09:22
Robert Chadwick
Hi, everybody, this is Robert Chadwick with America Mortgages. Thank you for joining another one of our webinar series. This time it will be on property management in the US. We will be joined by Phil Gerathy. Phil is the CEO and managing director of Austplan, which is very similar to us, a foreign national and expat-focused property management company in the US. What that means is their main focus is providing US real estate or property management in particular for foreigners that are investing globally. So, Phil, maybe you need to turn your camera on and welcome.

10:24
Phil Gerathy
Thank you, Robert.

10:25
Robert Chadwick
Yeah, thank you for joining us once again. We appreciate it. Why don’t you kind of introduce yourself and give us an idea of what you do, and what Austplan does, then I’ll share your website, and then we can go through the slides and you can talk a little bit more in detail.

10:47
Phil Gerathy
Thank you. So, my name is Phil Gerathy. I’m the CEO and managing director of Austplan Management. We are an international property management company specializing in the United States. So we manage properties on behalf of expat US citizens, as well as citizens of several other countries. Our specialty is unique. If we could start the slides of the website, Robert.

11:33
Phil Gerathy
There we go. So one of the unique factors of Austplan management as a management company is to demonstrate to owners of properties that we are absolutely in their corner, that their properties are being professionally managed, and that even though they may be living in Singapore or Hong Kong or China or wherever they can go to bed in the evening and confident that their property has been managed by a company with over 50 years of property management experience throughout the United States. So we’re actually in most major states, as you can see by this slide, in Washington state, in California, Texas, Florida, New York, New Jersey, Michigan. So we are, if you like, in the major areas or states of the US that offer great value for money for investment properties.

12:43
Phil Gerathy
And the total number of assets under management last year in 2023 was over $100 million of assets under management. That will certainly increase again this year as we are constantly receiving referrals from our clients to manage additional properties on behalf of those folks and additional people.

13:11
Robert Chadwick
Thanks, Phil. I think for us, because our clients are only foreign nationals and expats, the biggest concern is always, if I buy this property, I’m able to obtain financing, how am I going to manage it? So I’ll start the slides now and you can discuss how seamless this is and how easy and hassle-free that you at Austplan make this. So let me share your slides. One second here, a little bit of technical difficulties. Phil, there you go. The floor is yours.

14:14
Phil Gerathy
Okay, so as I said in the introduction, Austplan Management is a company that was started 16 years ago and has been in business constantly since then, and has grown exponentially throughout the United States and manages properties all over the US as I mentioned. Robert mentioned a moment ago the fact that whilst obtaining mortgage finance is relatively easy for expat investors in the US for property investment, one of the key issues that come up regularly is, well, how do I know my property is being managed professionally in a way that I am confident that my return on investment is going to be generated and that I can be confident that I have contact with people anytime I would like and I can go to bed at night sleeping in peace, knowing that my asset is growing in value? Thanks, Robert.

15:22
Phil Gerathy
Austplan management is, as Robert mentioned, a seamless process. We’re, if you like, a one-stop service management company. We’re a little unique in this space. Most other management companies in the US and other parts of the world just specialize in management, that is, obtaining a tenant and putting them into the property, collecting the rent, and distributing the rent. We provide a service that covers a whole range of issues. For example, before your property is about to close, we’ll provide a full rental and market analysis. We’ll attempt to find a tenant before the closing. We’ll attempt to sign a lease agreement and of course complete a detailed walkthrough of the property to make sure that before the tenant moves in, the property is in excellent condition now. After the close, that’s when the real work starts.

16:23
Phil Gerathy
That is we provide the financial support, that is the accounting financial support, the hands-on management, and then the value-added services kick in. If you want to sell the property at some point down the track as an investment property sale, then our role is to analyze the market for you, provide any of the renovations or repairs that are necessary to bring it back to first-class condition, prepare your tax return, put it on the market, and sell it for you. So it is a seamless process within our organization. This gives you a summary of what were just talking about.

17:11
Phil Gerathy
So all of these particular items, if you like, are free and we provide them as part of the service in that seamless process, the free walkthrough before the closing to ensure your property is in first-class condition before it’s handed over to you. In some cases, the homeowners association requires approval for tenants. That’s our job to make sure that we do that and that we get the necessary approval from the HOAs. We research the rental market. We’re looking for the maximum that we can obtain in rent to maximize the return on investment. The ongoing management also is a process where we’re in constant contact with the tenant, of course, as well as the owner. Because we deal with the extensions of leases, people from time to time want to extend their lease beyond one, two, or three years.

18:14
Phil Gerathy
Our role is to facilitate that on your behalf and of course, to obtain rental increases as we go along year on year. The process is two-pronged if you like. That is our main priority is the property owner. We are managing the property on behalf of the property owner so that the property owner is confident that this place is being looked after. But also on the other side, we have to have regular contact and communication with our tenants. This, of course, aims to resolve any conflicts that might occur with the tenant or any other issues that might crop up from time to time that we can resolve so that you as the owner have no concerns or issues that you have to contend with.

19:11
Phil Gerathy
Maintenance services. As a professional manager, we have to provide ongoing and hands-on management, not only from an accounting viewpoint, but also from a repair, if you like, and maintenance issue. So we start with, of course, the lease agreement and make sure that the tenant is compliant with the lease agreement. We provide regular maintenance as and when required. We provide regular inspections of the property, which are usually done every six months. Any renovations that may be required from time to time, we handle and manage that process. And again, that’s a free service. Emergency repairs might crop up from time to time. And the last thing you as the owner want to be worrying about is emergency repairs.

