelve-hour time zone difference, we don’t want tenants to be calling us during their day, which is our middle of the night, to say, “Hey, the toilet bowl is broken”, “Hey, my shower water won’t come out.” We don’t want to handle all these things. So, having a property manager can help you handle everything on the ground. All you need to do every month is to collect rent and also check your monthly statements. Just make sure they got everything correct in there.

43:12
Donald Klip
Yeah, I can add to that a little bit as well. Even if you get a handyman who comes to your house to hang paintings or fix something, you may not like the job they’ve done. So you get another guy. So it’s like having your own business or a restaurant. Like, if you have a chef, you have a waiter, you have some other stuff, those components are your team. They’re your staff, almost. And it takes a while. You never get it right the first time. Maybe you do. Those are components of being a real estate investor. We actually have property managers as partners that we can introduce you to. Han and Tracy have one that they’re comfortable with. So this is a trial and error process.

44:03
Han Teo
I would like to jump in on this question also. I would want to share that most of us, like what Tracy said in Singapore, there’s no such thing as a property manager. But when we invest in the U.S., because we’re riding on their existing infrastructure, the U.S. is very big. If I live in California, I don’t only invest in California. I, as a U.S. citizen, have the option to also maybe buy in Florida or buy in New York or buy in Michigan. For a California investor, they don’t fly over there to do it. They use existing property management companies to manage their property. This is a known infrastructure for the locals to ride on. What they do is out-of-state investing like that.

44:57
Han Teo
So then what we do is we’re just taking this way of investing and we put a steroid, take it 12 hours time zone apart and maybe 10,000 miles apart. We are just riding the same infrastructure and then using the property management. So it’s not something thats new that you have to go there and reinvent the wheel and to teach and to come up with all the processes. You just go there, find, go shop for it, find, interview, vet them, and use them. Like them? Continue using them. Don’t like them? Change. That’s all. I just want to say it’s not something new and innovative. It has been here for many years already.

45:37
Donald Klip
I’m going to jump around to some of the easy questions to answer and then go to the longer ones. Can a non-U.S. citizen buy real estate in the U.S.? Are you both a citizen? They’re both Singaporeans. And again, this is sort of the common misperception. Did you know that over the last ten years, foreign nationals have purchased, on average, $100 billion worth of real estate each year? Let me say that again. Non-U.S. citizens have purchased, on average, $100 billion right. So, yes, the U.S. is a free country. Anybody can buy it. Tracy, unless something’s changed since the last time we spoke, I’m assuming they’re still Singaporean.

46:32
Han Teo
Yeah, we are pure Singaporeans. One passport only.

46:39
Donald Klip
Do you have to go back to the U.S. to open a bank account? No, there are services let you open a bank account remotely, especially if you’re going to set up an LLC. Yes, there are banks will allow you to open the bank accounts remotely. I think it’s best to contact us, and we can kind of go through some of those options. How long is the pre-approval letter for? That’s a really good question. A pre-approval letter is basically a letter by the lender that says based on the information that you’ve given, you’re pre-approved. So when you use that to go look for a house and you show that to your realtor, listen I’ve been pre-approved and they’re like ok and once you find the house and you’re in contract, then we can start the loan process.

47:28
Donald Klip
A pre-approval is usually good for about three months unless the borrower’s financial situation changes or other situations. As an expat, I don’t receive a W2. Does that impact the rate? No. These U.S. expat loans are exactly like if you were going to a bank in the U.S. Now the question is the bank in the U.S. going to spend the time to help you? Because it’s a complicated situation. But the answer is no because you’re working overseas. Why would you have a W2? Unless you work for a U.S. company and that’s kind of their policy, so it doesn’t affect the rate.

48:20
Donald Klip
Let’s see, can you rent the property out to your children and still take advantage of the tax advantages?

48:26
Donald Klip
Yes, and we refer our clients to tax accountants that specifically help overseas borrowers and foreign nationals. And again, I can’t even tell you how many strategies the U.S. has to make your life easier to be a property investor. You can set up an LLC, put the properties in the LLC, which we can get into the pros and cons, but you can deduct a lot of expenses in the LLC because now you’re in the business of earning rental income. So as a business, you need to go fly there to see your income-generating asset. So there’s a lot a lot of tips and strategies.

49:15
Donald Klip
The next one is the interest rate for all four packages; I mean these things are moving around quite a bit. I would say they’re probably high 7 to 8, but it really depends on LTV and loan amounts. But those are 30-year fixes. They’ve come down. So, just to give you an example, if you’re a U.S. citizen with perfect credit, twelve months pay stubb work in the same company for 20 years in the U.S., it’s 7% for a U.S. citizen. And with an incredible amount of underwriting, they go through your credit card statements, and it’s painful. Ours, not much more than that, and very little documentation because it’s based on the income of the property.

50:03
Donald Klip
This seems too easy. What’s the catch? Actually, nothing is easy in life. Tracy and Han are just very optimistic people. Like any start-up, it’s tough. But it only gets easier because you make some mistakes. You learn. So, U.S. Citizen, living overseas for 20 years plus, no U.S. credit anymore. Which program would you apply for? It depends, actually.

50:32
Donald Klip
You know, you may have credit that you don’t even know. I’m a U.S. citizen. I’ve been away for a very long time. And I was even surprised I still had credit. So it’s best you speak to our loan officer. We can kind of talk about which program is best for you. I’ll reach out to you directly to kind of answer those questions.

50:57
Donald Klip
What are the current interest rates for the first loan program? It’s about 8% for a 30-year fixed. And as a U.S. real estate investor, I think the focus isn’t about the rate, it’s about the profit. If you can get 12, if you can borrow at 8 and get 12, you make 4. Okay, fine. It’s not as good as if you can borrow at 2 and make 12. But you know what?

58:27
Donald Klip
You’re getting a 12% rental yield. You know what happens next year, like Han’s slide, oh, my rent is coming up. What’s my new rent? Oh, well, it’s no longer $1500. It’s $2000. And you know what happens a year from now? Interest rates go from 7 to 6. And so you refinance again at 30 years at 6. So now you’ve gone from a 15% yield to 6. So, you’re now net 9. So it’s all about making the numbers work. Sorry, to answer your question, it’s about 8%, give or take. 30-year fixed for 75% loan to value.

52:06
Donald Klip
Wonderful presentation.

52:07
Han Teo
For now. Interest rate moves. Yeah, if the interest rate moves, then it could be better.

52:14
Tracy Pah
Maybe I want to chip in a small one on this. I agree totally with what Donald is saying. We shouldn’t only look at interest rates alone, because a lot of our friends tell us, hey, the interest rate is so high in the U.S., not a good time to buy. But I can tell you from our real experience, right during COVID, when interest rates were very low, the competition was crazy because everybody was buying and all the properties were selling overvaluation. So what happens if you bought during the low-interest rate time, you have been stuck buying I mean overpaying for your property just to get that low rate. But ever since interest rates have gone up, we found it so much easier to get undervalued properties.

52:57
Tracy Pah
Just two months ago, we closed on our last deal and we got it more than $50k undervalued. Even with the 8% interest rate, because we got it so much undervalue, the mortgage payment is much lower and the deal still makes us about 9% cash-on-cash return. So you got to calculate the numbers and look at it as a whole. As people say, Singapore’s interest rate is very low. Last time during COVID was what, 1%, 2%. But the property price is so high that even 1% is a lot. It’s the price-to-rent ratio, Because the U.S. has a very, I’ll call it high rent-to-price ratio, means the rent divided by your price is high. Your rent is higher compared to your price.

53:39
Tracy Pah
So even with the high-interest rates, because of the low property price and the relative higher rents, as long as it can cover your cash flow, just like what Donald said, you lock in the house first at an undervalued price, interest rates can change. It’s called marry the property and date the rate. Interest rates can change. When interest rates change, then you refinance now, but you have already locked in the property at undervalue. So I think this is a very common question we get about high interest rates being a bad time to buy. So I just wanted to share our personal experience. That is actually a very good time.

54:16
Donald Klip
One thing I’d like to add to that is, ok so if you think about the supply of all homes transacted, about 90-ish% are existing homes. So if you google existing home sales, did you know that 80% of those who have a mortgage have it under 5% and 40% have it under 3%? Now the way to look at it is like, oh my God, you know I wish I was one of those guys. But, if you think about it, if you need to sell your property now, you need money because if you want to buy another one, the interest rate is much higher. And new home sales.

55:02
Donald Klip
If I’m a developer, I’m like, well, I don’t know if I want to launch a thousand homes in you know Texas because, at the current interest rates, nobody can afford to buy my homes. So they’ve slowed down, and it’s turned into a situation where, like Tracy said, if somebody’s selling, you have pricing power. So it’s all these quirks about the market at the moment that make it a really good time because it’s all about making the numbers work. Listen, I’m going to quickly go through some of these questions because there’s a lot. I’m a U.S. citizen for many reasons, gone ahead and purchased a home, tenanted with cash. Can you cash out… well, that’s exactly what Han does. So the answer is yes. For the AM rental coverage, how do you calculate projected rental income? Well, that comes in the appraisal.

55:56
Donald Klip
So every home purchase, and every mortgage in the U.S., we have to order an independent appraisal, which will do a value of the home and a rental comp. I already have bought and renovated the property, and it is rented. Can I get a refinance? Yes. Which is also what Han and Tracy do. So you buy a home today for $100,000. Well, let’s just say $200,000. And then interest rates go down. Next year, there’ll probably be $250,000. Then you refinance at $250,000. I’m going to give you another mind-blowing statistic. If I were to say on average 50 states, all property prices are transacted. If I were to tell you that, on average, property prices in the U.S. were up 5% nationally, you wouldn’t believe me, but that’s a fact. And that’s mind-boggling. And it’s part of this; there’s just a lack of supply.

57:08
Donald Klip
And that’s on average in some parts of America. We had a lady talking about Irvine property, up 20% last year, and parts of Dallas up 20%. So property prices are still going up, even though interest rates are high. Now, what do you think is going to happen when interest rates start to come down? So, we all know the answer to that. Who pays the brokerage fee? So, it’s standard. You go to the U.S., everything we do is U.S. standard. The Borrower pays the broker fee. And it’s on your closing statement. So it’s super transparent, it’s super regulated. There’s a line item on the closing statement that says broker fee. Han, you’re based in which city in the U.S.? What is the profile of the tenant in your property? I don’t know. That might be part of their secret sauce. You might have to sign up for that one.

58:08
Han Teo
Yeah, exactly. Donald, thanks for helping me take the bullet for this. So we are doing education and coaching for our students. We do have a framework, so we are not focused on only one city. We have a framework of criteria to go through. So it’s actually not one city, but many cities.

58:26
Donald Klip
Can we say Midwest? Midwest yea? Can we say that?

58:31
Han Teo
Actually, I will make it even easier. It’s placed where there is a high rent-to-price ratio. So when you invest, then you get more bang for your buck, for your rent. So it’s not your gateway cities. These are the things I’ll say. For tenants, we usually go for middle-class tenants, we try to avoid the low-income and the highest income. Because when you take the demographics chart, you want right smack in the middle. Because we want just one cookie cutter type of people that go to work nine to five, pay their rent, get their income, all these things. So we don’t want it too exciting on both ends. We want people right in the middle where we get the highest volume and highest population. Anything you want to add, Tracy?

59:25
Tracy Pah
Yeah, maybe I’ll chip in that in the U.S., every state has different laws for tenants and landlords. So first thing you need to do is obviously you need to ensure wherever you invest, your laws are friendly to you as a landlord right. So don’t go for a high, don’t go for where you like to go as a tourist. Really do it with data-driven research. And then after that, we mentioned around the midwest, around the south, I mean these are generally where we see there is a good rent-to-price ratio. So there are just too many cities that can work. In our class, we teach you how to find it so that you can choose the city that best meets your individual goals. Because some people are like, okay, I don’t mind more vacancy, but I just want a lower cost property.

01:00:12
Tracy Pah
Some people are like, I want it to be as hands-off as possible. I want the best tenants in. I don’t mind a lower cash flow, I pay a bit more. So it depends on what is your personal investment goal, and this is the principles we teach, which is to allow you to choose the right city. We just can’t circle. It’s just different for everybody.

01:00:34
Donald Klip
Wow, there’s a lot of questions. Let me get through some of these. This is really important. So what you offer is very unique. How do we make money? Banks don’t do these loans. I assume there’s a risk premium. So there’s a common misperception that if you need a mortgage, you go to a bank. Of course. But did you know that in the U.S., 70% of all mortgages are through wholesale lenders, not banks? So the JPMorgan, the Chase, the Wells Fargo, those are only 30%. Those guys are focused on U.S. citizens, primary residents based on income for the things that Tracy said, because those are regulated loans, they’re heavily documented and they have a subsidized rate to promote these primary residents. Because they’re wholesale lenders, they have to use a mortgage broker interface.

01:01:41
Donald Klip
So if you go to the U.S., 100% you would have to use a mortgage broker, which is us. So what we offer is exactly the same as you would find at a mortgage broker in the U.S. Except. the difference is that the type of client that you are is all we do. And so we understand the nuances of international borrowers. And the mortgage broker in the U.S., you’re like 1% of what he does. So he may not even be motivated or understand your type of borrower situation. Is there a risk premium? I’m not sure how to answer that. Classic mortgages, you would never be able to get anyway because you’re not a U.S. citizen. You’re not there, you don’t have W2 pay slips. So I guess there is a slight premium over existing U.S. citizen rate living in the U.S.

01:02:45
Donald Klip
But because the rental income is over the mortgage payments, actually lenders love these types of loans. And I wouldn’t say they’re undocumented. We do. There’s some information that needs to be asked. I like to invest in commercial properties. Do you guys guidance us are the best areas to purchase, and help calculate the return on investment? Okay, so we write a lot of content on this. You probably read our newsletters, like which are the best states in the U.S., which are the cheapest states, which states people are moving to, and why. Last year, we wrote an eBook that was super detailed on population growth, rental income, and all those types of things. Han and Tracy have perfected their method. I’m sorry, I’m kind of stealing your thunder a little bit.

01:03:44
Donald Klip
Han and Tracy have perfected their way of doing things. But like anything in life, you have to do your research and there’s a lot of information. We could guide you on what to do first and where to look for this information. And we’re happy to do that. Some countries have a lot of issues with contractors. Bad quality, impossible to find contract due to resource. Yeah so, like Han and Tracy said, your contractors, your plumber, your electrician, a lot of these guys, you have to treat as your team. These are your kind of outsourced employees. Some you’ll get right, some you’ll get wrong. If you don’t find a good one, there are others. But your property manager will be the one doing this. They’re doing the bulk of this type of heavy lifting.

1:04:43
Donald Klip
I’m a Canadian citizen with a real estate license from Canada. Can you recommend both residential and commercial realtors? Yeah, sure. Definitely and everybody who’s asked questions will be given a personal email after this. What are the tax implications for capital gains in America? What are the tax implications for rental income? Is it best to buy under a company or a personal name for legal, financial benefits? Okay, so tax implications, we prefer to have our tax accountant give you that advice. And so after this call, if you want to drop your email, we’ll do that. Many, if not most, use an LLC to put the property under for financial and liability aspects of it.

01:05:38
Han Teo
Maybe I jump in over here on the capital gain tax portion. So there are a few ways to capital gains. There is a capital gain tax. Having said that, we all know that the tax code is written by the business people through the lobbyist. So there are ways to go around it. So there’s one way you can take a look. The best thing is to talk to your tax advisor or talk to Donald’s tax advisor. But you can take a look at the 1031 exchange. It’s a rule that allows you to reinvest your money without being taxed upfront. You defer the tax into the future when you decide to quit the real estate games. That’s one way. But I think there’s another way to sort of avoid capital gain tax is by not selling the property, but you still get to monetize it. How? You call Donald. You get a loan through a refinance, and that’s how you monetize it.

01:06:42
Donald Klip
What are the expenses or costs we expect to own a property in the U.S.? Do you guys want to take that?

01:07:00
Tracy Pah
It would vary, but the main ones, obviously if you want to start an LLC, then there are some setup costs. To start your LLC, get your tax I.D. going. Everybody will need a tax I.D. if they want to start earning U.S. rental income because they need to file income taxes in the U.S. If you’re talking about operation costs, then you have things like your property management fees, property taxes, mortgage, your landlord insurance, of course, always set aside buffers for repairs, for vacancies, like in case you don’t get it tenanted straight away. If you’re buying multi-family or depending on what is your lease agreement, whether you need to pay for utilities or the tenant pays for utilities. So, these are the common operating expenses.