20:04
Phil Gerathy
Our job is to jump onto that very quickly and have those emergency repairs resolved so that your property is maintained in the way that it was at the very beginning. Repair costs, we provide an audit on those and we make sure that the dollar amounts that are being spent, you are the one that is making, obviously, or giving us the approval, but we provide a complete audit of that. On the financial side of it, we’ve got this three-pronged attack, if you like. At the very beginning, it is identifying the property for you, looking for a way to facilitate the purchase of an investment property, closing the investment property, looking for the tenant, securing the tenant, and then ongoing management. But the other side of it, of course, is accounting, and this is very important.

21:03
Phil Gerathy
So first of all, if necessary, we can arrange an LLC, if that’s the way that you would prefer to be done, or if in fact, the mortgage lender would prefer an LLC. Our in-house accountant will provide profit and loss statements every month, which will provide you with income and expenditure each month, and that report will be sent to you via email. That accountant will also complete your tax return at the end of the financial year, which is December of each year. Of course, the returns are done in March. We hold a security deposit for all tenants, and that’s in our security deposit account, which is reconciled monthly.

21:51
Phil Gerathy
And if a tenant is either slow on paying their rent or behind on their rent or requires some work to be done to the house after the tenant’s vacated, that security deposit is used to cover those costs. We can arrange an ITIN number if necessary, or a Social Security number if you don’t have one. But an ITIN number is sufficient to make sure that from a tax viewpoint, you can dilute your tax liability as best you possibly can. Remembering that from a tax viewpoint, we’re aiming for a zero tax at the end of certainly the first two or three years. As I said, the profit loss statement will detail that each month, as your income comes in and your expenditure goes out. This is the value-added service. This is very important.

22:48
Phil Gerathy
So it’s about balancing the relationship between the owner of the property, but also the tenant. And we try very hard to make sure that the balancing process is equal in terms of the return that we’re looking for on investment, but also that you, as the owner, are deemed to be the most important part of that process. We represent you at any meetings that might be held by the homeowners association. They happen from time to time, and if necessary, we attend those meetings on behalf of the owners. Of course, naturally, we arrange your property insurance with reputable insurance companies in the event of a claim. We manage that process totally, so there’s no involvement in terms of your hands-on work. We do everything in terms of insurance. Regular market reports, usually we provide these every year.

23:48
Phil Gerathy
So we give you an update on what your property is valued at, so you can see that your capital growth is moving in the right direction. One very important thing that several property managers fall on, and that is communication. Our whole focus is communication with the owner. Now, because we have offices in China, Australia and Southeast Asia, and the United States, of course, it doesn’t matter what time zone you live in. There is always somebody that you can talk to, either by telephone, email, WhatsApp, or whatever other communication platform you may use. So you always have access to somebody in real time to talk to.

24:33
Phil Gerathy
And on the odd occasion where we have to evict a tenant, which I must say hasn’t in all the years that I’ve been doing this, it doesn’t happen very often, but when it does, we represent you in court. You don’t have to come to the United States. We act on your behalf. We do what the court requires of us, and we usually are successful in evicting the tenant, and we use the security deposit to cover costs. Legal services. One of the, of course, important legal services is to set up an LLC if that’s required, an LLC being a limited liability company, which you would be the member and you would own, if that’s required. And our in-house attorney would provide that service at the same time from time to time.

25:25
Phil Gerathy
Some of our clients like to transfer titles, for example, to a sibling or a son or a daughter, so we can facilitate that process as well. Of course, naturally, I talked earlier about eviction, that part of the legal process that we offer, and any other issues that may be required from a legal standpoint down to immigration, we can provide those legal services for you. Now, all of these additional services, naturally, the legal advice, of course, is charged by the attorney. However, as the manager, we don’t charge anything at all to coordinate that whole process. So this is, I guess, our competitive advantage over and above most other management companies in the United States, and for that matter, other parts of the world. We have combined over 30 years of real estate investment experience.

26:32
Phil Gerathy
We’re now in our 16th year of property management experience. So we understand the market both in terms of the value of a property, the facilitation and purchase of a property, the sale of a property, and the tenants into a property, but also understand totally how important hands-on management is to an owner, and we charge zero extra costs regarding those items. Automated management services. A whole process in terms of management is when we say automation, it’s automated in terms of the platforms that we use. So you have access via a management platform that gives you the ability to go into a portal and own a portal at any time you like.

27:25
Phil Gerathy
And you can look at your property, you can look at the financial situation, you can look at your dollars in and dollars out, you can look at the value of the property so you have complete access. Language is no barrier, of course. As I said earlier, we treat the owner’s interest as our number one priority, and that’s very important. And that one ability to talk is what we call humanized. And offering owners investment consultation? This is the process where we essentially identify the opportunities for people. When they say, I’d like to buy an investment property, where should I buy it? What sort of property should I buy? What sort of return on investment should I expect, and what’s the ongoing process? So that’s the one-stop shop, if you like, that makes Austplan management unique in this market.

28:26
Phil Gerathy
Here are just some examples of areas, as I mentioned earlier on the website, and I’d welcome you to visit our website because it will give you a far more detailed analysis and understanding of Austplan management. But here are some interesting areas that we currently manage in Irvine California, which is just south of Los Angeles, the great park in Irvine. Now, that photograph doesn’t do it justice, because now it’s a huge community, and we manage many properties in that particular community. Frisco in Dallas., it’s part of the DFW metroplex. Frisco has been one of the fastest-growing cities in the United States. We now manage many properties in that Frisco area. Miami and Florida, we manage numerous properties in the greater Miami area. The Doral Park, of course, is downtown, but most of our properties in Miami, we manage north of the city.

29:39
Phil Gerathy
So this is a little bit of a snapshot. We started the business in Michigan, in the United States. We still have an office in Southfield Michigan. That was back in 2008. We have an office in California, in Irvine. We have an office in McKinney Texas. We have an office in Shanghai, China, and we have an office in Australia for our Australian clients, of which we have numerous as well. Thank you, Robert.

30:19
Robert Chadwick
Thanks, Phil. That was, as always, super informative, and very interesting. I think probably one of the biggest concerns for investors who are buying US properties for the first time, regardless of where they are, is the property management portion of it. And we’ve spent a lot of time looking at various property management companies. One of the reasons why we partnered with Phil’s company was because much like us, their primary focus is on foreigners or US expats owning and managing US real estate. And I think it’s a crucial factor in investing. But I think if you use a company like Austplan, I think, as Phil had said, you can sleep at night. And Phil maybe we can discuss this a little bit.

31:23
Robert Chadwick
But if you think about if you’re investing in real estate, even in your home country, unless you’re buying down the street, your access to that property is probably not as available as it would be. So to me, whether a borrower lives in Berlin or they live in Brisbane, and they’re buying US real estate, as long as they have a property management company, it shouldn’t be an issue. And it’s almost as equal as if they were to buy something in their own country. I don’t know if you want to add.

32:00
Phil Gerathy
Yes, I think that’s viable. Clients, for example, many of our clients are in Asia. So for example, Hong Kong, Shanghai, Macau. Now, those folks, of course, are a long way from the United States. The key issue to those folks is the ability to communicate, the ability to pick up the telephone and talk to somebody live. Considering that the time zone in those particular areas, of course, is a day ahead. Now, that’s very important. We get that feedback regularly, and that’s the reason why we receive numerous referrals regularly, simply because of that ability to communicate and the ability to offer complete confidence that the properties are being managed in a way that alleviates any concern.

33:03
Robert Chadwick
Excellent. Okay, so I will start my portion of the webinar. We’ll talk about U. S. Mortgages, and how to qualify, and then at the end of this webinar, we’ll have a question-and-answer box. If you look on your Zoom, there’s a place where you can ask questions in the Q&A. If you also look into the chat section, you will see a link for both Phil’s company and also America Mortgages, where you can schedule a time to speak to somebody, whether it is about a US mortgage or it is about US property management. So, Phil, we’ll see you in about ten minutes for the questions.

33:45
Phil Gerathy
Thank you, Robert.

33:54
Robert Chadwick
So again, thank you, everybody, for joining. If you haven’t been attending one of our webinars before, my name is Robert Chadwick, I’m one of the co-founders of America Mortgages. We are 100% focused on foreign nationals and US expats. Basically what that means is all of our clients are living and working abroad. But obtaining a US mortgage, whether it’s for purchase or refinance. I honestly believe, that because this is all that we deal with, nobody does this type of mortgage lending better. And to highlight some of the general mortgage overviews for American mortgages, of course, none of our mortgages require US credit. If you’re a US expat, it’s fantastic if you have US credit. However, we understand that some expats have been abroad for many years and no longer maintain credit. That is still absolutely possible.

35:01
Robert Chadwick
It’s advantageous if you have a credit report from your home country. But if there is no credit reporting agency in your country, that is not a problem as well. What makes us very unique, no assets under management are required. So unlike certain major banks that may do US mortgages, we do not require you to put a certain sum or a certain amount into a US bank account while you have this mortgage. You can obtain the mortgage without any requirement for that. Foreign income is allowed. So regardless of where you earn your income, we treat it the same. Loan programs in all 50 US states. If you’re a foreign national, meaning you’re not a US citizen, you can get up to 75% financing on a purchase and up to 70% cash out on a refinance.

36:01
Robert Chadwick
If you’re a US expat, we try to make it exactly as if you walked into a US bank. You can qualify for up to 80% financing just as you would for a US investment property. Normally, once you submit your documentation, we can get you loan approval within 72 hours. Once you are issued loan approval, if you’re making a purchase, we issue you a letter. Once you have this letter, you can go shopping. When you find a property that you like, you must have a pre-approval letter to submit with your offer. It shows the realtor and the buyer on the other side that you’re serious and you’ve already obtained your financing. On average in the US, closing times are between 30 and 45 days. You can sign your closing documents in most countries.

36:56
Robert Chadwick
What makes this unique, and again, because this is all we do, we have at least four different ways that you can sign your closing documents in the country that you live in without ever having traveled to the US. We offer 30-year fixed mortgages regardless of the borrower’s age. I know this is something very unique to the US and really what it comes down to is antidiscrimination. The US feels that if a 19-year-old should be able to qualify for a 30-year mortgage, so should a 99-year-old. There can’t be any difference in the way that mortgage lending is obtained. So whether you’re 19 or 99, a 30-year amortization is available. We have a great program, especially interest rates are a little bit higher now than what we would like.