01:07:01
Tracy Pah
And then you talk about business like business overheads, things like your tax accountant, your U.S. phone line to get a U.S. number. These are the normal operating expenses that you will be seeing.

01:08:11
Donald Klip
Cool. The question is, are you all mortgage brokers or lenders? So, we’re a mortgage broker. We’re the only mortgage broker outside the USA. If you go to the U.S., you would have to use a mortgage broker. So everything we do is exactly the same. I don’t want to get ahead of ourselves, but actually as of December, we have been approved as a U.S. mortgage lender. We haven’t launched it yet, so with a balance sheet to lend on the programs that we mentioned earlier. But America Mortgages is a mortgage broker. How many properties do you have? Can you do everything fully remotely? Yes, Han and Tracy do everything remotely. Do you finance multi-family apartments? What if rental income is equal to 25% of down payments? Can I use it as equity? Can you finance more than $3 million?

01:09:16
Donald Klip
Well, these are the types of questions we like. So we definitely can do multi-family. The down payment depends on the property value. We have a specialist that handles this. We’ve actually financed as much as a $112 million loan on a multi-family property. Ok back to the top. If you only have $60,000 to spare, is it not enough to buy a two-bedroom single-family home in Houston, Dallas, Texas, or where will you buy it? Of course, maybe I won’t use that wording. Of course, you can acquire maybe a not-so-nice home in the middle of nowhere for cheap, but you’ll need to contend with no renters and hack and flip. What would you do if you have no interest experience in U.S. investing? It’s kind of like any type of investing.

01:10:24
Donald Klip
It’s whether it’s a stock or crypto or whatever it is, there’s a certain investing style that may not be suited for everybody. When I buy stocks, I can’t buy value stocks. I’m not Warren Buffett. I have a certain way that I feel comfortable with. Forced appreciation is what Han and Tracy feel comfortable with, and so they’ve mastered that specific technique. Of course, there’s always going to be renters that don’t pay and all these types of things, but these are things that you could actually minimize the risk of by doing research. And that’s just part of the process. It’s not just about finding the cheapest home. It’s about doing comparable, doing comp researches. It’s like buying a stock. Would you buy the same stock if one has a lower PE and one has a higher PE?

01:11:24
Donald Klip
Each type of investing has its research that you need to do, especially if you’re looking at rental income. And there are lots of cities in the U.S., honestly, that are just incredible investment opportunities. And these are all things that you should contact me. We have a lot of research on these types of things.

01:11:49- 01:12:04
Donald Klip
Cash out? Answered that. Definitely cash out. We do. It’s what Han and Tracy do. We do that. I don’t think I answered this one.

01:12:09
Donald Klip
So the question is the loans that you are offering are very unique. How does America mortgages make money from the loans? Is this just the standard trailing commission of 1% or 2% from the lender or the borrower? Banks don’t give out some of these undocumented loans. I assume there’s a risk premium. So as a mortgage broker, there’s no trailing. Nowhere in the U.S. has this.

01:12:59
Donald Klip
It’s a one-time fee paid out of escrow at closing, paid by the borrower. I’d like to invest $500,000 in NNN commercial properties. We’ll contact you directly about this. Do you guys guidance what are the best areas to purchase and calculate the return on? Yeah, I think maybe Han and Tracy want to do this one.

01:13:36
Tracy Pah
I’m not sure if the question was for America mortgages or for us.

01:13:41
Donald Klip
Yeah, you have to do your research. The best areas to purchase depends on what you want. Do you want your budget? What do you want? What do you feel comfortable about? Some people will forego a little bit of return to be able to fly directly. Some people will want to forego a little bit of rental income. Maybe it’s because it’s near a school. So you need to know what your specific requirements are. Then, you go look and we can help you with that thought process. Do you help calculate the return on investment?

01:14:23
Donald Klip
Yes. We can give you the formula. It’s fairly straightforward. I’ll contact you directly, and we can discuss this. We went through that. I need some questions for you guys. I can answer this, but I’m going to let you guys answer this. Do you use an LLC as the legal entity to own properties? If so, do you have any insights on what state to incorporate the LLC, or do you own the properties in your names directly as individuals?

01:15:03
Han Teo
Yeah, so we do own an LLC to hold the properties. There are a few different schools of thought. Some like to do the multi-layer, one where they go set up one in, let’s say, Delaware or Arizona. And those, because the LLC set up there has a bit of special protection, that’s one way people do it, but that will add up on a lot more cost. And that’s something that we probably would suggest only do it when your entity gets very big. It’s become like a conglomerate. Like that, then you may need to pay a bit more to have this kind of added insurance protection. We do directly incorporate at the state that we do the business in, where we buy the rental properties in, because when you set up, then you become a legitimate entity within that state to operate.

01:16:03
Han Teo
It’s not right to set up an LLC in a different state and then buy a property in a different state. Then you are not a legit entity that’s doing business over there. You’re not properly set up. Similarly, if you are from another state, your LLC is from another state, and you do business in a different state, then your tax reporting will be a little bit different. So, there will be complications involved. Not complications, but there will be a bit more steps to go through. To us, we are trying to simplify as many things as possible so we don’t do all these things. So basically go decide on where you want to buy your properties and then set up, incorporate your LLC in that state, and then you can do business over there. I think I answered the three questions with that.

01:16:59
Donald Klip
And we just last week published on our newsletter a long explanation of LLCs, how to use them, and the benefits. So we’ll make sure you get a copy of that. What are your fees and do you handle/assist with real property taxes that we need to pay in the U.S.? I’m not sure exactly in terms of how to pay real property taxes. That should be paid out of your U.S. bank account so that we can advise you on how to set one up. So, in terms of fees, standard broker fees in the U.S., anywhere you go is 2%.

01:17:42
Han Teo
I think the property tax, what we understand or what we experience is the property tax, what they do is the lender will escrow, landlord insurance, and property tax. We are paying principal, interest, and escrow, which includes your property tax and your landlord, or your residential home mortgage insurance, whatever it is called. So, we pay for these four components every single month. And then a part of it will be P and I to pay off our interest and our principal. Then they will keep the escrow amount as it accumulates over the next few months. Then property tax usually, typically is usually paid twice a year, once at the start of the year, and once in the middle of the year.

01:18:30
Han Teo
And then the lender will then use the money in the escrow amount to pay off the property tax. That’s what I understand, but I think there are arrangements. I’m not sure, but there are arrangements where you don’t pay the escrow. You do the P and I only, and then you pay the property tax yourself. But that is not something that I’ve experienced before. But I heard of it before.

01:18:56
Donald Klip
I think I’ll add to that. That’s the fantastic thing about us mortgages. The property tax and any insurance are added into to the mortgage payment and the mortgage company pays it for you. How much does an independent appraisal cost and is it for both the value of the property and rental appraisal? Yes. Assume $500 to $700. How many properties do you have, Donald? Well, that’s kind of a personal question. What are your initiation expenses? I found between high setup costs and higher interest rates that non-bank sources are just too expensive to use. Yeah, let me explain. 70% of all mortgages in the U.S. are through wholesale lenders. So these are banks that don’t take deposits. And it’s all about making the numbers work. There’s no difference from what we’re doing than in the U.S.

01:20:07
Donald Klip
So it’s all standard practice. Let me just take a step back. My co-founder and I, founded this company, most people who open any type of business, you are addressing a problem that exists and you’re trying to fix it. You want to open a burger restaurant, you say, well, in this neighborhood there’s no burger restaurant. So that’s a problem. So I want to fix it by opening one. The problem that we identified is that it was difficult to obtain a U.S. mortgage overseas. The fact that we’re able to do this is because there’s a lot of hard work. We took four years to get to this level. And quite frankly, banks around the world are not wanting to lend. So its a misconception actually most mortgages in the U.S. are through what they call non-bank sources.

01:21:04
Donald Klip
I’ll give you an example. The biggest mortgage lender in the U.S. is called Rocket Mortgages. You could google them, but they’re not a bank. They do so much mortgage business, more than any traditional retail bank with deposits. So Pennymag, Rocket Mortgages, these are all wholesale lenders. These are all non-bank sources. And in terms of too expensive to use, obviously, Han and Tracy, you have to make the numbers work, so you have to do some homework. And this is stuff that we can also help you with. Please email me. Ah ok I think. Tracy and Han, do you do the property fixing upgrades yourself, or do you do it remotely via a contractor?

01:22:00
Han Teo
Do you want to say, Tracy?

01:22:03
Tracy Pah
No, we do it remotely. We don’t fly there and fix up our properties, so we do it remotely. Your property manager can do it for you. If it’s a very very major renovation and it’s out of the expertise of your property manager. There are a lot of general contractors you can get. How do you watch over them? It’s just like how you watch over any project going on. You need to have a timeline and a contract. Week one, finish what? Week two, finish what? Have photos, have video calls with them, and go through the progress. Maybe every week or so, you go through the progress and then split your payment into payment milestones, progressive payment. So that’s how you manage your risk. I think it’s probably the same as managing any project that is overseas or remote. So, just manage your risk. And yes, we don’t fly over to do it ourselves. We use technology. Technology is so good nowadays. We can video call, photos, and everything.

01:23:09
Han Teo
I think ultimately it’s what kind of lifestyle that we want. I think there are a lot of types of investments, crypto, REITs, stocks, and all those gold forex. I think we pick this asset classes because we have a vision of our lifestyle, we want to retire early, we want to travel the world, and we want a type kind of time freedom that allows us. So we deliberately designed this whole thing such that we can remotely obviously there are some people want to roll up their sleeve and go and do all the hard work and save the money, but as I mentioned, we designed this way, so we came up with the processes to make sure that it is remote. So we have boots on the ground that can help us to verify certain things.

01:24:05
Han Teo
We have different layers of checks, independent from each other so that not everybody is trying to work for one person, but everybody is working for themselves and me so that I can always ask one person to check on the other person’s work to get all these things done and things like do we want to fix it ourselves? I think there’s a lot of things. First, I mentioned I don’t travel the world. I don’t want to fix things myself. But secondly, I don’t have the know-how to go and do it myself. I can google, and I can try to frame the question after I google to find the solution.

01:24:37
Han Teo
But in the end, that is just me trying to vet the contractor to know how competent is he when he described to me how he’s going to solve the problem at hand. That’s just a long answer for this thing. Basically we deliberately designed this whole process to allow the lifestyle that we want.

01:25:01
Tracy Pah
Yeah, and it’s not sustainable to keep on flying there to fix it. Imagine you are scaling to 5-10 properties. It cannot be that you’re flying there ten times a year to go and fix things. And as we said, there is expertise involved. Things like electricals, how do you rewire stuff in the house? That’s clearly not our expertise. So we might as well pay the pro to do it. At the same time, we always have an eyes-on, hands-off approach to know what’s going on.

01:25:32
Donald Klip
Yeah, good.

01:25:35
Han Teo
One more thing. Sorry, I forgot to add one more thing. That’s the most important thing. When we select our cities, we deliberately project numbers to be able to pay for all these intermediaries to help us solve the problem without us doing it ourselves. Similarly, when we do our due diligence on the specific asset itself, we also cater for buffers, for contingencies. We allot all this amount so that if things happen, we know that this is the amount that we are going to reserve basically to go and pay for all this work to be done. So we are not at a borderline whereby we need every dollar and every segment. So we buffer all this into our projection, our performance. And when things happen, we are like, okay, call and get someone else to go and settle it. We budget for all this insight.

01:26:32
Tracy Pah
I think since we’re on this, I saw that there’s another question to ask. Are you worried that contractors will take advantage and overcharge you for materials? So actually you can just go to Home Depot or Lowell’s website and search how much it should cost. Don’t be afraid to negotiate. Let’s say you go on to Home Depot. Home Depot is like their courts or their Harvey Norman like that. There’s a shop that sells a lot of home supplies. So, it’s all online. You can go to their website online. Let’s say you want to buy a refrigerator. You go online, you see, oh, refrigerators cost, you can get a lot at maybe $400. And then the contractor comes and charges you $1,000 for the refrigerator. You can just print screen, show him, and say, hey, “Home Depot is selling for only $400. Why are you buying it at $1000?” And don’t be afraid to do that. They are more than willing to listen to you and negotiate on your terms. You can even say, “Yeah, I say Home Depot has this new model. You just go and buy this one.” So, it is very flexible. So that’s why we always say, eyes on, hands off. It is not everything off, and let them just do everything and slap you an invoice at the end of it.

01:27:48
Donald Klip
Another thing that people do is you can buy the refrigerator, have it delivered, and then have your handyman actually take the refrigerator, pay him a little bit of money, open the box up, throw it away, and put it in the kitchen. It’s so transparent.

01:28:05
Tracy Pah
So many ways to do it.

01:28:09
Han Teo
And I want to add that, yes, we definitely worry about this. Yes, there are always contractors that will possibly cheat you, but I think you can always get referrals because. Let’s say you ask me like, hey, I need someone to do painting and I refer to someone to you. I wouldn’t refer just anyone to you. I refer someone that I trust, that I have worked with, and I’m comfortable with giving you. If anything happens and things don’t go well, you will blame me. When I refer, I will call the person and say, “I’m going to refer someone to you.” And then I will of course tell them, please take care of this person.

01:28:55
Han Teo
If this goes well, I can always have trust that I can refer the next person to them. So I think this is a thing that we do try to advocate in the sense that do try to verify. You can do Google reviews. Google reviews can only go so far but really talk to practitioners, talk to people in the city who are doing the same thing as you, and then ask them who they’re using. Then with that, I think it doesn’t eliminate the risk, but it reduces the risk. So that’s what I want to add. Thanks.

01:29:28
Donald Klip
Okay. So another question is, do you have to file 1040-NR tax forms? It seems like you’re quite informed, so you are required to pay U.S. tax. But the amazing thing about the U.S. is that as a foreign national investor, you get the same tax benefits as a U.S. citizen. We have amazing tax advisors to refer to. And I think one thing I’d like to add is with the right CPA education and structure, it’s possible to not pay taxes. There are just so much strategies out there to work for you. How does refinancing work in terms of timing? Is it realistic to refinance over twelve months, etccetera, in costs, for example, if my financial situation changes or the Fed reduces interest rates quickly by 1.5% over the next twelve months?

01:30:29
Donald Klip
Okay. Refinancing, most loans will have a prepayment duration, which we help you negotiate. It’s usually two years, but you can buy that down. And these are all things that we can help you analyze and structure the right program for you. U.S. Fed funds rate, people think mortgage rates are fed funds rates. They’re unrelated. Fed funds rate is the rate that banks borrow from each other for short-term liquidity. Now, it’s somewhat correlated to mortgage rates, but it’s not a driver of mortgages. This is what Han does. And Han and Tracy buy, refinance a bit of strategy. But refinancing is a big part of what we do.

01:31:31
Han Teo
Donald, I think there’s one question, how fast can they refinance? I think there was one question. Since you’re on this.

01:31:36
Donald Klip
So these take 30 to 45 days. If you use bridging loans, they’re much faster if time is sort of the priority, and those can be done in a matter of weeks. But any standard loan takes about 30 to 45 days.

01:31:52
Han Teo
I think what the person is asking is, after they buy I believe all the cash, how long does it take for them to be able to do a cash-out refinance?

01:32:05
Donald Klip
You probably need to hold the property for six months if you want to use a new value. I think we’re done. We’ve answered all the questions. So why don’t we do this? We’ll do a closing. First of all, from America Mortgages and Global Mortgage Group, I want to thank everybody for tuning in. It was a lot more sign-ups and engagements, which we really like. And I want to thank Han and Tracy for joining us. I encourage everybody to sign up for their webinar. I’ve joined it. I’ve learned a lot. These guys have a great strategy and they’re super friendly and approachable. So with that said, I’m going to leave Han and Tracy to send this off in the right way.

01:42:25
Tracy Pah
Send this off. Hi, thanks so much, guys, for spending your time with us today. I know that it’s a very new topic in a sense that even when we started, we did not know. Even up today, we don’t know anybody else from Singapore doing U.S. real estate investment on this kind of scale, to make it your core business and also to gain financial freedom from there. So obviously, when we started, we received a lot of negativity from people doubting us. So the fact that you have bothered to spend your time here to listen to us, we appreciate that.