37:50
Robert Chadwick
We have a program that is a fixed ten-year interest only that converts into a 30-year fixed after the ten years. How it works is, it’s very slick. Say you have a fixed rate. I’m just using this as an example of, say, 7%. You have a 7% interest-only loan for ten years. The rate does not change in those ten years. You would expect that rate to reset. However, it does not. It stays at that 7%. But now you’re just servicing the principal and interest. It’s a really good way, if you never refinance, to know exactly what you’re paying over the lifetime of the loan. So a really good way to calculate passive income. We have loan programs that are common sense underwriting. What does that mean?

38:44
Robert Chadwick
Well, if you were to buy a commercial building, certainly you would not qualify off of your rental or your personal earned income. And this is how we treat the investment properties. There are programs, certainly where you can provide your income documents. However, our most popular programs qualify on the rental income of the property. I mean, it makes sense. If you’re buying an investment property, it should qualify on the cash flow of the property. Super easy program, and we’ll go over that in a little bit down the slides. Something that we are very proud of, 97% of our loan applications are approved. Normally, if it’s not approved, it doesn’t have anything to do with the borrower. It’s more property-related issues.

39:37
Robert Chadwick
As Phil had mentioned, and this is something unique to his country, we realize that we have clients all over the world, whether it’s a language issue or a time zone issue, we do not expect you to stay up at three in the morning trying to reach somebody in New York to find out about your mortgage. We offer 24/7 services with 30 loan officers spread across twelve different countries. We speak your language and are in your time zone. So the loan programs are quite simple. The first one that I wanted to talk about is the loan program which is the most popular. No personal income is required.

40:23
Robert Chadwick
Now, again, I think a lot of people would question this, but if you think about it in a common-sense underwriting manner, if you qualify only on the projected rental income of the property, you know exactly how that mortgage is going to be paid. No US credit or residency is required. Loan amounts from $150,000 to $3 million. What that means is if we have 75% financing in all 50 states, the purchase price of a property needs to be only $200,000. The down payment would be $50,000, which makes real estate property or building a portfolio obtainable for almost anybody. 30-year fixed and interest only available. And of course, 30 to 45-day closing. How this works, if you’re curious about how the rental coverage loan works, so say you have an expected rental income of $2,400.

41:31
Robert Chadwick
And just so you know, how we get this number is when we order your appraisal and your valuation report. We request the appraiser to do also an analysis of the rent. That analysis, which is built into the appraisal, will be used as the income to qualify for the loan. So as long as the rental amount covers the principal, the interest, the taxes, and insurance, which if you know anything about us mortgages, is actually what your mortgage payment is, then the loan qualifies. It’s normally on a one-to-one basis. However, we do have loan programs with reduced loan values that will qualify even if the rental income is still short on qualifying for the payments. So AM investor plus, this is the one that you can use your income to qualify to potentially be able to get a slightly better rate.

42:36
Robert Chadwick
Now, again, because we do loans for clients all over the world, you can imagine the hassle or the difficulty it would be of trying to read everybody’s income tax returns. They could be in a variety of languages or structures. So instead of doing this, we don’t ask for your tax returns. If you’re employed, we want a letter from your employer on the employer’s letterhead. If you’re self-employed, it needs to be from your accountant. That letter merely states two years of income and the current year-to-date salary or income obtained. Now, this is a template that we have, and when you apply for a loan, we send you this template and you just have to have either your employer or your accountant follow it. Very simple, and straightforward.

43:25
Robert Chadwick
Again, no US credit or residency is required, and loan amounts as low as $150,000 up to $3,000,000. 30-year fixed, 75% financing foreign nationals. And again, very quick, easy closings. How does this work? If you are going to use income to qualify, we go off of a debt-to-income ratio. So in this example, the debt-to-income ratio has to be no greater than 43% of your gross income. So obviously your pretax income. So in this example, if your pretax income is $10,000 a month and your mortgage payment is $4,300 a month or less, the loan qualifies.

44:22
Robert Chadwick
If you’re a US expat, and that’s a considerable amount of our business, as you know, when you’re living abroad, and we have clients like this all the time, they call the bank that they had a mortgage with, or they still have a mortgage with, and they start going through the process, and then the bank finds out, wait, you’re earning your income in Hong Kong dollars or euros, whatever it may be, and they say, “I’m sorry, we cannot do the loan.” Again because 100% of our clients are either foreign nationals or expats. This is not an issue with us. We will not go through the process and turn down your loans. All we want is two years of your tax returns. You’re going to qualify the same as if you lived and worked in the US. However, we do not require a W-2.

45:12
Robert Chadwick
And for those of you who are foreigners, a W-2 is the end-of-year statement that most US employers will file. Again, no US residency is needed. You can do this from any country. We would like if you had at least a 680 credit score. And that is so you can qualify for better rates. Again, loan amounts are as low as $150,000. And for a US citizen, for this particular program, we go as high as $5 million. And again, a 30 to 45-day closing, whether it’s both a purchase or refinance. Very similar to our AM plus loan, you’re qualifying on the debt-to-income ratio. And again, 43% or less is needed based on your gross income pretax.

46:12
Robert Chadwick
So we work with a lot of private banks, as probably a lot of people that are watching maybe were referred from. We have very specific loan programs. This makes us very unique. We can do loan amounts on residential properties as high as $100 million. What makes these loan programs, again, unique is we do not require personal income. We realize that high net-worth clients have very complicated and often multi-jurisdictional tax returns. So to qualify for these loans, all we want to do is get two months of statements of your portfolio. That portfolio could be stocks, bonds, crypto, cash, whatever that may be. We’re going to take a two-month average, and we’re going to use that as qualifying as if you were to divest out of this portfolio.

47:15
Robert Chadwick
The great thing about this loan program is there is no encumbrance on the portfolio. Once the loan closes, you’re able to cash out of that portfolio, trade it, whatever you would like to do. There is no requirement to maintain that. It is only used to qualify. An example of that, say you have a two-month portfolio average of $5 million. What we’re going to do and how we’re going to calculate the income is we’re going to look at the fixed term of the loan, you do a 30-year amortization. Maybe you only want a fixed term of say 60 months, which is five years. We’ll take those 60 months, divide it over the two-month average of the portfolio and you would use that income to qualify.

48:06
Robert Chadwick
In this case, it’s $83,00.0 and as long as your mortgage payment is below that, then you qualify. It’s really on a one-to-one basis. There is no debt-to-income ratio on these loan programs, which makes it a great way to qualify, whether you’re a private bank client or a private banker. I don’t know if you follow our newsletters, but there have been more students attending universities in the US last year than there have ever been, ever recorded. So we launched this program a few months ago and it’s been fantastic. So if you have a student that is attending a university in the US and you would prefer that they don’t live in the dorm, we have a loan program that works very much like our rental coverage plus loan where you’re going to qualify on the rental income of the property.

49:13
Robert Chadwick
Even though your child is going to be living on the property. It’s a clever way to get the loan qualified without having to worry about your debt to income qualifying when you have another asset that you’re paying monthly on. It’s also quite a unique way. If we can add the student or your child to the loan and they just have to be over 18 years old, it’s a good way for them to start obtaining US credit, which if they choose to live and work in the US, it’s paramount to have that. So again, how it works is very similar to the rental coverage program. If the rental income or the projected rental income covers, then the loan qualifies. So that’s our presentation. Thank you very much for joining and staying through the process. We have an office located in Texas.

50:20
Robert Chadwick
We also have our Asia office where I’m located, which is in Singapore. You can scan the QR code and that will give you all the contact information, whether it’s emails or phone numbers. Again, there is a link in the chat where you can book an appointment, whether it is with Phil’s team or with the America Mortgage team. Phil, why don’t you join us again? Yeah, great. It looks like we already have quite a few questions. So what I will do, I’ll read the questions and then if it’s pertaining to me, I’ll answer it. And if it’s something pertaining to you, then you can take it and then we can kind of discuss this openly. So, first question. A friend of mine had an investment property in the US. However, communication was a problem. Can I be assured of ease of communication? Phil, I believe that would be you.

51:29
Phil Gerathy
Thank you, Robert. Yes, I think I addressed that particular issue earlier in the presentation, but yes, this is a key issue. It does come up regularly. As I said earlier, we have offices in Southeast Asia, Australia, and the United States. It doesn’t matter what time zone you’re in. You can be assured that somebody is available to talk to you. For Asian people, several people use WeChat. If not WeChat, it’ll be WhatsApp. If not WhatsApp, it’ll be telephone. If not telephone, or email. But somebody will physically talk to you. So that’s not an issue at all.

52:08
Robert Chadwick
Great. Thank you, Phil. Next question. This may sound like a basic question, but how can you assure me I won’t have to worry about my property?

52:20
Phil Gerathy
Experience. After 16 years of doing this, I think we know how to give you peace of mind or give the owner peace of mind. That’s what it comes down to and the infrastructure. That is that, as I said earlier, the communication tool, that is, people can talk to somebody on the telephone. But the experience that we have and the referrals that we receive, which are regularly, is a clear indication that our clients acknowledge the confidence that we suggest we can deliver.

52:58
Robert Chadwick
Excellent. Next question. Can you tell me the most asked question by foreign investment property buyers? So I’ll address it on my side, Phil, and then perhaps maybe you can address the property. So I think when it comes to obtaining a mortgage, obviously most of the people on this webinar probably have talked to a loan officer in our company. So they do realize that obtaining a mortgage with an experienced company like America Mortgages is easier than they would expect. So I think the main question that we get foreigners is how do I qualify and can I qualify?

53:39
Robert Chadwick
And I think if you were to schedule an appointment, and again, there is a link in the chat with one of our loan officers, you can see how easy it is to qualify for our mortgage in any of the states in up to 75% financing. And Phil, maybe you can address this. When it comes to property management, what seems to be the main question that a foreigner would have for property management?

54:04
Phil Gerathy
The main question we get, Robert, is how do I get started? I live in Singapore. I live in Hong Kong. I live in Shanghai, I live in Sydney, but I want a property in Dallas, Texas. What do I do? How do I get started? Who do I talk to? And 16 years ago when Austplan management was established, that was an interesting exercise in gaining experience as we went along. But essentially to say, you talk to us. We’ll get you started, we’ll show you how to start the process, we’ll deliver the investment property for you and then we’ll manage it for you in a very professional way.

54:47
Robert Chadwick
Thank you, Phil. And just to add to that, in my opinion, and I think actually in most investors’ opinion, the most important thing is to get pre-approved for a mortgage loan first and there’s no cost to get pre-approved. It’s very quick. We can do it normally in less than a couple of days. And then once you have that letter, you can go to Phil and you can say these are my requirements from the property that I’m looking at and he can help you sort something as well as manage it. So next question. How exactly do you deploy people all over the US? If I have something in San Francisco and you don’t have someone in San Francisco, you have someone in LA, you mentioned. Phil, I believe that’s you.