01:34:10
Tracy Pah
Again, we do have the free webinar coming up on 31st January, so feel free to join us again where we can share more information about U.S. real estate at the same time. Any questions you have, just feel free to email us at [email protected] or on any of our social media, Facebook message, Instagram message, anything. So we are really happy to grow our community and to connect with more like-minded people like us. So, thanks again so much for being here.

01:34:46
Donald Klip
So with that said, for those of you in Asia, have a good evening. For those of you in Europe, thank you for waking up and listening to us. And for those of you in between, thank you for this engagement, and look forward to hearing from all of you.

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Disclaimer: This transcript is AI-generated, so kindly pardon any transcription or grammatical errors that may be present.

02:49
Robert Chadwick
Hi everybody, this is Robert Chadwick with America Mortgages. Thank you for joining us for another webinar. Today, we are happy to have Lucas Ramos from Steadily Insurance. Steadily Insurance is one of our vetted insurance partners. They are our only vetted insurance partner, and they help provide insurance for our foreign national and US expat mortgage clients when they require this type of insurance. Lucas, perhaps you could introduce yourself, what Steadily does, and what your background is, and then we’ll go into the slides.

06:34
Lucas Ramos
Yes, excited to be here with every one of you. So good evening, everyone, and thank you for having me this evening. My name is Lucas Ramos. I am a team lead with Steadily Insurance. I am probably one of the first agents who was with the company when they first opened up, and I’m still here. My specialty is working with investors and property owners that rent out their properties. I also work with property owners that also occupy their properties across the country and globally. I’ve been in the insurance industry for almost 20 years now. So, coming to you with a lot of knowledge and a lot of information this evening.

07:22
Robert Chadwick
Okay, you can go into your slides now if you’d like, Lucas. I’ll be controlling the slides. So if you just tell me when to move forward, I will follow your direction.

07:32
Lucas Ramos
So this first slide is just a disclaimer letting you know that the insurance coverage that we’re going to be discussing this evening is just a broad stroke. It’s not specific to any one policy. Any one policy is based on your specific need and what you’re going to be doing with your investment property. As it says on this slide, right now, Steadily is number one in the US for offering fast and affordable insurance for rental properties in all 50 states. That’s a great one. Landlord insurance is what every one of you will need when you choose to purchase a dwelling or a home and you choose to rent it out and not occupy it yourself.

08:16
Lucas Ramos
It’s going to cover you from anywhere from your legal liabilities to the actual dwelling, which is your house itself for any damages and also protect you against any of the possible injuries that your tenant can have that you’re renting the property to. You have two different types of policies. You have your homeowner’s insurance policy and you have your landlord’s insurance policy. A homeowner’s insurance policy is basically when you buy a house or you buy a home and you choose to occupy it yourself, you’re not renting it out. That is different from basically getting a landlord policy in place where you buy a home and you’re renting out the property to either a tenant family member or you’re using it for an investment purpose compared to renters insurance. Renters insurance is something that your tenants would get in place.

09:15
Lucas Ramos
So when you own your investment property and you choose to rent it out, you rent it to a tenant. At that point, your tenant would get what’s called renters insurance to protect their personal belongings within the home. And it also does come with some liability coverage. And the best advice that I can give for every one of you as an investor is when you buy your investment property and you’re renting it out, it’s pretty safe practice to always require your tenant to go get a renter’s policy in place and make it as part of your lease agreement and a requirement. Landlord insurance policies are very similar, just like stage two primary home insurance policies. It’s all hazard insurance.

10:04
Lucas Ramos
They’re all called hazard insurance policies, they’ll cover the home for things like fire, windstorm, weather-related damage, vandalism, and theft. But they do differ. You cannot get a landlord insurance policy in place when you’re the one occupying your own home. It’s like trying to file a liability claim against yourself, which you can’t do. Landlord insurance is always needed when you’re going to rent out the property versus primary home insurance. Another good slide is the types of water damage that most, if not all insurance policies, will cover except for flood. Accidental water damage. If you are trying to fix a pipe in your home and you break the pipe, trying to fix it and you get a leak from that, that’s accidental. If you have long-term water damage, that is a case-by-case scenario with a lot of insurance carriers.

11:05
Lucas Ramos
If they feel like it’s a long-term water damage where something that could have been prevented from you being negligent, you might have an issue with getting that covered. But if it was accidental, again, that’s why you have the insurance, then that would be covered. Flood insurance is a separate policy. One of the misconceptions about landlord insurance or home insurance is that if we have a flood, does my policy cover this? And that answer would be no, you would need a separate flood insurance policy. These are the two most used forms for landlord insurance. So really quickly, I’ll discuss homeowners as well.

11:49
Lucas Ramos
If you look to the left side of this slide, a homeowner’s insurance policy would have a letter H in front of it, and particularly it would be an HO3. When you have a landlord policy, your home is considered a dwelling. So it usually starts with a D. A DP1 is a very basic landlord policy. There are a lot of exclusions in this policy, and anything that is physically named in your policy would be the only thing that would be covered. Everything else is excluded from coverage. If you go down to the second one, a DP3, that is considered an open peril or an all-perils policy, meaning everything in the policy would be covered. The only thing that would be excluded is what’s listed in the exclusions.

12:44
Lucas Ramos
To give you the best advice that I can give you even on my investment properties when it’s going into your portfolio, it’s a long-term investment. It is always best to get a DP3 policy in place. Some of the basic things that both policies do cover or will provide are liability coverage for injury, your loss of rental income, if there’s a claim and your tenant can’t live there, and you have to get the house fixed, and any detached structures that are listed on the policy. A detached structure is something that is not attached to the home. If you have a storage or a shed, a cabana, or something in the backyard that is not attached to the house, that would be considered a detached structure that would be covered on your policies.

13:35
Lucas Ramos
Just like I went through a little bit earlier things, insurance policies do not cover your tenant’s belongings. Your tenant’s belongings would be covered under the renter’s insurance. Because you’re renting out the home to a tenant, the personal belongings don’t belong to us as the property owner or as the landlord. The personal belongings would be covered under a renter’s insurance policy. Normal wear and tear, we can’t file insurance claims for things that break down because they’re old. So if you have an AC system or an HVAC system for your air conditioning and it’s 25 years old and it decides to break down, you can’t file an insurance claim for that. That’s more like a home warranty type thing. Tenants damaging your belongings. A tenant, when they rent the home, is like an extension of us.

14:24
Lucas Ramos
So that wouldn’t be covered. That’s why we get security deposits when we rent out the home to a tenant to cover that. Then another exclusion that’s on every insurance policy, terrorism, war, any disease-related things. Those definitely wouldn’t be covered on any insurance policy for a dwelling or primary home. This varies. How much does insurance cost? I get this question a lot. I am licensed and appointed in all 50 states. And these premiums you see on this screen are varying right now across all 50 states in the US. So if it’s a standard home, maybe under 1200 sqft, it’s a long-term rental built within the last 15 years. You would see a premium, maybe for about $1,100 or less.

15:16
Lucas Ramos
Or you would see if it’s a short-term rental where you’re renting it out for six months or less. Anything under six months would be a short-term rental. Anything over six months would be a long-term rental in the insurance industry. But that’s the premium you would see for a standard-size home. Again, it’s dependent on a lot of different factors. The size of the home, the occupancy of the home, the rebuild cost of the home, and the location, where it’s located, in which state in the US or abroad. Another good slide, which I absolutely love. A big misconception with deductibles that investment people or property owners have, is that when you have a deductible on your insurance policy, that’s something you would have to pay first for the insurance company to pay the rest.

16:09
Lucas Ramos
that is a very big myth. I look at the slide here, let’s say if you did have a $10,000 claim and you have a $1,000 deductible on your insurance policy, the insurance company is going to pay out the claim minus your deductible. There’s not something that you would physically have to pay first. In other words, if it’s a $10,000 claim, the insurance company is going to minus your $1,000 deductible and send you the check for the 9000 and then you can go ahead and fix whatever needs to be fixed as part of the claims process. Airbnb and VRBO. I don’t know if everyone is familiar with what that is. It’s very big here in all 50 states in the US and abroad.

16:58
Lucas Ramos
these are short-term rental policies and these are people who choose to contract or owners who choose to contract with the company, Airbnb, or VRBO. Do they have their insurance policies? Yes, but their insurance policies do not provide any coverage for the actual structure, damage to the structure of your home, or anything like that. What they do provide is while you’re using their program they’re going to provide you liability coverage while it’s being rented, when you have it occupied through their program with someone for the short term, and also for any personal property. Because when you have a short-term rental and you’re renting it out, nine out of ten times you own the personal property in that short-term rental because you’re letting other people use it as such for short-term Airbnb and VRBO.

17:46
Lucas Ramos
But don’t mistake that for not getting your dwelling or your landlord’s insurance in place. You still need to have that in place even if you’re contracting with Airbnb or VRBO. What kind of insurance is for a midterm rental? The term midterm rental is a term that a lot of investors and property owners use, including myself. Outside of insurance talk, we use that. Technically in the insurance industry, there is no such thing as a midterm rental policy. Depending on your occupancy and how you’re renting out the house, that’s going to determine if you’re going to get a long-term or a short-term rental. So the rule of thumb is that you can say 95% depending on the carrier. But a big rule of thumb is if your lease agreements with your tenants are under six months or less or five months and 30 days or 27 days, whatever that number chooses to be, then that would be a short-term rental policy. If you’re six months or twelve months more on a lease, then you would go on a long-term rental policy to make sure that you’re not exposed and you’re insuring it the right way. Your coverages, I like how they put midterm rentals here. It’s funny. Your coverages for your long-term or short-term rentals are going to be pretty standard across the industry with a DP3. DP1 doesn’t provide coverage. One of the big misconceptions I’m going to touch on from the previous slide, vandalism, and mischief are some of the biggest exclusions on a basic DP1.

19:29
Lucas Ramos
The only time you’ll get vandalism and mischief that is included in the policy is on a DP3, and we can discuss that further in the Q&A. These are the standard coverages that you would get. Your dwelling coverage is your house to structure, damage for fire, weather-related damage, water damage, and anything that applies to that. Vandalism and mischief on a DP3, someone tries to break into the home and they get in there and vandalize it, or even if they couldn’t get into the actual house, they vandalize the front door, they break the locks, things like that. The bedbug coverage would be more for short-term rentals because you have so many different people going in and out and the leases are a lot less. That’s a good coverage to have on a DP3.

20:15
Lucas Ramos
God forbid you do wind up getting bedbugs in the house, then liability coverage is broad. It’s offered on a long-term or a short-term rental policy, no matter how you’re occupying it. And again, we are rated number one right now in the US, in all 50 states, for the fastest and most affordable insurance for all types of rental properties. Because you can have several different investment properties. They can be anywhere from a single-family to an apartment building. And you can go online. We’re trying to make this a very easy process.

20:57
Lucas Ramos
You can go online to the Steadily insurance website and, the first thing you’re going to see is punch in the address or type in the address for your investment property that you own, and then it’ll start providing you a lot of information. You’ll have to answer a few more questions, but it’s pretty quick. You can probably get a quote within two to three minutes and get connected with one of my agents. Touching on what we just discussed, your investment property can be anywhere from a single-family home, meaning that it’s one unit. You’re only renting it out to one person. If you can own a condo, condo units typically have a condo policy that can still go on a DP3 or D1. However, on condo policies, you’re not responsible for the exterior.

21:50
Lucas Ramos
You’re not responsible for the roof and you’re not responsible for any damage to the outside of the siding. On a condo policy, you would only be responsible for the drywall or your studs from the inside of the unit, and that is it. Manufactured homes, we also provide coverage for, if you’re not familiar with that term, it’s a mobile home. And that’s very big in the US as well. A lot of people are mobile homeowners and use them as rental properties. Apartment buildings are anything that’s five units, which means it’s not a four-family, a three-family, a two-family, or a single-family. Anything that’s five or above that you can have five different families living in there would be under an apartment building. So anything five units and above, all the way up to 1000 units.

22:34
Lucas Ramos
If you have an apartment building that big, we provide coverage for that. And multifamily would be your quadplex, which is a four-family, a triplex, which is a three-family, a duplex, which is your two-family, and a single-family. That’s your multifamily. That last one is if you’re building a property, whether you’re building an investment property to rent out or you’re building a home for your primary occupant, you’re occupying it yourself. We do cover and offer vacant builders risk policies, new construction policies, or even if you’re going to buy a house to renovate it and then rent it out as a long-term or short-term rental, we do offer those policies as well.

23:24
Lucas Ramos
And yes, if any of you are not familiar with TrustPilot, Trust Pilot is one of the biggest review companies in the US right now in all 50 states. So if you go to TrustPilot, you can see our reviews. These are from real-time, real customers that we have accumulated since we started up three years ago. So, I would advise all of you to check that out too and see what the reviews look like on TrustPilot. This is for any of you who would like to become a brand ambassador and kind of like a partner, where you can become an ambassador. We’ll send you an affiliate link where you can start generating income for promoting Steadily for us. And for more information on that, that link or URL on the bottom there, if you remember, or you can write that down.

24:15
Lucas Ramos
Maybe I might put that in the chat as well. But you can click on that if you want to become an affiliate of Steadily. We would love to have you. That’s where you can do it. You can get a quote online in minutes. It’s lattesandleases.steadilypartner.com. I didn’t see that one. That’s good.

24:41
Robert Chadwick
thank you and I think we’ll go to the questions and answers at the end, but super informative. A couple of things that I took from this. In the US, as you’re likely aware, all mortgage lenders will require something called hazard insurance. And hazard insurance is the replacement cost of the property in case something happens. But I think a lot of the things that you brought up were additional to this hazard insurance that would benefit real estate investors or property owners, whether it’s going to be mitigating them from lawsuits or protecting the property, et cetera. Super good information. One question I had myself, when you were talking about the premiums, and it was about $1,000 a month or so, was that annual premium or was that monthly premium on average?

25:45
Lucas Ramos
That would be an annual premium. Great question.

25:49
Robert Chadwick
Quite affordable then.

25:52
Lucas Ramos
Affordable.

25:54
Robert Chadwick
Perfect. I thought it was great too, how you touched on bedbugs because you’re constantly hearing that in the news now, that there’s a bedbug problem in this state or this country or whatever. So, very interesting stuff. We’ll get back and do the questions and answers. If anybody has any questions on what Steadily Insurance can provide, please put them in the chat section of the webinar. Also in that chat section, there are links to schedule free consultations with both Steadily and America mortgages. So if you want to sign up, you have questions on either insurance or mortgages, please feel free to do that. It’ll pop into the chat every so often. Right now, I will do a quick coverage of what America Mortgages can offer to foreign investors and US expats living abroad, earning their income abroad.

26:54
Robert Chadwick
Again, 100% of our clients are living and working outside of the US, but obtaining US mortgages. In the general mortgage overview for all of our loans, there is no US credit required, and no AUM, which means there’s no requirement for you to put a minimum deposit in the bank where you would be obtaining the mortgage loan. Foreign income, because all of our clients are living and working abroad. Absolutely allowed. We have loan programs in all 50 states. If you’re a foreign national, so you’re not a US citizen, and not holding a green card, you can get up to 75% financing in all 50 states. If you’re a US expat, we try to make it just as if you were to walk into a bank in the US. You can get up to 80% with the same coverage and programs.

27:51
Robert Chadwick
Normally, once you submit your documents, we can give you a loan approval within 72 hours. This is super crucial if you’re looking to purchase a property because before you put an offer in, you need to have a pre-approval letter from a lender. We’ll issue you that letter when you put your offer in on your property. You also submit that the lender and the seller’s agent on that side are fully aware that you are pre-approved for a mortgage loan. Will make your offer much more, I guess, viewed in favor of perhaps other offers. On average, we have closing times between 30 to 45 days. You do not need to go to the US to sign your closing documents. We’ve been doing this for a long time now.

28:42
Robert Chadwick
We have at least a dozen different ways where you can close your mortgage in a very convenient, easy way in the country that you’re living in. Purchase, refinance, pulling cash out, or equity releases, are absolutely possible. 30-year amortization regardless of age. Very unique to the US, the mortgage tenure is not limited to the age of the borrower, meaning that if you’re 19 or 99, you can still qualify for a 30-year mortgage. The reason behind that is quite simple. In the US, you cannot discriminate against anything. Age, sex, religion, and the age for a mortgage are the same. We have ten-year interest only, which is fixed for ten years. Convert into a 30-year principal and interest loan, so you have a total 40-year tenure.

29:42
Robert Chadwick
that’s perfect since interest rates are a little bit higher now to where you’re still able to see some fantastic yields. Then at some point, you can either choose to refinance when rates go down, or at least you have the comfort of knowing that this loan is fixed for a long period. We have loan programs that are based on common sense underwriting. Just as you would underwrite a commercial property, you would underwrite it off of the cash flow. We do the same thing for rental properties, meaning that you do not need to provide your income documentation. You can do this by going off of only the rental income of the property. Fantastic program. What we are very proud of is that 97% of the loan applications that we submit are approved.

30:34
Robert Chadwick
And what that means is, after speaking with one of our loan officers based all over the world, if they tell you, “Yes, I think this is something we can do”, they take the application, and we submit it. It’s almost guaranteed to get approved. Normally, if there is an issue, it’s an issue with the property and not the borrower’s profile. We have loan officers all around the world. So when you go on to our calendar, if you click on the link to be able to talk with one of the America Mortgages loan officers, it is a 24/7 calendar in a variety of languages. So, we’re in your time zone and we speak your language. The loan programs that we have, I’ll just kind of briefly go through these.

31:22
Robert Chadwick
If anybody has any specific questions, we can answer them in the chat, or you can also talk to one of our loan officers. So, this is our most popular program. And this is the one that I said is a common-sense underwriting. It’s called our America Mortgages Express or AM Express+. No personal income documents are required. You’re going to qualify only on the rental income of the property. And it’s normally a one-for-one. I’ll go over that in an example. No US credit is required. Loan amounts as low as $150,000 with a loan-to-value of 75%, meaning that you only need to look at property values of $200,000 plus to qualify for this program. It can be used for both purchases, refinance, and equity release. This is how it works.

32:17
Robert Chadwick
It’s quite simple and very easy to understand. If you have a gross rental income of, as an example, $2400, and your mortgage payments including taxes, principal, and insurance are $2,400, the loan qualifies. This is absolutely fantastic. And just for the sake of an example, if the rent does not cover as much as the mortgage payment would, it does not mean that the loan does not qualify. All it means is the LTV may need to be adjusted. Either way, this is almost an assurance that you will be able to get this loan at a very market rate. Our AM Investor+ has no tax returns required. So rather than using tax returns, and because this is mainly done by clients that are from Sydney to Shanghai and in between if our underwriting was having to go through the taxes and the tax filings of a variety of countries, it would almost be impossible.

33:33
Robert Chadwick
So rather than asking for tax returns, or NOAs or W-2s, or whatever it may be, we’re going to use a letter from your accountant if you’re self-employed, or a letter from your employer, if you’re employed. And that letter just states two years of income and the current year to date. Quite simple, quite straightforward, and a great way for you to document your income without having to go through multiple hassles. Again, for all of our programs, no US credit is required. Minimum loan amount, $150,000. In this loan program, we can go up to $3 million.

34:08
Robert Chadwick
No minimum deposit, meaning that there’s no AUM required. And again, 30 to 45 day closing in the country you’re living in. How to show this, or the example of this? It’s off of a debt-to-income ratio. Based on the gross income that’s shown in that letter. It has to be 47% or below. Our high net-worth mortgage program is becoming increasingly popular, especially with our private bank clients. High net worth individuals have normally very complicated tax returns, multiple jurisdictions. They may not show what their true serviceability of debt is. So rather than going off of tax returns or even an income letter, we go off of their liquid portfolio, cash, stocks, bonds, something that could be liquidated, that could potentially be used for income calculation.

35:21
Robert Chadwick
We take two months of those statements. There is no encumbrance of those assets. The only encumbrance is on the actual property that you’re buying or refinancing. All we’re using is these statements to qualify for the loan. The day that the loan closes, you can trade it, you can sell it, you can do whatever you choose. This is merely to show what the person’s net worth is if they were to liquidate that asset and be able to pay this mortgage. This loan program starts at a minimum of $3 million and can go up as high as $100 million if that’s required. So how that would work? It’s a very interesting calculation. We take the two-month average of $5 million portfolio over the fixed term of the loan. Say, in this case, it’s five years.

36:14
Robert Chadwick
It would give you an average income of $83,000 approximately. As long as your mortgage payment is below that, the loan will qualify. The great thing about this is you’re using those assets only to qualify for the loan. But there’s no encumbrance or no requirement for you to move that to any other account, et cetera. If you’re a US expat, we try to make this like you’re walking into the bank and working in the bank. No W-2 is required. We realize that you’re earning your income in foreign dollars. Probably 20% of the business that we get every month is a US expat that went to a local bank or even an international US bank, and then they find out at the very end, wait a minute, you guys are earning your income in Hong Kong dollars or euros.

37:08
Robert Chadwick
Sorry, we can’t accept that. Our loan programs are specific. 100% of our clients fall into the category of not living and working in the US. So we’ve made these programs exactly like you were living in the US. Two years of tax returns, pay stubs, and bank statements, are exactly what you would provide for a US loan. Same loan programs and same pricing. There is no premium just because you’re living abroad. How it works is, again, it’s on a debt-to-income ratio of 47%. So as long as you can qualify for that, just as you would qualify in the US, the loan should be fine. AM Student+ loan. Maybe we can cover this too with Steadily, but if you have children who are going to be studying in the US, you don’t want them living in the dormitories.

38:08
Robert Chadwick
You want to buy them a property that maybe after they finish school they can keep. You are going to qualify only on the rental income, the potential rental income of the property, even though your child will be living in that property. This is a great program. Happy to discuss this further. Also, you can add your child to this loan, which helps them build US credit, which is paramount once they graduate from school and choose to stay and live and work in the US. Again, how this works is very similar to the Express+ loan. It’s going off of the projected rental income of the property. We have an office in Texas and we also have our main office and our corporate office, which is both for America Mortgages and Global Mortgage Group in Singapore.

39:00
Robert Chadwick
Our contact information is on the right. If you want to scan, that will bring up all the contacts. In the chat, there are links to both America Mortgages and Steadily, if you would like to schedule an appointment. We will go into the chat and we will answer some questions. I will start off, I’ll read the questions, and then if you have any questions that relate to Steadily Insurance, we’ll get those answered. Anything related to Mortgages, I will answer as well. Let’s get to the questions.

39:53
Lucas Ramos
We’re in the Q&A, questions and answers box.

39:56
Robert Chadwick
We’re in the Q&A section. I’ll read the questions. Lucas, if it’s directed to you, I’ll ask you to answer it. If it’s directed to me, then I’ll answer it. And a lot of times, maybe it will even be for both of us. So first question is, does my insurance policy provide coverage for wear and tear? Good question.

40:17
Lucas Ramos
That is a great question. And the answer to that question, 99% of the time is no. Wear and tear would be something that would be covered by a home warranty plan. So again, as we discussed during the slides, it would be like if your AC or your HVAC unit breaks down because it’s old, then that’s something that’s considered wear and tear. Or if your roof is 30 years old and it’s very worn down and you need to get it replaced, that’s something that would be considered wear and tear. So those things would not be covered on your dwelling insurance policy.

40:50
Robert Chadwick
Okay, next question. If the tenant leaves a property in an unfavorable condition, is that covered under a Steadily Insurance policy?

41:02
Lucas Ramos
Tenant leaving the property in an unfavorable condition on any dwelling or landlord insurance policy, 99% of the time would not be covered. When we rent out the property and we have a lease agreement in place with our tenants, we also are taking security deposits for issues. So if the tenant leaves it unfavorable, they didn’t take care of it, and you have to go in there and fix up what they left in a mess, then that’s something that we would keep the security deposit. And anything after that, we would most likely have to go directly to the tenant and try to collect the rest.

41:38
Robert Chadwick
Okay. Would you recommend investors purchase an extra insurance policy on top of the standard policy for acts of God like storm damage, et cetera?

41:50
Lucas Ramos
I would not. I’m speaking to you not only as an insurance agent but also as an investor, special form DP3 policies have a lot of coverage for things like acts of God, storm damages, or anything weather-related, storm-related, tornado, hurricane, or tropical storms. That would all be covered under your special Form DP3 policy. You would not need another policy to help you protect that.

42:23
Robert Chadwick
. This is not a question, this is just something I’m adding. I think what makes the US unique as well is that in most countries when you get a mortgage, you’re required to buy life insurance on that policy. The US does not have that. But do you recommend something like that? Or is that something possible that people should consider? Especially if they’re buying investment properties to pass these properties down to family members at some point?

42:54
Lucas Ramos
for that purpose, yes, I’m a stickler for exposure. The more liability, the more protection, the better. So I’m never not going to say no to that. So any more protection that we can get to protect our investment, our assets, I would agree with and say, yes, I would do that.

43:12
Robert Chadwick
Perfect. Next question. Hi, Lucas. Does my insurance policy also provide property and liability protection for my tenant?

43:21
Lucas Ramos
And the answer to that question, straightforward, is no. Your tenant has no insurable interest in the property. You are the owner. So, that policy is meant to protect you as the owner. And that’s why it’s always a good rule of thumb that when you’re going to rent out the property to a tenant, as part of your lease agreement or your lease requirement, is to have them get renters insurance. Renters Insurance is what provides your tenant with the liability protection that they need. And the property itself would only be their personal belongings. So that would be their personal belongings that would be covered under the renters insurance.

44:04
Robert Chadwick
Okay, great answer. Next question. Can you add the URL in the chat for the Ambassador program? Sure, we absolutely will. Next question. How long is the pre-approval letter good for? In general, once you submit all your documents and we issue the pre-approval letter, that pre-approval letter is good for 60 days. As long as your financial situation doesn’t change or the loan program that we put you in doesn’t change, the letter is pretty good for a long time. Normally when you are going to put an offer in on a property, we can also refer you to vetted realtors, much like Steadily, in all 50 states.

44:57
Robert Chadwick
So the realtor that is referring you will want the letter to be specific for that property, just so the seller’s agent can see that it’s not a blanket offer that’s being thrown out all over the place. But we have a 60-day expiration of that letter, so you just may want to get it renewed, or if it’s for a specific property, get it made to that property. Next question. Are there restrictions on the number of properties that we can mortgage and finance for? Technically, no. As long as the properties qualify or you qualify as the investor, you can buy 1 or 1000 properties. We do have portfolio loans, meaning that you can buy multiple properties at one time or refinance multiple properties into one loan, which makes the administration of this much easier.

45:57
Robert Chadwick
As an example, we have a client living in Asia that has over 400 units in one city. Can you imagine the administrative nightmare of having to write out 400 checks? So he just chooses to do, I think, it’s per 100 properties, but absolutely. And the great thing is, unlike most countries, there are no restrictions on the loan to value. So you can have one property at 75% or 80% loan to value or you can have 100. There are no limitations or restrictions. Any issue with purchasing a couple of low-value properties that would total a similar amount of $200,000? Unfortunately, yes. If you’re going to buy an individual property, there needs to be a minimum purchase price of $200,000.

46:49
Robert Chadwick
If you’re going to buy multiple properties, and this would be five or more properties, you could probably go down as low as $100,000 per property and do it in a portfolio loan. If you’d like more information, it’s probably better to talk to one of our portfolio specialists and they can explain the process and the minimum requirements for this, but it is possible. Any special considerations for getting a mortgage on properties in certain states or regions? No. In general, we have loan programs in all 50 states. Some states have quirky issues with them. But what makes the US unique, especially if you look at global investing now, one, that there are no stamp duties, so you’re not going to be paying a premium to the government to be able to buy a property.

47:44
Robert Chadwick
And there are no restrictions on foreigners buying in any location. This one is for you, Lucas. Does the landlord insurance always include a minimum of six months of lost rent coverage? Besides just that question, maybe you can go into what is lost rent coverage and what exactly that entails.

48:11
Lucas Ramos
That’s a great question. Landlord insurance typically offers twelve-month loss of rent coverage 99% of the time, unless the investor or the insured, which would be the owner, wants to exclude loss of rent coverage. Before we go into what loss of rent is, I can say that if you do have a mortgage, you’re going through a mortgage company, ten out of ten times, for an investment property, you’re going to need loss of rent coverage, rental income coverage, and you’ll also need replacement cost on your house when you are working with a mortgage. Loss of rent coverage means, let’s say you were renting out the home for $2000 a month. Let’s say six months later, your tenant has an accidental kitchen fire, and it’s not liveable.

49:08
Lucas Ramos
Your tenant has to leave the house because it’s not liveable. You file the claim and the house needs to be repaired. If the tenant is not living there, you’re not collecting rent. And if you’re not collecting rental income. And this is where this comes in to replace that. It’s up to that amount. So whatever the total amount is, times 12, 2000 a month, that’s what the insurance policy will offer you for the year. But it’ll give you in the months that the tenant is out of the home. So if it took three months to fix the house or to fix the kitchen or whatever it took to get the tenant back in there, then you would get three months’ loss of rent.

49:47
Lucas Ramos
So if it was 2000, then the insurance company would give you $6,000 back for loss of rental income.

49:54
Robert Chadwick
Very interesting. Next question. Do you require a roof inspection before issuing a policy?

50:04
Lucas Ramos
That sounds like a Florida question. I’m appointed in all 50 states, guys, but I am in Florida, and the state of Florida is a whole different animal when it comes to insurance. Most carriers here are going to require a roof inspection on your policy or to get a policy with them. For homes that are 15 years and older, typically for homes that are 15 years and less, most carriers should not be requiring a roof inspection.

50:43
Robert Chadwick
Okay, another Florida question. Do you cover Florida property where the risk of hurricanes is high? Isn’t that all of Florida?

50:52
Lucas Ramos
Great question. Yeah, that’s all of Florida. Not only with Steadily but Steadily is partnered with maybe over 20 carriers in Florida right now. For the individual asking this question, if you have properties in Florida, I think we all know right now that the insurance market here in Florida is an absolute crisis. We’re one of the states that’s in crisis for many situations. But yes, we do have partners that offer property insurance, and we’re even partnered with the state insurance, which is Florida Citizens, which is a nonprofit. And if that has to be the last option, if you can’t qualify for any of the other carriers, then we do have citizens where everyone typically goes as the last option.

51:43
Robert Chadwick
Excellent. Next question. Do we always require the wind mitigation inspection and four-point inspection? If we can’t have that, what will happen? Will this be an add-on to the premium?

52:01
Lucas Ramos
That’s another Florida question. Definitely Florida, maybe coastal Louisiana. If the house is 15 years old, tip of the rule of thumb, 15 years or more, then you’re going to need a wind mitigation and four-point inspection. If you don’t have one, some carriers will give you a premium or will give you an insurance policy without it. I mean, it still has to be favorable, the roof, everything, the four point has to come back favorable. Typically, you would have to go to a specialty market carrier, which Steadily also has in their book. Lloyds of London, a Spinnaker Specialty, are all specialty market carriers that will not require or do not require a wind mitigation or four-point inspection. And the premiums will typically be higher because you’re not providing that.

52:55
Lucas Ramos
For carriers that do want a wind mitigation or four-point inspection, one of the main reasons they ask for that, is to make sure that the house is in good condition. There are no issues with the roof or the four points. So when you say four points, just to explain to everyone, the wind mitigation is a full inspection report about the roof. That’s it. What the roof is, when it was replaced, what it was built with, and how it’s attached to the dwelling. That’s your wind mitigation. Four point is the four points of the house. It’s everything else. How old is your HVAC, your water heater, your AC unit, what kind of wiring do you have, electrical in the house, things like that.

53:40
Lucas Ramos
For carriers that do require wind mitigation and a four-point, if it’s favorable, you do get some pretty good discounts with wind mitigation, especially if you have hurricane-related discounts on that wind mitigation inspection report.

53:56
Robert Chadwick
Super interesting. I wasn’t even aware of that. Great question. The next question, which came from Facebook Live. This would be for me. Do you do credit checks in other countries for individual borrowers versus LLCs? We require you to provide your foreign credit report if available. In some countries, we realize that there is no credit reporting agency. That’s fine. There are ways to get around it. The actual score on your credit is not going to be looked at like it’s looked at in your home country. Certainly, we don’t want to see bankruptcies or recent bad issues, but all we’re looking at by asking for a foreign credit report is do you maintain US credit and whether are you responsible for your US (foreign) credit. That’s quite different.