55:35
Phil Gerathy
Okay, that’s an interesting question and one that we have received regularly, particularly with referral clients. A referral client might have a property in, as you say, San Francisco, where we don’t have a resident office. What we usually do in that situation is call upon our closest individual. So that would be a lady in Los Angeles. She would then identify one of her colleagues in San Francisco. We would then build the infrastructure around the management of that property. And the infrastructure is essentially the process of day-to-day maintenance if that’s required. However, the actual management of the property in terms of accounting and legal can still be conducted and done from our head office in Dallas, Texas.

56:28
Robert Chadwick
Very good answer. Next question. I am ready to go, but my wife is extremely risk-averse. Do you have references or referrals of happy clients that we can communicate with for both the mortgage and the property management service? So I can tell you on the mortgage side, besides looking at our Google reviews, which I believe is five stars, we do hundreds of loans. And most of the clients, as they’re buying investment properties, they can tend to be a little bit, I guess, private. But depending on where you’re at, we do always have clients that have been very happy with our service and as long as they don’t mind, we’re happy to put you in touch with somebody. And Phil, I believe, probably very similar to you.

57:22
Phil Gerathy
Absolutely. So again, there are two parts to that. First of all, we would be more than happy to give you references or nominate clients who would be happy to talk to you. That’s the first part of it. But the second part of it is that, again, and this is something that I regularly talk about, if weren’t doing our job in a very professional way, we would not be receiving the referral sources that we receive every month. So, two parts to that.

57:55
Robert Chadwick
Excellent. Next question. This would be for me, can you do 30-year variable rates? We can. So most of our loans are 30-year fixes. There are, again, as I had discussed earlier, we have a ten-year interest-only loan program that converts into a 30-year fixed with a 40-year tenure. But the difference right now between, a five-year fix and a 30-year fix is so small and insignificant in the rate that it doesn’t make sense to take that risk. But certainly, if that’s your requirement, we’re happy to place it. Next question. Which states do you manage property in?

58:43
Phil Gerathy
I would direct you to our website. You can click on each state in which we currently manage properties. But we manage properties in the west coast states, across into Dallas, Texas. Well, all of the DFW area across into Florida, up into New York and New Jersey, across into Michigan and Washington state, of course.

59:12
Robert Chadwick
Excellent. Next question. Can I visit your team in Dubai? If you would like to meet with somebody in Dubai? We do have people there, and that’s not an issue. I think it probably best to email me or somebody in our office and we can connect you with the members in Dubai. Next question. Is there an issue with purchasing a couple of low-value properties that would total a similar amount to $200,000? That is an excellent question, and we get it often. There are potential loan programs that would allow that. We would have to discuss that with one of the loan officers. But if that is something that you’re interested in doing, it may be possible. Next question. Do you offer HELOCs for foreign nationals wanting to purchase in the US?

01:00:10
Robert Chadwick
Unfortunately, HELOCs, which is a home equity line of credit or a second mortgage, are not available to foreigners. We may have the option if you’re a US expat, but for a foreign national, there is nothing available. Next question. American citizen living overseas for 20-plus years with no US credit any longer. Which program would apply to me? US expat or foreign investor? Again, a very good question. This is not uncommon. You have a unique advantage being a US citizen who no longer has credit. So you can qualify using whatever country that you’ve been living in for the last 20 years. You can qualify using that credit.

01:01:04
Robert Chadwick
But what makes this unique is once you reestablish your US credit, then you can go back and you can qualify as a US expat. And as a US expat or a US citizen to a foreign national rate, there is a little bit better pricing, so you have kind of the best of both worlds. You certainly can qualify, and at some point, you could refinance into a US citizen rate. Next question. This one’s a little bit long. It says, hi, folks. Firstly, thank you for the presentation. Just wondering about the deal for tenants. What is the standard renovation deal for tenants? Two years, or if I have intentions to move to the US in the short term, can I request my property before the end of the term? And can I sell my property to buy a new one?

01:02:01
Robert Chadwick
So I think this is three parts, Phil. But if you can see that question, perhaps I think this is more directed to you. You can answer.

01:02:14
Phil Gerathy
well, I can’t see the question, but I’ll try and remember the part.

01:02:16
Robert Chadwick
Okay. I’ll read the first part. What is the standard renovation deal for tenants?

01:02:30
Phil Gerathy
Is he talking about the standard lease period?

01:02:33
Robert Chadwick
I believe that’s what is referred to.

01:02:35
Phil Gerathy
Okay. The standard lease period ranges from either one or two years. It’s 50-50. Some people will sign a one-year lease and then extend, and that process means that we get involved in the negotiation to increase the rent in the second year, some tenants will sign a two-year lease where we’ll lock in a rate, but that’s higher than what it would be if it was a one year lease. Rarely, do we get much past a two-year lease, but we do have several people that will stay on and we have tenants that have been in houses for three and four years. We just continually renew the lease and adjust the rent.

01:03:16
Robert Chadwick
Okay, thank you. The next part of that is, if I have the intention to move to the US, can I request my property, I guess, to be vacant before I move there?

01:03:27
Phil Gerathy
Yes. Well, you can. There are certain requirements that you have to meet before you can ask a tenant to leave if that is before the expiry of the lease, that could be that you want to sell the property, in which case the lease agreement gives you that option to request the tenant to leave and you have to give the tenant usually 60 days notice in that process generally. However, if you simply want to return to the United States and live in the property and it’s within still the current lease, that can be difficult.