54:56
Robert Chadwick
When it comes to individual borrowers LLCs, it’s the same thing as all of these loans will require someone to be the borrower, but the property itself can be held in an entity like an LLC. Next question. Would your program allow low mortgages against a US property to finance a property purchase in other countries? And does it apply to commercial properties or just residential? Very good question and something that we get regularly. Because all of our clients are living somewhere abroad, and this is also vice versa, they think that they can get a Norwegian mortgage to buy a US property or a US mortgage to buy a Norwegian property. Unfortunately, it’s always onshore.

55:52
Robert Chadwick
But what we do recommend is if you’re looking to buy a property in a country where maybe mortgage financing is very difficult, or if interest rates are high, you could always remortgage your US property, pull the cash out, and then use it as a cash purchase. To answer your question, no. That’s unfortunately not possible. I think that is everything, Lucas. Lucas, thank you very much for your time. Thank you for Steadily being a fantastic partner for America Mortgages. We appreciate it. And if anybody again would like to speak to anybody at Steadily or anybody at America Mortgages, there are links in the chat. You can click on it and schedule an appointment. Lucas, do you have any final parting words or anything you’d like to say before we sign off?

56:51
Lucas Ramos
And the feeling is mutual with Steadily and American Mortgages. Just so you know, that partnership we appreciate. The final words are here at Steadily, we care about your investment property. I know I do. And all the agents that are under me do. So, it’s always going to be about exposure. We want to look out for your best interest. When you start buying your investment properties and you come to us, we’re always going to discuss everything and give you all the knowledge that’s needed to make sure that you’re protected. And then once you get that knowledge, we can come to an educated decision together to make sure that your properties are insured the right way.

57:26
Robert Chadwick
Excellent. Thank you everybody for your time. We sincerely appreciate it. We will be having the next webinar which will be discussing properties in Southern California. It might be something very interesting if anybody is looking at eventually purchasing California property or looking to pull cash out from their existing California properties. Lucas, thank you. Thank you to everybody and we will see you next time. Bye.

57:56
Lucas Ramos
Have a great evening.

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Disclaimer: This transcript is AI-generated, so kindly pardon any transcription or grammatical errors that may be present.

00:19
Donald Klip
Hope you enjoyed that short video showcasing Irvine and a taste of some of the homes there. For those of you who remember, the song in the video was from the hit TV show The OC, Short for Orange County. The topic of today’s discussion. My name is Donald Klip, co-founder of America Mortgages, the world’s Only US mortgage broker based outside the US, focusing on overseas clients looking to obtain financing for US real estate. Welcome to our Realtor Talk series, where we invite experts to bring knowledge, awareness, and opportunities in specific areas of the world to our international audience.

In today’s episode, we’re very excited to have our next two guests talk about an area in the US that is not only close to my heart, having done my undergraduate degree there, but frankly, the most beautiful and perfect place to live in the US. This area is known as Orange County, which is south of Los Angeles and home to Irvine, California, which will be the topic of our discussion today. Honestly, the pictures you’re going to see in the presentation will not do justice to what it’s like to live, grow up, and of course, own real estate here. It’s truly an amazing place. Now, the goal of this talk is to bring awareness to our audience and to talk about why Irvine has been one of the most gentrified cities in the US for overseas Asians, and in particular the Chinese.

I’ll stop rambling here and bring on our guest speakers, and from time to time ask some questions or highlight key points that I may feel are important to our international audience. So please welcome Lily Lyn Ly of Realty One and Jennifer Mualim of Home Smart Realty.

05:09
Lily Lin Ly
Hi, I’m Lily Ly. I have been an award-winning realtor with over 16 years of experience. UC San Diego graduate, have lived in Southern California for 35 years, and have lived in Irvine for 20 years. I formerly worked at Yahoo, Capital Group, and New Century Mortgage. Since I’ve been in this marketplace for many years, I’ve established an extensive professional network and I also speak fluent Chinese.

05:39
Jennifer Mualim
Thanks, Lily and Donald. My name is Jennifer Mualim and I’ve been a realtor for more than four years. I’m also a UC San Diego graduate and a resident of Southern California, in particular, San Diego for over 40 years, and I have been a resident of Irvine for many years as well. I also come from a business background working for KPMG and PriceWaterhouse Coopers. You can count on me for reliable contacts within the real estate industry.

06:10
Lily Lin Ly
Consistently ranked as a top producer for Realty One Group West, a five-star rated agent on Zillow, Trulia, and Yelp, an official member of an industry trade organization, and a published author and speaker at real estate events.

06:28
Jennifer Mualim
Why is Irvine so appealing? Irvine is home to many of the biggest Fortune 500 companies and continues to attract a growing number of tech and pharmaceutical companies. Here are some examples: Google, Disney, Alteryx, and Broadcom, just to name a few.

06:54
Lily Lin Ly
there are about 44% Asian population out of which 30% is Chinese. The higher Asian population leads to more resources and businesses catered to Asians such as a variety of Asian super restaurants, children after school programs, and senior centres to name a few.

07:20
Jennifer Mualim
Irvine is conveniently located an hour away from Los Angeles Airport and only another hour and a half away from Santa Monica and Beverly Hills, an hour to UCLA and USC. So, you can see it’s very convenient. Irvine was ranked among the best places to live in America by Money magazine.

07:45
Lily Lin Ly
Irvine’s median age is between 33 and 35 years old, with many young families establishing roots here and their parents soon to follow. Irvine has excellent schools and master plan communities, with each community having pools, parks, sports courts, trails, and much more. Irvine’s residents, the city government, and Irvine Company’s main goal is to provide an excellent school system for growing families. Hence people enjoy working and living in Irvine. There are many highly ranked schools, one of which is University High School, which is ranked number 35 by US News in the Best High School in California. Some of the students here have gone on to the top Ivy League universities.

08:39
Jennifer Mualim
Living and shopping in Irvine is super convenient. No matter which neighborhood you live in, it’s a five to ten-minute drive away from the closest Asian supermarket. We are also a stone’s throw away, about 15 minutes away from the West Coast’s largest shopping mall, South Coast Plaza, where you can find your top luxury name brands such as Hermes, Prada, and Chanel. In addition, there are an abundant number of shopping and entertainment centers throughout Irvine, like a minute Drive to Irvine Spectrum Center or a close drive to the Irvine and Tustin Marketplace.

09:19
Lily Lin Ly
In the next two slides, I’m going to be talking about the Irvine housing market. The average price for a single-family house in Irvine is around 1.8 million. For condos and townhouses, it is a little over a million. It’s been up 10.9% and 8.4% year over year as of September 2023. The median rent price has also increased by about 8% and currently stands at $4,100 per month. In the local market update, we have highlighted the new listings and the pending sales have come down and it’s due to limited inventories. However, the days on the market until sale are shorter, 19 days versus 31 days as compared to last year, and the medium sales price is still climbing up. Demand is still very strong with many first-time homebuyers accounting for 27% of the marketplace.

10:30
Lily Lin Ly
Many of them are buying due to life events such as getting married and outgrowing their current space. Cash buyers also account for 29% of the real estate market.

10:45
Jennifer Mualim
on the next two slides, you’ll see what Lily just discussed. You’ll see the data and the graph of the average sales price and the days on the market until sale. As you can see on this graph, there has been a steady and consistent increase year over year in home sales and a decrease of days on the market on the next slide where most homes are sold within the first ten days.

11:17
Lily Lin Ly
This slide shows the OC Mac market snapshot and that includes Irvine and neighbouring cities. The general theme is that the medium sales price has increased year over year, the number of homes sold has decreased due to limited inventory and the number of days on the market has shortened as well.

11:47
Donald Klip
I want to jump in here really quickly and want to highlight and emphasize these points. What drives property prices, wage growth, employment growth, and quality of education? Irvine has ticked all of these boxes. As you can see, in a world that saw mortgage rates quadruple last year, geopolitical issues everywhere, and abundant inflation, Irvine saw increases in home prices. Keep that in mind. We don’t see this trend changing anytime soon.

12:28
Jennifer Mualim
In the next few slides, we’re going to show you what you can buy in Irvine. The first example here is a typical attached condo in the beautiful Eastwood community, a three-bedroom and two-and-a-half-bathroom home with a square footage of 1714 sqft on an oversized lot of 5548 sqft for this price range. It’s shy of 1.6 million. However, it sold for more than the asking price due to multiple cash offers. As you can see, the highlight of this home is the large backyard, making it a peaceful oasis for gathering with family and friends.

13:14
Lily Lin Ly
This second attached condo is also in Irvine in the Stonegate community. It’s also an attached condo, with three bedrooms, two and a half baths, 1823 sqft, and a little shy of 1.4 million. I know this house also is in the pending stage and it’s being sold for more than the list price. This is a beautiful, spacious, functional floor plan, a light and bright kitchen, and a great room.

13:52
Jennifer Mualim
Here we have a single-family home again in the beautiful Eastwood community of Irvine. It’s four bedrooms, three bathrooms, 2259 sqft on a 3496 sqft lot and the asking price is just shy of 2 million. In the pictures, you can see that it has abundant natural lighting and a spacious open-concept kitchen and living room area.

14:24
Lily Lin Ly
This property is an off-market single-family house. This is through the network I’ve established. It’s a tip from one of the realtors. I know it’s in a gated Turtle Ridge community in Irvine and Turtle Ridge is very close to Newport Beach and Newport Coast. It’s adjacent to Newport Beach. It’s a single family, four bedroom, four and a half bathroom. And what’s unique about this property is that it’s on a corner lot with no neighbors behind or to one of your sides. Its interior size is 3520 sqft on a 12,000 sqft lot. The asking price is 4.7 million. This property is just stunning and everything’s been done to the nine. You’ve got a beautiful pool, spa sitting area, and a ping pong table to the side that you can’t see here. It’s got beautiful Carrara marble throughout the bathroom. It’s moving and ready. It’s perfection.

15:38
Jennifer Mualim
Here are some examples of our client testimonials. Thank you so much, everyone, for your time. And thank you, Donald, for giving us this opportunity. We look forward to helping you find that California dream home. So please don’t hesitate to contact us.

16:12
Donald Klip
Fantastic. I don’t think that Turtle Ridge home is going to be staying on the market very long after this webinar. What a fantastic property that is. Thank you, Lily and Jennifer, for this informative discussion. Now, I’d like to introduce you to America Mortgages. America Mortgages is owned by Global Mortgages, our parent company. And America Mortgages is the only US mortgage broker outside the US, focusing only on non-resident borrowers, both expats and foreign nationals. While our registered office is in the US, our teams are based in twelve countries in the world, with our global headquarters in Singapore giving us the ability to speak to our clients in their time zone, in their language, 24 hours a day, seven days a week.

American Mortgages was founded in 2019 to address the problem of securing a US mortgage while living overseas. Fast forward to 2023. We have over 150 lenders and have created loan programs to meet the exact requirements of our overseas borrowers, which I will discuss shortly. Here’s a small sample of what makes us unique aside from being based in the US. There’s a common myth or misperception that you have to be a US citizen to own property there, that you need US credit to own property there, or get a mortgage. You need to have a bank account and be a resident. These are all myths. For our loan programs, you do not need US credit. We can accept foreign credit. We don’t require assets to be deposited in the bank accounts at all times. Foreign income is allowed.

18:23
Donald Klip
All of our loans are similar, if not exactly like going into a bank in the US and they’re 30 years fixed, which means that if and when rates come down, you can just refinance it to a lower rate. Even as a foreign national, you can get up to 75% of the property value as a loan in terms of loan to value. I’m going to discuss the loan programs, starting with our newest program, which is AM student. The reason why we’re discussing this first was that especially in Irvine, with all such brand name schools around and great high schools, which Lily and Jennifer discussed earlier, oftentimes you want to buy a home so your son or daughter or child can live there while they’re attending a university nearby, as opposed to living in the dorm.

19:21
Donald Klip
Most lenders, in fact, all lenders, will not take the mortgage payments that are coming from your child till now. So, we’ve created a loan program where we take the mortgage payment on that property and we analyze the comparable rents in that area. If the rents cover the mortgage payments, then you qualify. It’s a fantastic way for you to have a property, and have your child stay there. If and when they graduate from the university and they want to stay in the US, you can transfer the title to their name and have them build credit. Or likely, the property would have increased in value over four or five years. Or if they’re Asian, they’re probably going to get their master’s and PhD.

20:19
Donald Klip
So over the course of that time, you sell the property and you would have paid for their college degrees. This is a fantastic new program and it’s been very popular with our Asian borrowers. The next program is AM Express, and this is very similar to the AM Student. In that, we take the mortgage payments and if the rental income that you will be receiving from renting this out covers the mortgage payments, then you qualify. This is very convenient because we use the income that the asset is going to generate to cover the mortgage payments. So, it alleviates a lot of the underwriting criteria. That’s been probably our most popular loan program this year. The next loan program is AM Investor. This is your classic bank-type mortgage.

21:32
Donald Klip
What makes this unique is that we’ve created this to accept overseas income to qualify. We’ve used a way to get your local accountant to write a letter qualifying your income, and that substitutes the need to show tax returns, for example. Again, this goes up to 75% loan to value for our overseas borrowers and all of our loans that we’ve discussed today can be closed within 30 to 45 days. The way to qualify for this loan is very standard across all banks in the US. You need to have a debt-to-income ratio of at least 47% of your gross income and here’s the calculation. The next loan program is probably well suited for Irvine, California. But this is our high net worth loan program.

22:39
Donald Klip
In Asia and many parts of the world, the affluent are very busy running the factories, making money, and seeing clients. Oftentimes, they prefer to have a hassle-free experience where they don’t have to show too much documentation. And a lot of times high net worth individuals report low income because they keep their assets high. They have a large investment portfolio. Given these types of clients in Asia in particular, we created a loan program where we said, okay, you don’t have to show your income because you’re an executive and you’re a business owner. All we need to see is your investment portfolio, which all high-net-worth individuals have. That consists of your stocks, your bonds, or your liquid instruments. And we say, okay, you’ve got X amount.

23:35
Donald Klip
If you divide that by 60, which is five years, if you divide that by 60 months, if that covers the mortgage payments, then you qualify. Now what makes this super cool is that we don’t encumber those assets. We don’t say, give us those assets to sit on while you repay the loan. No. We just look at two months of bank statements from your fidelity account or your local investment portfolio. If you qualify, that’s it. No questions asked, hassle-free. That’s been super popular with our high-net-worth clients this year. And last but not least is your typical US expat. This is for a US citizen living overseas.

24:30
Donald Klip
A lot of times, myself included, you get sent overseas to work and you start getting local credit cards and you start relinquishing your US credit cards. You think, well, maybe I can’t qualify because my credit isn’t good enough. But that’s also a myth. We’ve created loan programs that are exactly like walking into a bank in the US. The only real difference here is that we accept your US tax returns. And number two, you qualify for using the same rates and terms as if you were living in the US. The difference between the foreign national loan is that the loan to value is at 80% versus a non-US citizen at 75%. The qualifying criteria are generally the same. These are standard across all banks in the US.

25:41
Donald Klip
I hope you’ve enjoyed this episode of the Realtor Talk series in Irvine. We will be dropping this video into your email soon, and we’ll be posting this across all our social media platforms. Feel free to drop me a line if you want to get in touch with Lily or Jennifer and learn more about Irvine and its real estate opportunities. Thank you very much.

26:08
Lily Lin Ly
Thank you.

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Disclaimer: This transcript is AI-generated, so kindly pardon any transcription or grammatical errors that may be present.

00:52
Donald Klip
My name is Donald Klip. I was not the original speaker. My business partner was speaking, but he fell ill. But were both co-founders, so I’ll just give you a brief background. I moved here from Hong Kong. I’m Hong Kong Chinese. Robert and I identified a gap in the market, which is international real estate financing, in particular the US. Like any entrepreneur, you have a problem, you try to solve it. In 2019, we incorporated this company. We did a round of fundraising with two Korean banks and some venture capital funds.

We have a technology arm. We’re going to be our wholesale lender by the end of the year. But Global Mortgage Group is an international real estate financing brokerage. We offer real estate financing in pretty much every country, and we do specialized real estate financing in Singapore. The pretty lady in the white dress is the queen of GCB bridge lending. She has funded $400 million to date. She is local. We do a lot of specialized lending. Our whole business is servicing private banks globally.

So if a client at Bangkok Bank says, “I want to buy a condo in New York”, they give us that client, and we arrange the financing. The client at the Bank of Singapore says, “I have a $50 million GCV and I want to pull out some cash.” They give it to us, we get the financing done. So that’s what we do. But we have a 100% owned subsidiary called America Mortgages, which is the world’s only US financing company outside of the US. It’s able to secure financing in the US.

Steve and a bunch of people have heard me say that US residential real estate is by far the best real estate investment in the world. You can’t beat the yield, capital appreciation, tax loopholes, incentives, etc. The entry cost is very low. The trouble is that it’s not something that people know about. So even though we’re focused on the financing, part of our journey is educating folks on the opportunities in the US. I’ll just give you a quick anecdote, and then I’ll introduce our guest speaker who flew here to meet all of you. There is a lack of housing in the US. Depending on where you read, there are about 6 to 8 million units short. Blackstone, which owns Vanguard in Templeton is looking to buy 60% of all single-family homes in the US.

Now, these are very smart people, maybe the smartest in the world. They know things that we don’t know, but I think they know that there’s a lack of housing. And ten years ago, you buy property, it doubles in three or four years. Those days, maybe here, maybe not. I don’t know. But we’ll be in a world where when interest rates are at 8% or 6%, the marginal buyer cannot buy. He has to rent. So, it’s only a matter of time. Every two years, when your rental reversion hits, in five years, rental yields could be 15%, like they were in the seventies. Blackstone knows this. I know this.

Steve knows this, and Hahn knows this, and Tracy knows this. But we’re here to show you why that is. So anyhow, Steve flew in from Atlanta. If anybody knows, the Southeast portion is super moving. Atlanta is the busiest airport in the world. Coca-Cola and FedEx are based there just because logistically, it’s easy to get. Also what’s happening in the US right now is that New York and California are where people go to these fancy schools, and they invent things like Facebook and Tesla and Banks and Morgan Stanley and Goldman Sachs.

But once all these companies get big, they can’t afford to have their business there, so they have to move to places like Georgia and Texas because of low taxes and low cost of living. There’s a lot of opportunity. It’s sort of new, and we’re going to educate you on what this is about. We’re going to talk to you about Atlanta, and why it’s amazing. I’m going to talk to you about how to get financing, and then we’ll sit down and have a nice Chinese meal, and we can talk about life, the stock markets, Atlanta property, health, whatever you want to talk about. So without further ado, Steve, you’re up.

06:36
Steve Kim
Thank you. My name is Steve Kim. As you can tell, the name Kim gives a lot of things away. I’m not the usual Kim. I was born in Jeju Island a long time ago. My family moved to Atlanta in 1973. Very few Asians were there, and I studied German as well. I was in elementary, high school, college, and everything in the US, in Georgia. And when I went to Germany, I was also in East Germany for a month and a half.

When I came back, I saw the world. I wanted to leave America because I grew up in the South. And I had a chance to teach English in Japan. I went to Japan in 1989, and I was in Japan for almost 30 years, and I went back to the US in 2018. And the reason I explained this is I see Atlanta from a hometown person back in 73, from an international perspective. I also know Asian business because I was in Japan for long. Back in 1999, I was working for a company with regional headquarters based out of Singapore and I was a reporter for the oil industry.

I also know many people don’t know anything about Atlanta. When I first went to Japan in 1989, they said, there was an Asian person from Atlanta. They said it’s a lot of racism. They said, what do you know about Atlanta? They said, oh, Coca-Cola, CNN, and gone with the win. And that’s the image of Atlanta. In 2019, they had the Super Bowl in Atlanta. That’s the American football. I was in Tokyo at the time. I’m sure, even though you don’t know American football, I was in Tokyo American Club. They watched together. Aussies, and Germans, watched Atlanta. So what did they talk about in Atlanta? Coca-Cola, Olympics, and Martin Luther King. Coca-Cola is not even in the top ten companies in Atlanta, but people see it as a brand. The biggest company is Home Depot in the top ten. Has anyone been to Atlanta? Please don’t say just the airport.

09:25
Audience
No, but a long time ago when I was a teenager.

09:27
Steve Kim
For business?

09:32
Donald Klip
Trust me, Steve was there.

09:37
Steve Kim
Not so long ago. So most people don’t know Atlanta. So this is the thing I wanted to explain.

The hawks are there. You have Hollywood. I’m talking more about Georgia in general. I’m going to skip around a bit just to show you this is where we are. This is Florida, Alabama. South Carolina, Tennessee, Mississippi. And everyone knows Texas. I attended this conference in Tokyo last week. It’s called SUS, southeast US. Seven states came together with Japan and all the businesses we had in Tokyo. Last year it was in Florida, and next year it’s in North Carolina.

We talked about all the growth that’s happening. The reason I want to show this is you see most major cities in America are built around the water. And prices go up because there’s scarcity. You can’t build more property in Singapore. You have oceans. But in Dallas and Atlanta, we don’t have an ocean. So the property is cheap. That has kept the prices down. Even Phoenix. You saw Lake Denver, and last year the fastest-growing city was Boise, Idaho. But the one that’s crashed the most this year is also Boise, Idaho. You have to understand this. Why do the prices go up, why do they come down? But things are changing in America. Did you know that California is the fifth-largest economy in the world?

US, China, Japan, Germany, California. California by itself has the fifth largest GDP. But the seven states, are bigger than California. We have $3.116 trillion. So we’re the biggest economy together. We’re the fifth-largest economy in the world. I don’t think you’ve been to Alabama, South Carolina, North Carolina, Tennessee, or Mississippi. Maybe Florida or Georgia. So you can see Florida is 1.1 trillion. Georgia is the second largest. But Atlanta is the hub of all. We’re like Singapore. Your regional headquarters are here. Oil companies and their regional headquarters are here.

Because an area is growing so much with development, it needs a regional headquarters. So they’re doing it in Atlanta. They’re not doing it in Tampa, they’re not doing it in Miami. As you can see these are projected by the demographic research Group. That’s Georgia. It’s right here, the 8th largest. Florida is also very big and Texas is already very big. This is the population total. But right now, Georgia is the 8th largest. But it’s going to jump up. This jumping up is very big. These are very famous cities. Tampa, Orlando, Jacksonville, Savannah, Charleston, Augusta, Nashville, Memphis. They need a regional headquarters. So they’re coming to Atlanta. We are becoming like Singapore. Even if you have a factory in Charlotte, Memphis, they need a headquarters here. So it’s becoming a very strange market. We are having development like construction and we are manufacturing. We also have a lot of white-collar regional headquarters. These are some of the major companies. CNN headquarters. Chick-fil-A is also a big brand.

By the way, feel free to ask me any questions. We’re small enough that you can stop me. 31 America’s largest corporation is headquartered in Atlanta. That’s not in Miami. Miami is more financial. Atlanta has 31, like I said. When people think of Atlanta, if you look up in Wikipedia, Atlanta has 500,000- 600,000 people. But metro Atlanta is 29 counties and we have over 6 million people. It’s more than the population of Singapore. So when they say Atlanta, be careful. They are talking about just this inside Fulton County. But the actual area is much bigger. The cost of living is pretty low. Dallas is also very good. This is an interesting thing about this population. 13.8% are born in Northern America.

I’m Korean American. There were very few Asians when I was growing up. But now the Korean American population in Atlanta is the second largest in the US. We just passed New York. New York is a much bigger city. LA is in Atlanta and the Indian population is even bigger. The reason they moved down there is because easy to do business. They’re coming from LA, Chicago. When I was there, we had less than 50 people. Now we have over 150,000. The only thing that I don’t like is they live in one area. I don’t know if you know H Mart. We have more than LA. So there’s a lot. We have, I know it’s a silly name, the Great Wall of China supermarket, but generally, it is still white or African black, basically African Americans.

But we grew the Asian population by 50%. And that’s because of the opportunities there. This is my information. These are the universities. We have over 270,000 students. That is very important for the workforce. We also have a very huge Indian population because of Georgia Tech and Emory University, which has the CDC. You can watch zombie movies, you will see the CDC.

16:59
Donald Klip
It’s also known as Harvard of the South.

17:01
Steve Kim
Yeah, but we need them for the high-tech job. These are the types of homes you should have bought back then. 2019, when you started, you should have bought it. But this is not just Atlanta. A lot of places have increased. The Hatfield is very good for rentals. We have the second-largest film industry in the US after Hollywood. But as far as location shots, Georgia has more location shots than California and 40% still come from outside. We have a lot of short-term rentals for the film industry. We used to call it A list, but now we call it tier one, tier two, tier three, tier four. Like the photographers, and makeup artists, a lot of them have to stay in Atlanta for four to 16 months. And that’s a very good short-term rental opportunity.

Ozark, Avengers, Walking Dead. This is the real recent news. Have you heard of the Inflation Reduction Act? The US and China are not getting along very well. So if you build EV vehicles or clean energy solar in the US, you get a lot of government help. So especially Korean companies, Japanese companies, and German companies are building in the US a lot. This is where they are. Planning and construction, over $50 billion investment. This is going to be very important for housing. We need workers. We need high-tech workers.

18:55
Donald Klip
I’m just going to interrupt. So the workers, are they hiring locally or are they bringing sort of overseas? Like if Hyundai is setting up the EV factory, are they bringing 1000 people from Korea to be based in Savannah?

19:10
Steve Kim
Yes, Hyundai is right here. It’s a $5.5 billion factory they’re building right now. I spoke with SK in Korea. Hyundai by themselves are going to bring 500 expats. They’re not buying houses. They’re renting because it takes them five years to train for the deadline. LG, 4.3 billion. SK, 4 to 5 billion. We’re not talking about the tier three, tier four suppliers. Rivian, which is a US company, 5 billion. We call this the battery belt. Georgia, Alabama, but mostly Georgia, South Carolina, Tennessee and North Carolina. There’s going to be a lot of foreigners coming to Georgia. This is not a small business. EV, from what I understand, is more high-tech. It’s not a cheap job. I showed you the university. It’s very important. They need more housing because even just this one company is creating 5,000 jobs. Where are they coming from?

So there’s going to be a lot of opportunity here. Qcells is the largest solar panel company in the Western Hemisphere. A lot of Korean companies are coming. Atlanta is not a tourist state. When they go to America for two weeks, they don’t stop by Atlanta. They go to Disneyland, Miami, the Grand Canyon, Washington, DC, and New York. So most people don’t know Atlanta, even though it’s a major city, but it’s a very nice city. It’s a great climate. We have mountains. In 1996, the Olympics came to Atlanta. And from 1996, people who would not come to Atlanta came to Atlanta. So the population grew. The film industry started here. People from LA came to Atlanta back and forth, so they started buying houses. EV boom. They’re building right now. The most recent one, was last month.

The US soccer, I think you call it football, is coming to Atlanta. They’re coming from Chicago to Atlanta. And they’re not only coming to Atlanta, they’re building the National Training Center, 23 fields. So the next World Cup is in North America. Canada, America, Mexico. And because our training center is going to be in Atlanta, I think a lot of people will come from overseas. So they will come to Atlanta for the first time. And I think a lot of people will stay because Atlanta is a very good place to live. The temperature is great. This is the Mercedes Benz stadium. This is where one of the World Cup host cities. We do have the Masters if you like golf. This is not Atlanta. This is Augusta, Georgia. But it’s the most famous golf tournament in the world. This is the PGA Tour championship. This is in Atlanta. Everyone likes golf. I do want to show you one thing about Atlanta.

Remember I told you about the water waste? You need water. Water is important because it creates scarcity. Atlanta and Dallas, especially Dallas, have mountains at least, they just keep going. But what happened is this is a highway called 285. And inside 285, because of some civil rights or racial issues, this place went downhill. People did not want to live here. Too dangerous. Bad place. But because the city has grown, this area is becoming very popular. But below this highway, it’s still a little bit rough. I was in Manhattan back in the 1980s. It’s terrible. Good areas now are terrible. I think if I live a long time, in history, this is going to get very expensive. It’s already very expensive up here because everyone wants to be inside this I285. We even have a word ITP, inside the perimeter. OTP, outside the perimeter. Has anyone been to Tokyo?

Do you know the Yamanote line? Inside the Yamanote line is much more expensive than outside. It’s not because it’s any better, it’s just very expensive because people want to be inside. They want to say, “I live inside.” It’s the same here. There are a lot of opportunities here, but it’s rough. Imagine this is the ocean and this is inside because people are vain and they want to be in a nice area. I can talk about this, but I think this is a really big project in Atlanta. This is 22 miles loops, which is 35 km. Also, they’re making this loop so you can walk and cycle. And this is the largest project in the US. If you want to be near this area, it’s also very good. I’m finished with this. I just talked about why Atlanta is a good place to invest.

Here are some properties. These are actually for sale, by the way. There is only one left. This new construction is brand new. They’re building it right now. The price you see the price. And for this one, I think this one you can get 3200 in rental. You do have an HOA fee of 200, but for the price and 3200 in a very growing area in the construction, this is an excellent investment. Brand new. Here’s another one. It’s an older one. This one’s very old. It’s about 100 years old. This is a short-term rental and they are selling all the furniture together you can get 2200 after all payments of utilities, and management fee, but I think you can get a little bit more.

And this is the third one. You can get about 1900 in rental. The price is 214, 900. Smaller. So they asked me to give some samples. Just because the cash flow is good doesn’t mean it’s always the best. It’s my thing. I think appreciation is the best. Even if the cash flow is not so good right now, I told you they’re getting better and better. If you are thinking long term, like ten years, which I hope you do, I think appreciation is key. If it appreciates, rent will increase for sure. You can always refinance in the future. For me, that’s all I have. If you have any questions, even while we’re eating, feel free to ask. I hope you ask more questions, but in the meantime, I think Donald’s going to explain a little bit about how to buy these homes, and how to finance them.

29:05
Donald Klip
So for those of you who came a little bit later, I’m the co-founder of a financing company that finances international real estate. One of our core strengths is US residential real estate, where we’re the only place in the world outside the US, where you can get a mortgage for the US. Most people don’t know that 70% of all mortgage origination in the US is through wholesale lenders and not banks. So, JP. Morgan, Bank of America, Wells Fargo. That’s 30%. The other 70% are wholesale lenders. The most famous wholesale lenders are Rocket Mortgage and Cricket Loan. So those are mortgage originators that give you a loan and they sell it to GIC and BlackRock. This is a snapshot of the types of loans that we do. Of course, there’s no US credit required. We don’t require opening up a private banking account.

We allow foreign income so you can show your Singapore income tax returns. Loans available in all 50 states up to 75% loan to value. We close it no more than 45 days sometimes. We’ve been known to close the loan in 20 or so days. We can sign all the closing documents in your country. These are purchase, refinance, or cash-out equity. And they’re 30-year fixed-rate mortgages regardless of your age. So in America, you cannot discriminate against anything. So if you’re 100 years old, you can still get a 30-year mortgage. That’s the truth. Now, the good thing about the US is that it’s the only place in the world, and I think this is important to understand. We just had a meeting with a developer and realtor in Irvine, California.

Irvine is like where all the Chinese have moved to in California. Interest rates went up 300% last year and property prices went up 15%. My point is, that the US is the only place in the world that has 30-year fixed-rate mortgages. No other country has this. And the reason why that’s important is that it’s the only product that insurance companies can buy to hedge their liability. So insurance companies, sovereign wealth funds, and endowments have to buy these mortgages because it’s the only thing that you fix for 30 years. A good thing for us is that to finance a property, you can get a mortgage now at 8% for 30 years fixed. But next month, if it’s 7%, you refinance it down for 30 years for 7%. And in 2005, when it’s 6%, you refinance it at 6% for 30 years.

No penalty. For you, my friend, no penalties. The penalties usually are months because the lenders need to sell the loan to the end buyer. Last year during COVID interest rates fell a lot, and all of our business was refinanced. So anyhow, we approved 97% of our loans. And we also have loans, which I’ll get into, that are based on the rental income of the property. These are loan programs. We have three or four. So AM express, we call it the Rico program (Rental income coverage ratio). So basically, we don’t look at your income, we look at the rental income of the investment. And if it covers the mortgage, you qualify. This is probably our most popular program.

If you don’t need to show your financials and your bank statements, you’ll still qualify. It’s much easier if I could qualify above. This looks like a commercial loan, like in commercial real estate financing. You finance a shopping mall, you get some rental income, and then that’s what you base that cash flow on. This is a residential version of a commercial loan. No minimum deposit is required. The loan amount can get quite small as well, and no personal income is required. So this is the most popular loan program in the US. So if the rental income covers the mortgage payments, right now, because interest rates are high, a lot of people can’t buy. So they’re forced to rent. And so the rental income acts as it’s like an option on mortgage rates. So as mortgage rates go up, rental income goes up faster. This has been popular for us.