01:04:07
Robert Chadwick
Okay. And I think his last question, I can probably answer this. Can I sell the property and buy a new one straight away? Absolutely. There are a lot of unique advantages in the US, too, that other countries don’t have that can help you avoid having to pay any capital gains tax. It’s called a 1031 exchange. If you have further questions on it, I’m happy to put you in touch with one of our accountant partners who can assist you with it. When it comes to mortgages, there are no restrictions on the number of properties that you can own, and you can leverage it up to the highest amount.

01:04:49
Robert Chadwick
One thing, and I think, Phil, you can probably agree with this, what a lot of people do is maybe rather than selling the property, they will refinance it, say, after one or two years, and then pull the equity out and then use that equity to buy another property. So it’s a great way to build a portfolio. You don’t have to worry about cooling measures or stamp duties and so forth. And this is my opinion, I think it’s sort of shared. But I do think that now is the best time to buy. Because interest rates are still on the higher side, we do expect, as we get closer to the elections, that the interest rates will be used as a tool to boost the economy.

01:05:39
Robert Chadwick
And when interest rates go down, all these owner-occupied borrowers that are sitting on the sidelines right now because they are either unable to afford a property or they feel like they’re sitting on a 3% rate and want something similar, as soon as interest rates go down, these buyers will dive back into the market, which will create another frenzy. And I think we’ll see immediate equity in people that are buying properties now.

01:06:08
Phil Gerathy
Absolutely. Totally agree.

01:06:10
Robert Chadwick
Okay, next question. Should I get an IPA before I buy this property? IPA, I’m assuming you want a pre-approval. That’s what we call it in the US. I think there are a couple of reasons why. One, you want to know what the current rates are and what the mortgage payment will be. And again, because we can fix these over a long ten years, it gives you a very clear picture of what the payments will be. But before you can put an offer in on a property, you need to show that you’ve been pre-approved for a mortgage, unless you’re paying cash. So it’s very important to get the approval before starting shopping. Approximate rates for the programs at the moment. So if you’re a US citizen, it’s market rate, I believe it’s around 7% now for a 30-year fix.

01:07:11
Robert Chadwick
If you are an expat or a foreign national, you’re normally going to be about three-quarters of a point to 1% higher on rate, which, if you look at global markets, is quite good when it comes to foreigners with no credit question. Application fees, I believe this is for me. We do not charge a fee to complete the application. Once you talk to a loan officer, if you want to get started immediately, they can do it immediately during the call, but they can take the application, they can send you the documents that are requested, and then once you send that in, we could start the pre-approval process, which normally takes about 72 hours. And all of that is completely free.

01:08:03
Robert Chadwick
The only time we get paid on a transaction which is industry standard is at the close of the transaction and it depends on the loan size, but normally it’s 2% of the loan amount. Next question. I have 21 condos, all in the Fort Lauderdale area. Nine different complexes. What is the cost of property management for each? all of these units? Phil?

01:08:34
Phil Gerathy
The property management fee is based on the gross rent per month. Now, that can vary depending on the quantity. For example, in one property, our standard property management fee is 8% of the gross monthly rent. However, for multiple properties, we certainly would negotiate, and usually, the fee would be somewhere between 5% and 8%, depending on the quantum. Based on that question, the number would be closer to 5 than 8.

01:09:08
Robert Chadwick
That’s super competitive. I have properties and we pay anywhere from 10% to 12% for property management fees. So I think what you’re offering for the services that you’re offering is fantastic. Next question. Which is actually what you just said, the property management fees and rates. So I think you just covered that. Next question. How can I help my kids build a credit score if I only buy one property? Again, it’s going to depend on how you structure the loan. But if that is a requirement of the loan, we will add the child to the loan, as long as they obtain an ITIN, which is a tax identification number, they can use to start building credit.

01:10:06
Robert Chadwick
If they ever intend to live in the US or go to school in the US, whatever it may be, it’s very important to have US credit. Next question. Are we able to speak to a few current long-term customers or their experience using your property management? I think that was covered before, but if you want to touch on it again, you can.

01:10:29
Phil Gerathy
Yes, absolutely, Robert. First of all, I would encourage you to review our website and take a look at that, and that will give you significant confidence in what I meant to say earlier. But absolutely, I am more than happy to provide you with several people that you could talk to to confirm the comments that I’ve been making over the last hour.

01:10:58
Robert Chadwick
Okay. And I think the next four questions are all about fees for property management. Why don’t you just sort of cover that in a broad range so everybody kind of has just a clearer idea?

01:11:18
Phil Gerathy
The management fees?

01:11:20
Robert Chadwick
Management fees and what normally you would charge and what it includes.

01:11:24
Phil Gerathy
Well, we don’t charge any fees for hands-on management of the property, or day-to-day management of the property. We charge one fee, and that’s a monthly management fee based on the gross rent that we receive. If the property is not tenanted, we don’t charge the management fee. We only charge a management fee once the tenant has been located and has moved in. The management fee, as I said, varies from a single property, for example, at 8% of the gross monthly rent. But as the portfolio grows, as we have multiple property owners, that fee can usually come down to around 6%. But the starting point for one property is 8% of the gross management fee, and that’s it. There are no additional fees.

01:12:14
Robert Chadwick
Excellent. Next question. Austplan office in Dubai? Mr. Phil mentioned he has an office there. I’m not sure if you mentioned that you have an office in Dubai.

01:12:26
Phil Gerathy
No, we don’t have an office in Dubai. We’ve presented in Dubai via seminar. But unfortunately, no, we don’t. We have an office in Shanghai, an office in Australia, of course, an office in the United States. But at this point, not in Dubai.