The next program is an investor. So this is your basic mortgage program. We created this program ourselves with our US bank, where instead of showing your income, you get an accountant to say, “Hey, Hahn made this much money a year and signed it.” Hopefully, it’s true. “So you don’t need US credit. No tax returns are required.” It’s the same type of terms. Except this is based on your income and not the income of the property. This is what everybody in the US gets. It’s called a BTI. If your income is 47% of your mortgage payment, then you qualify. So that is just your traditional US type of mortgage. Again, we’re the only place in the world where you can get this outside the US.

for those of you who joined a little bit later, the holding company, Global Mortgage Group, our whole business is servicing banks. Our clients are Bank of Singapore, and private banks globally. The reason why that’s important is that when a client in Bangkok says, “I want to buy a $5 million condo in New York”, they give the client to us and we finance the loan. This has been one of the most popular loan programs for high-net-worth individuals because they’re busy making money and they just don’t have enough time to show all the financial statements. This is super cool. They look at your stock portfolio or liquid investments and they say that if that balance divided by 60 covers your mortgage payments, you qualify. Your monthly mortgage. This means that this is particularly for bigger loans. It’s cool.

If you have a fidelity portfolio and you have $6 million in a portfolio, you divide it by 60 and you can qualify to get a 100,000. I can’t do the math. But anyhow if you have a portfolio of $5 million, divided by 60, average income of 80. So your monthly mortgage is 80, which is a really big house. You qualify. This has been popular because it’s hassle-free. You don’t need to show too many stuff like that. The more important thing is that the lenders don’t encumber any of those assets. They’re not going to say, give it to us, margin call and all this stuff. They just need to look at it, verify it’s real, and qualify. We invented this. We worked with a US lender to create this. This is your basic US expense.

If you’re a US citizen, and you’re living in Singapore, this is the same as you would get in a bank in the US. Except that we’re here and you don’t have to spend calling banks at three in the morning. We’re here, we can have lunch with you. Are any US citizens here? My parents moved from Asia, from Singapore to the US when I was in high school because they wanted me to go to college and be a doctor. My parents moved to California, and I studied to be a doctor in Los Angeles. But like every Asian family, especially if you have a daughter, you don’t want your daughter to stay in the dorm to meet American boys and do naughty things. So you want to buy a condo so they can stay in the condo.

The trouble is, a lot of lenders won’t accept. You can’t say, “Well, my daughter’s paying me rent.” But now you can. So what we do is your son or daughter stays in the condo, and then we look at the average rent that condo should make. And if that average rent covers the mortgage payments, then you qualify. So this has been popular because my parents did this. Your kids go to school at Harvard Stanford Boston or New York. You buy a condo. After four years, you hope they don’t meet somebody and say that you want them to come back. But after four years, the property price goes up. You can sell it and pay for the university. Or if they want to get a job at Goldman Sachs or Morgan Stanley, you can say, “Well, now you can stay there, and I’ll transfer to your name. And now you have credit.” Because in America, once you have credit, it’s everything. So this has been popular. We’ve been working with education consultants to offer this program. This has been popular. That is a super short presentation on what we do. Let’s spend the next hour or so just talking about the US real estate market. Tod and Tracy are local experts in this area. My friend here, as soon as he came in, said, “Listen, I just want numbers. You can give me this return, I’m going to buy it.” So, let’s talk about this.

41:58
Donald Klip
I know, Steve knows. But there have been Chinese properties, like in Shanghai, Beijing after 2001, of course, everything went up. In Singapore, between 2005, and 2010, property prices doubled. In every country, you have this type of cycle, but it doesn’t last forever. But rental yield lasts forever.

42:31
Donald Klip
So if you do the math, 50% rental yield, you still double your money in five years. But in the US, because of lack of property, as Steve said, there’s $50 billion of EV companies moving to Atlanta. These people need to live somewhere, and they can’t afford to buy. I’ll say one thing. For those of you that came a little bit later, Blackstone is trying to buy 60% of all single-family homes in the US. These guys are smart. They’re not doing it so they can make a 4% return. They’re doing it so they can make 10%, 15%, 20% return because there’s lack of homes. And there’s a lack of homes because after the financial crisis, a lot of home builders, just like other industries, were focused on share buybacks, propping up the share price. They weren’t investing in building as many homes as possible.

43:30
Audience
Excuse me. You’re saying there’s a lack of property, but I think there’s a lot of construction going on at the moment.

43:39
Steve Kim
I will say this. Even though Blackstone wants to buy 60%, all the hedge funds together represent less than 10% of all. Most of the owners are people like you. Do you know why they got into this business? Before Blackstone, BlackRock, and all these people were purchasing multifamily apartments, hotels, and malls, because they did not want to buy one house at a time. That just doesn’t make sense for them. What happened was in the 2007, and 2008 crash, all these homes came on the market, like Foreclosures and Berkshire Hathaway. Warren Buffett said, “If I could buy anything, I’ll buy it. But the problem was who’s going to manage properties?” So what happened is they bought these properties, and people like Excalibur, these property management companies, all they do is manage the property. And they were bought by Blackstone because now they can buy 500 at once, but now they can’t buy anymore.

44:48
Steve Kim
That’s not that many houses and foreclosures. How are they going to buy 60%? There’s no way. So a new genre, basically built to rent, started. We just build a whole community ourselves, and we’re going to make it all into rental. So this is the progression. But the thing is, right now in America, people think we have to own our home. But most people in Asia, when I was in Japan, I never had a dream of owning a home. It’s fine. I can rent. Most of Europe is the same. But right now in America, I think owning a home is key. But to be honest, not everyone wants to live in an apartment. And those expats in Savannah, they’re not going to buy a house. Canada is not going to allow them to buy a house. Atlanta is going to be like New York.

It’s going to be a renter city because prices are going up so fast that they can’t afford to buy homes. There are 270,000 students. They’re not going to buy a house. After you buy a house, it’s really when problems or success starts. So numbers are great, but it’s not met if people are living there. What if they don’t pay? You got to kick them out. You have to evict them. So the property management side of it is also very important. There are strategies. For short-term rentals, there’s section eight. There are many kinds of strategies. I just know that in Atlanta, in five to ten years, even Savannah is going to be a very difficult city. So you have to buy it in an appreciation market.

46:24
Donald Klip
When you own real estate, obviously you want to own a roof over your head, but you either want a trophy asset, which is a pied-à-terre. Like I have a place in New York. It’s cool. New York properties don’t make money. Or you want to own real estate for investment purposes. And the entry points are really low in the US. Like $200,000, $300,000, or $400,000, you can get something that yields 10% to 12% gross right now. But that could be net in a few years.

47:00
Steve Kim
last year the fastest growing city was Boise, Idaho. Because all the Californians were skinking. But the one right now going down the fast is Boise, Idaho, and Austin, Texas. Because there are two or three different markets. There’s the cash-flowing market, that’s not appreciation. Just like Detroit, the Middle East, and the Midwest. New York, and San Francisco, these markets are very trendy. You can go up and down. So if you can time it right, you can make a lot of money in San Francisco, but you have to time it right. But Atlanta, Dallas, and a few cities are stable. It’s a high-interest rate and a high cash flow. Not the best, but also appreciated.

47:48
Audience
I want to add that whatever cities, that you mentioned, Dallas, and Atlanta, are all cash-flow and appreciating markets.

47:58
Steve Kim
It’s not the best cash flow or best appreciation.

48:01
Audience
So your risk is very hedged because if you buy in an appreciating market, it goes down. You have to wait many years to see appreciation. Meanwhile, you’re losing cash flow.

48:11
Donald Klip
Why do you think markets will appreciate?

48:20
Audience
Population, jobs growth. you heard that a lot of places are being constructed. A lot of times news is local. So there are places where we could see over-building construction, like Austin, and Dallas. There are other places, like maybe Atlanta, that may not be seeing overconstruction.

48:55
Donald Klip
If you look at working from home, it was growing at 5% per year. COVID accelerated that. So eventually 20, 30, 40 years, 50 years of that, it’s all going to be hybrid, whatever. But even now, the way jobs are populated or defined, guys aren’t working at a bank or company for 50 years, 30 years anymore. They’re at home. They need to drop shipping on Amazon or do things on TikTok. And they require an additional 100 square foot demand on their rental place. There’s this phenomenon of this additional rental square footage requirement because people are now at home more doing content.

49:55
Steve Kim
The thing is the Southeast, not just Atlanta, Atlanta is the hub, but also a very good investment in Huntsville, Alabama. It’s not sexy. No one says I want to invest in Alabama or Charlotte, North Carolina. Nashville is very sexy. But the Southeast is an area that people don’t know very much. The reason Atlanta is growing is because it’s very young. Most people are not from Atlanta. New business can be started very quickly. It’s hard here in Singapore. Terrible in Tokyo to start a new business. You have people who are already entrenched. You have everything here in Singapore. New business is hard. If you start a roofing company, you can make a lot of money. If you are a dentist, super. Because I was telling you I had some dental problems last year. If I am late 30 minutes, I have to wait another month and a half to get an appointment because we can’t outsource medical stuff.

There’s so much population growth. That’s why the Koreans are the second most. They’re very entrepreneurial. They’re coming from LA. And there are so many new people coming in that it’s going to become a renter city in the state. Because like the 285, there’s finite space. You need finite. People want to live inside. Well, there’s only so much space. We have a lot of problems if we have the zoning issue. Zoning creates scarcity. They won’t let you build up so much. In ten years, it’s a very different city. So I think Greenville and Huntsville are also very nice. Everyone knows California. Everyone knows Hawaii, New York. You’re not going to compete. But everyone still goes to New York. They still go to California. Go to the unsexy places. That’s the key because you have less competition. But as long as it has population growth. Atlanta is a beautiful place. We have Blue Ridge mountains. We have baseball, the NFL, and the NBA. They’re rich people.

52:18
Steve Kim
Don’t go to the sexy. Come to Atlanta. You’ll see that’s why they came in. We have a lot of greenery. It’s 6 million people and it’s growing. We passed New York for a reason. We have a big international community. We’re just far away from Asia. We have a lot of Germans. Japan is the largest foreign direct investment followed by Germany. But we are the hub. We have Delta. 26 years, the busiest airport in the world except one year went through COVID. We have a lot of franchises starting. I hate to say this since you’re not from America, but I can say a lot of people, generally in America, are not that smart. But they’re smarter than Atlanta. All the smart people come to New York.

They see opportunities that the locals don’t. If you listen to podcasts, a lot of people become financially wealthy through real estate in the US. They’re always all very aggressive. They’re not that passive. If you’re busy, passive is fine. I like to focus on appreciation, not because I know it’s going to be appreciated, but because I know the population is growing. I like to buy near a big complex because they know way better than we do. They spend so much money to research an area. So if they’re building in that area, if Hyundai is building in that area and putting in $5.5 billion, I want to be near that area.

54:19
Donald Klip
Capital appreciation is based on three things. It’s population growth, employment, and wage growth. So population growth can be defined as organic population growth, or it means people can move there. Places in California people moving there, and immigrants moving there. But here population growth is these big factories are moving there because Tesla or Hyundai is moving. Because it’s the busiest airport in the world, it’s a hub for all these different places. FedEx is in Nashville. But it’s there because it’s a hub globally. That is what drives price appreciation. It’s employment growth. It’s population growth, which we have because people are moving there. And nowadays, employees have more control over wages. They have sports. Now, the players can argue what they want to make.

55:31
Steve Kim
And there’s two things. Those southeast states are what they call right-to-work states. Meaning for companies, it doesn’t sound good, but it’s easy to fire people. A lot of companies want to go there where it’s easier to fire. Also, it’s tenant-friendly. All of the southeast. Texas, too. If you want to kick out someone, it’s easier. It’s not 100% easy. They’re landlord-friendly. In California, if they don’t pay, you cannot kick them out or you cannot raise the rent. No place in America is 100% landlord friendly. Because even if you win, sometimes you have to wait for the sheriffs to come and take them out. And because of COVID, everyone’s behind. But you do not want to invest in a state that is tenant-friendly.

56:28
Donald Klip
So one thing I also add, some of you know more about the US than others. Some of you may have invested in US residential real estate or real estate elsewhere, but I think you said this perfectly, my friend. You said, I just want to know how much I’m going to make at the end of the month. We have partnered with property managers. Steve has a property management company. But I want to buy something under my name freehold in the US, and rent it out. I’m going to make this much a month. It’s going to sit in a bank account and then the property price is going to increase 5% a year. That’s all I need to know. If you want to find the highest rental yield maybe in Detroit Cincinnati or Cleveland, it’s tougher because they may not appreciate as much. But you need positive cash flow. But, you know there’s these macro drivers that are pushing into that area. That’s what we’re trying to do: educate all of you. It’s not that difficult. We’re focused on financing, but we realize that what we need to do is also educate people. When people say the US, they think Trump, guns, taxes, unfortunately. The funny thing is some of that is true, but the taxes are not true. It’s tax-efficient to set up an LLC, you can deduct a plane ticket to the US to go look at the property. You can deduct your laptop and all sorts of different things. And in fact, we have property in the US. I’m always learning something new. Steve was telling me that in the US, they have an opportunity zone where if you buy a property and double the value in the renovation, after ten years if you sell, you pay no capital gain tax. There are a lot of opportunity zones.

59:20
Audience
It’s all in the master plan for the city.

59:23
Steve Kim
And if you buy an opportunity zone, you know money is flowing in. If you know the local knowledge, I know this is an opportunity. I know it’s going to go up. Is it going to make a lot of money in your first year? I don’t know. No one knows. I don’t know what the interest rate is going to be next year. No one knows. But I know people want to make money if the opportunities don’t give incentives to do it. And then people are coming in. Do you know why? If you know about the Southeast. Let’s give an example of Alabama. Most people probably have a very negative image of Alabama. It’s crazy, people have guns and banning abortion. But you have to put that mind outside. You don’t live there. Alabama is not a bad place. It’s a beautiful coast, but living in Asia, we have a very negative image of America. But most of the money is made there.

01:00:34
Steve Kim
I was there in Tokyo, southeast US. Alabama was there. North Carolina, Toyota factory is bringing a $7 billion EV factory there and he has to hire thousands of people, train thousands of people, and get paying jobs. So they’re not building in California. Everyone’s escaping California. But now California is not bad. It’s a beautiful place. But not a lot of California people are investing outside because it’s better value. If you want to live in California, it’s great. But you’re not living in Alabama. If you’re moving to California, it’s great. The one with the students, that’s a fantastic one. My older brother and his daughter, he said, “I wish I had bought a house for my daughter. Because she would have bought a house and she would have brought in other tenants.” So we call them house hackers. You buy a house, she lives and she brings a roommate. The roommate pays for the mortgage. America is very easy to make money, I think, after having lived in Tokyo for almost 30 years. Hahn, where do you invest?

01:01:58
Audience
Ohio.

01:01:59
Steve Kim
Where?

01:02:00
Audience
Columbus. Cincinnati. I agree with you. Appreciation is slow there. But we are going for cash flow. We do force appreciation. So we buy distressed houses. We create our appreciation so we don’t rely on the market to appreciate.

01:02:21
Steve Kim
That’s another thing. Forced appreciation means we can do it. I can help you up to a point. You buy a thing and you can renovate and make it go up. You force that appreciation. Columbus is a good market.

01:02:40
Audience
Don’t tell people.

01:02:43
Steve Kim
I know. I look at all the markets. Columbus is also good for cash flow and appreciation. I do know this. I know some agents there because Honda is there. It’s in Dublin. A lot of Japanese companies are there with research. So, you have the expensive and the cheap. I’m not just saying Atlanta is good but Columbus is unusual but the weather is terrible.

01:03:06
Audience
But we don’t say that.

01:03:08
Steve Kim
But Columbus is a good market too.

01:03:11
Audience
Intel is going there.

01:03:12
Steve Kim
Yes, intel is going there. As a semiconductor. That’s something called the CHIPS Act. There’s a chipset and that’s bringing a lot of money. Yeah, that’s a good market. I know Atlanta very well.

01:03:32
Donald Klip
You just have to I mean, hard to tell you that they’re sort of full-time experts at this and we’re all part of this Singapore consortium to preach the benefits of investing in US real estate. You look at these UK properties and Australian properties. Australia may have made a little bit of money but none of these UK properties make money. Singapore is so expensive, it’s easier because you can drive there, but the entry point and the yield are really low.

01:04:20
Audience
So I think Steve made a very good point that I resonate with always live where you want to live and invest where it makes the most sense. Invest where it’s decent enough for you and there’s enough appreciation that there’s to be whatever that you project to, and that’s when you make the most money as opposed to investing where you live when the numbers don’t make too much sense. Like, maybe California, or Singapore.

01:04:49
Steve Kim
I knew Columbus was good. I’m always looking at comparing. I don’t think Columbus is as good as Atlanta, except it’s a smaller area. It’s not going to appreciate as much as Atlanta. Because Atlanta is going to be a major city. But in the short term, the next five years, depending on where you buy in Columbus, where you buy in Atlanta is also very important. So, real estate is very local. I know it’s a good market, but not everywhere. You have to know the insight. Remember I told you the 285? No one’s going to know. I don’t know some things and I don’t know much about Columbus. I was in Columbus for my brother’s wedding. That’s it.

01:05:37
Audience
So usually the south has a lot more population growth because the weather is a lot better. And on top of that, Atlanta is business-friendly. The government promotes businesses to go to Texas and Atlanta. The governments proactively go to other states and pitch to them to set up businesses in the city itself. So that when the company sets up the businesses there, they will hire people either from abroad or locally. But when they hire people from another state, they will come in with a higher income. So this pushes up the income level, which Donald said, that it’s population growth, job growth, and wage growth. So that’s when you bring in high value-added jobs, and that’s when the wage grows a lot. And then this has a lot of collateral trickle-down effect because when these rich people spend, they spend, they buy Starbucks, they buy all the different stuff. There are a lot of benefits because the local economies also benefit from these high-income wages spending. Then the whole neighborhood just gets better and better. So just now Steve mentioned the circle People don’t like it in the middle because it’s older stock and people like the newer property. So, they moved out. But with whatever’s happening right now, people want to live near the city like Singapore, Tanglin, and Orchard Road. People want to live near the city. It’s very chic. And the properties are so cheap, so people just buy the older properties, renovate them, and force the appreciation. And that’s when there’s a lot of wealth that’s being built. You could buy the property, do the renovation, or get a loan. You can get a red coal loan. And then after that, do cash up, refinance, and take out your initial capital investment from the property. The property is free, and it’s free because there’s no money in it anymore. You did not put any more money into it because you took it out from a loan. And then after that, it is still generating rental income for you. And that’s what we managed to do in Columbus. But Atlanta has a lot of opportunities for that.

01:08:06
Steve Kim
A lot of people know, but they call the BR method (buy, renovate, rent, refinance, repeat method). It’s not as good as before because the interest rate is high. But don’t worry about the interest rate. The reason I say this is no one remembers if you bought a house in San Francisco 30 years ago. Doesn’t matter what the interest rate was. You would have made money. The thing is, you have to find the three things. Job growth, population growth, wage growth. Those are the three. If those are not there, I don’t care if the cash flow is great because it’s going to be stagnant.

01:08:55
Audience
30-year mortgage, 8% interest.

01:08:58
Steve Kim
But you can refinance.

01:09:01
Audience
When rates go down, you can refinance.

01:09:02
Donald Klip
Just give an example, California launched something like the Home Buyers Assistance Program. The state was helping first-time buyers with the down payment, and it wasn’t much. It was a $300 million program. It was taken up in a week and a half. Everybody could have qualified for a mortgage to buy it, but they were waiting just for a 5%. If you look at cash flow, why do we buy Apple Computer at 35 times earnings? Because it’s growing. But if you think about property, if the interest rates are at 8%, it’s expensive. We all agree. But I bought my first house when interest rates were at 7% in 2005. Yeah, refinanced on the way down or whatever.

If interest rates go from 8 to 7 to 6, prices are going to go up because there’s a lot of people on the sideline. So if you go from $100,000 home, 8%. In 2005, if it goes to 6%, and the property goes to 120, you’re paying more in your mortgage payments. And you can refinance down. During COVID, just like in Singapore, you couldn’t buy the house you wanted because. We always say you date the rate, but you marry the property. You find the property that you want, because of the rates, you can always refinance, and there’s no penalty. I mean, there’s a little bit of administrative stuff, but there’s no prepayment penalties.

01:11:14
Steve Kim
Think about this. Do you think one dollar now is going to be the same ten years later? It’s going to be worth less. But your payment is the same.

01:11:29
Donald Klip
Apple Computer has so much cash on the balance sheet, but they decided to raise debt financing last year. Why didn’t they do that? Because they know at 5% inflation, their debt is that if you raise $100 million, next year, that debt is worth $95 million. Because inflation will erode it. We saw a little bit of this in Singapore. During COVID, we experienced a lack of supply, and a lot of people coming in. What happened in Singapore is the same on a not-so-aggressive scale in the US. It’s happening everywhere.

01:12:17
Audience
One more thing. When you borrow, you have interest expenses, which can reduce your taxes.

01:12:24
Audience
I think there are two types of mortgages, adjustable rate and fixed rate. I think most Americans currently have a fixed rate.

01:12:43
Donald Klip
Right now, we’re still seeing more fixed rates from foreign buyers just because they know they can refinance. When interest rates were low, people wanted that adjustable rate. They wanted the max because they were looking to buy and sell in five years. To be fair, you should not look at property like equity. That’s not normal behavior. Some people did well, but the way to look at property is more like fixed income. It’s it gives you some cash, and it goes up in value slowly.

01:13:32
Steve Kim
Does anyone else have some questions? I have a question. What keeps you from starting? is it hard to start? I guess it is hard to start.

01:14:01
Donald Klip
I started something new this year, which was short-term investing I started with my sister, but it took me a long time. Buying property, you buy and it’s easier to start. But if it’s such a foreign concept, you need people like Hahn, Tracy, and myself, to walk you through, and educate you. Where do I set up an LLC? Which is a good accountant? What type of insurance deposit? It’s like anything like going to the gym or learning a language. Everything takes about six months, and then you get used to it. Okay, I get it. I know the lingo. We found that everybody understands the UK, and Australia because it’s a Commonwealth system, commonwealth law. If you are investing, you should be irrational about where the opportunities are. Like, I hate guns, and I’m very anti-guns, but would I buy Smith & Wesson stock? Of course, I would. I don’t have an emotional connection to making money. I still wouldn’t buy the stock.

01:15:38
Steve Kim
Remington just started to move the headquarters to LaGrange, Georgia, near Atlanta. I think even UPS didn’t start in Atlanta. By the way, Hahn probably knows it’s not 100% passive. It is some work. Don’t think like I bought it, show me the money. No, you’re going to have some problems. Can you find the right tenant? I work with you after you buy the site. That’s why I can’t do Columbus because I don’t know. On the Atlanta side, you can do it. Property management, something’s going to break. For some reason when you buy a new house for you, something always breaks at the very beginning. For some reason, something goes wrong. Inspection, everything’s fine. You buy the house, pipe breaks. I have to pay money to fix it. But it’s not like we’re buying a stock. But again, if you buy an Apple stock, you can’t call Tim Cook and say, “Hey, I have an idea.”

You can control your property so you have more control of your investment. But don’t think it’s 100% passive. Unless you’re doing a fund or a syndication, it’s not 100% passive. But you learn. Like you said, you have to learn. You don’t have to quit your job. But it will take a little bit of time. But it’s not rocket science. People do it. But some people think I buy a house, give me the money. But there is a little bit of work.

01:17:27
Audience
And the good thing is, for example, he has a property management company. So as long as you do your math properly and you account for paying the property manager to do the work, you have even less work to do. But like what he said correctly, it’s not entirely passive. But if the rent is 4000, how much do you have to pay and work for a $4,000 job per month compared to buying a property that pays you $4,000? It is not entirely passive, but it is an upgrade compared to a job.

01:17:59
Steve Kim
The tenant is paying your mortgage. Then if it appreciates, you make more cash flow or you can refinance, take some of the money out, and buy another house. These past two years have been unusual. It’s gone up too fast. Normally, think of it steady. Even though Atlanta with the soccer company, and soccer federation coming in is going to bring in a huge number of people, and run up the World Cup. But I don’t tell people that. I want to find out where that soccer field is being built. My job is to find it. I went to Korea. I met with SK Battery. I met with many people to find out where they were coming from. It’s inside knowledge. Because I speak Korean, I was in Korea for a whole month.

I want to find out where they’re building, the economic development of Georgia. I met with the office in Korea and also in Japan. I’m friends with Japan, so I want to know where they’re coming from. But remember, it’s going to be one year later. So don’t think the best time to buy is not when cash flow is great. Best time to do it right before cash flow is low. If you can just wait two or three years. If you’re buying just too quickly and want cash, then it’s not a good way. It’s not a good mentality. Remember what Warren Buffett said. He doesn’t care about stock price. He buys companies for the long run. If it’s a good company, it’s going to make. Just because the stock price is lower, he doesn’t buy it on the dips. He buys companies. And that’s the way I think. If you buy real estate, you have to think like him. You buy good property and just wait and take care of it.

01:19:55
Donald Klip
There are also so many tax loopholes in the US. If you spend time researching, you’re learning something new every day.

01:20:05
Audience
So I think on our side, we spent almost two years researching before we even bought our first property. It’s so niche in Singapore. Nobody else is doing it. So we learned from nobody. And we were still working full-time at the time.

01:20:44
Donald Klip
Congratulations. Free from the employer.

01:20:51
Audience
Yeah. And, it’s not 100%, especially in the first year, I think were so happy that we bought our first house, but I think we made no money. Because we made mistakes, chose the wrong tenants. We had evictions, we repaired everything. We repaired the whole house to put a tenant in. It was a bad tenant, and then he wrecked the whole house, and we repaired everything again. So, these are our lessons.

01:21:21
Steve Kim
No, I had to get a broker’s license. For all my clients, I had a property manager I introduced, but they always came back to me because they were not in Atlanta. I have to do all the work that the property manager doesn’t do. So they said, “Can you become property manager, please? Because you’re doing it anyway.” But I had to get a special license. I’ve passed my license, so I’m going to start because something goes wrong, who are you going to call? The property manager or the agent. You’re going to call the agent. You are going to call him first. But whoever is closest to me. I’m not glad she didn’t make money. But people, it takes time. It’s like anything. It’s easy. Everyone can do it. But the thing is, I hope that you guys develop a meetup of real estate so you can share stories.

Because a lot of people make money in the US. I know a lot of people overseas who do it. But as you said, it depends on trust. There are some scammers. So at least you met me and Donald. So if something goes wrong, you can complain to him. Complaining is important. If there is no person to complain to, they can scam you.

All the good things come to me. It’s easy to make money if you’re just patient. And it’s going to be a little bit hassle. Even right now, we’re evicting a person and I have to go to court. And then they’re not still living. They’re not leaving. I’m not saying that’s good, but it’s not like you’re buying a stock. You’re buying a place for people to live.

01:23:18
Donald Klip
there’s so much information. You can find out where Starbucks is in the US. Ordering furniture in the US is super easy. It’s all so streamlined that it actually can be done remotely. You just have to get used to searching for stuff. But there’s just so much information.

01:24:11
Steve Kim
I like Savannah. But Costco came this year. If Costco has put a store there, I know they’re much smarter than me. Some people say Starbucks is there, and it’s still weak. But Starbucks is a little bit late. It’s already very nice.

01:24:36
Donald Klip
I know a little about this because my friend ran a company in Asia and I went into his office. He was in Hong Kong and he had math on his whiteboard. I was like, “What’s this? You sell like cheap toys and stuff?” And they calculate how much foot traffic the population is. Starbucks has more foot traffic. But these guys use a lot of math.

01:25:21
Audience
They know the income level also. They do it in the best neighborhood.

01:25:26
Steve Kim
I knew the son of the Costco founder. I was friends with him in Tokyo. We went traveling together. He told me, “Why did you start your first Costco in Japan, in Tokyo?” No, I’m going to start in but they made the first Costco in too. But most American companies go straight to Tokyo. They want to go straight to LA or New York. I think it’s a big mistake. Because it’s sexy. I have my first store in New York in Times Square. That’s what most people do. They don’t go to Alabama or Tampa first. It’s a little bit ego. I don’t know anyone who said, I bought a lot of property. I didn’t have much money. I invested in New York and made a lot of money. Those are rich people already. Unless you have $100 million to invest now, don’t go to the big market. We have a lot of competition. There are a lot of Chinese investors already during this. I was in Toronto last year. Toronto is more expensive than New York. I love it. But the average price is 1.6 million.

01:26:49
Donald Klip
During winter, it’s cold.

01:27:01
Steve Kim
If you have a chance to visit Atlanta, I can show you. Just come. Because for the money you’re investing, you should come and I’ll show you around. You have to buy your flight ticket. I’ll show you the different areas, the good areas, and the bad areas, and why I think it’s growing.

01:27:23
Donald Klip
So you have to tell me what is the best Chinese restaurant in Atlanta. And how do you think you have an interest in Atlanta? You’ve been there, right?

01:28:16
Audience
I’ve been there a long time ago.

01:28:24
Donald Klip
I don’t know if I told you this, but when we first started, one of my friends in Hong Kong, through a family office, bought 400 homes in Atlanta. This was after the financial crisis. They bought 400 homes after the financial crisis. He was a client of mine, a junior guy. He called me, and he said, “I have some friends who want to refinance their properties.” I’m like, “What are you doing owning property in Atlanta?” And then we met him, he coupled up some money and bought 400 homes. And they put it and he didn’t even put it into a fund. He went out and bought it, but he did all the work. Those things probably went up five times.

01:29:44
Steve Kim
No, not five times. I have a listing agent I work with, and she bought a house back in 2016. That’s not that long ago. She bought it for less than $4,000. She bought the house with a credit card, and it was liveable. This wasn’t that long ago. The house you could buy for $20,000, I just closed on many of them. They were $280,000. They bought it for 20,000 in this area. They sold it for $280,000. It’s a German lady. It’s duplexes and great cash flow. And I said, “But the thing is, we can’t buy that now.” But even then, they told her she was crazy in this bad neighborhood, with a lot of crime. One person bought it for less than $4,000. I said, ”How did she buy a house with a credit card?” She bought it with a credit card. And rent is over $1,000 now. But the thing is, you have to think ahead. You miss that. I mean, no one’s got that after all.

When they crashed, the thing with every fund was about appreciation. It’s like the bubble in Japan, where the Imperial Palace was worth more than California. When it crashed, not everyone switched. No more appreciation, only cash flow. And it has become too much cash flow. But now I think cash flow will come with an appreciation market as long as it’s decent cash flow. But don’t go for the best cash flow, because you have to think of it ten years from now. I also look at the buyer’s age. Your age is very important. If you’re 70, go for cash flow. How old are you?

01:31:50
Audience
Close to 40.

01:31:52
Steve Kim
Really?

01:31:53
Audience
Yeah.

01:31:54
Steve Kim
Anyway, good for him. He can wait ten years. If you wait in real estate, if you have time to wait, then it’s great. Ten years. Don’t look from ear to ear.

01:32:10
Donald Klip
Do you know why he looks so young?

01:32:15
Audience
Because I have Tracy.

01:32:15
Audience
I have more property.

01:32:22
Steve Kim
Where do you have it?

01:32:25
Audience
Columbus, Cincinnati.

01:32:26
Steve Kim
Columbus is good.

01:32:28
Audience
We went in before all those booms before the COVID happened, so were pretty lucky. We went in because were going for cash flow only. And we know that the Midwest doesn’t appreciate but it’s because of the reshoring of manufacturing.

01:32:47
Steve Kim
Columbus is different. Even Cleveland is good because they have the medicine. So you have to know the companies that you’re investing in. My brother lives in Cleveland. His wife works for Cleveland Clinic. It’s not going to grow like the southeast. No way. It’s too cold and it’s bad weather. The roads are all broken apart because it rains, snows, cracks. I don’t know why people live there, but the jobs are there. North Carolina is also very good, the Southeast is the best place. Beautiful Blue Ridge mountains. You don’t even need air conditioning in some places. It’s so beautiful. They have humidity.

01:34:12
Steve Kim
Commercial aspect, but because nature commercial depends on they have triple net means you pay for the property tax, the insurance and the commonplace. You can also have growth day paper, but commercial generally, but more packages you.

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Disclaimer: This transcript is AI-generated, so kindly pardon any transcription or grammatical errors that may be present.