01:12:48
Robert Chadwick
we have people in Dubai. So if you want to sit down and talk about a mortgage, we can certainly assist with that. Next question. Can the New York office manage or sublet management properties in Philadelphia? Maintenance and eviction with city-specific laws? Very good question.

01:13:06
Phil Gerathy
The answer to that question is unequivocally yes.

01:13:11
Robert Chadwick
Okay. And I would assume it’s just based on your years of experience in linking up with people in that state or that.

01:13:22
Phil Gerathy
So the actual accounting and legal management is done from our office. It’s actually in New Jersey Dallas or Michigan. But from time to time, where maintenance is required, we have people, we would appoint people on the ground to manage the property or to at least look after that property, but the actual management process of dealing with the cities, dealing with the state, dealing with any issues that are specific to that particular neck of the woods, we handle quite easily from our New Jersey or our Dallas office.

01:14:05
Robert Chadwick
Next question. How often do you make regular site visits to properties under your management?

01:14:13
Phil Gerathy
Six monthly. Sometimes we do it more frequently, depending on the tenant or the HOA, the homeowners association. For example, some homeowner’s associations are very finicky when it comes to maintaining the outside of a property, which means that we perhaps would visit that property more frequently. But generally, once every six months, we would do a full internal visit.

01:14:43
Robert Chadwick
Excellent. Next question. What is the average amount of expenses paid before the property has positive cash flow? Management, taxes, insurance, maintenance, and other costs.

01:14:55
Phil Gerathy
Well, excluding interest on borrowings, you would have positive cash flow from the second month of a tenant moving into your property.

01:15:06
Robert Chadwick
And I think one thing too, to also discuss, again, because 100% of our clients are foreign nationals and ex-pats, is our goal at America Mortgages is to partner with companies like Austplan and Phil, but we also partner with CPAs and attorneys that again, specialize on foreign nationals and US expats. The goal of any investment property, regardless of what country you’re in, is to not pay taxes on the rental income earned. And I think because in the US, regardless if you’re a foreigner or a US citizen, you have the same tax advantages. I think often you can obtain that and you can even show a loss which can carry forward and help mitigate any capital gains taxes or whatever. But I don’t want to give any tax advice, but I think it’s very important. If anybody is thinking of investing in US real estate, the US probably has to be, even though it has a bad rep, it has to be one of the best tax locations of any international investment properties, just from the savings that you can get.

01:16:23
Phil Gerathy
That’s absolutely correct. Whilst I say cash flow positive, you will be cash flow positive in the second month. But using all of the deductions available and the tools that we have, generally, we can show a tax loss leading into the third year. But again, that’s an accounting issue that we’re not qualified to give you at this point. But usually, that’s the situation.

01:16:46
Robert Chadwick
Excellent. Next question. Since the current interest-only mortgage rates are high, why would I want to go for a fixed rate over five or ten years? How do I take advantage of these drops in two to three years? Excellent question. And it’s something that is asked often. Again, what makes the US unique is the long-duration mortgages. So the long amortization periods that you can have regardless of the age of the borrower. Why most people will choose a 30-year fix is certainly we do think rates will go down and you can refinance when rates go down. That’s not a problem. Our loan officers are here for the entire journey, not just to do one transaction. So if we see an interest rate drop and we think it makes sense, we will calculate it out for you.

01:17:41
Robert Chadwick
And you can see when your break-even point is, and you can choose if that is the right option. If you intend to exit a property, say, in five years, then sure, a five-year fixed is probably maybe a better alternative for you. But the surety of a 30-year mortgage is only available in the US. And it’s a fantastic way to think if you’re going to hold the properties long. Certainly, we expect and we hope interest rates go down. But if they don’t, as Phil likes to say, you can sleep easy at night. Next question. Do you help manage short-term rentals such as Airbnb?

01:18:28
Phil Gerathy
That question comes up regularly. The short answer to that is, at this point, no. One of the reasons for that is that homeowners associations, particularly with their covenants, generally prohibit Airbnb. The other reason is that the management of an Airbnb is on a day-to-day basis, and we are concerned that the quality of people who lease or rent an Airbnb may be questionable. Now, having said that, we’re exploring that with one particular client at the moment, with some town homes, that are slightly different than a single-family home. So right now we’re in the early stages of exploring that.

01:19:19
Robert Chadwick
Okay, next question. Can you manage large multifamily or apartments with a lot of units? If so, max number of units, and how would that work with the rates?

01:19:33
Phil Gerathy
Well, I think I probably addressed that earlier. The answer to that question is yes, of course. So we have numerous what we call six plex, ten plex, twelve plex. We have several properties that are multi-units. We are currently looking and negotiating with an apartment building in Brooklyn that has something, I think, around 400 apartments within that building. So there are two parts to that. The first part is that we require for large multiple buildings, on-site management, not off-site management, and that’s part of the process. But the second part to that question is in terms of the management fee, which usually, again, gets back to a figure of around 5% gross.

01:20:25
Robert Chadwick
And I think as well, in the chat, you’ll see a link for both America mortgages and for Austplan. I think something that’s maybe a little bit more in-depth is probably good to speak with Phil directly.

01:20:40
Phil Gerathy
Yes, absolutely.

01:20:42
Robert Chadwick
Another question. Are management fees tax deductible?

01:20:46
Phil Gerathy
Absolutely, yes. So in the process of determining tax liability at the end of the financial year, you would look at depreciation, of course, which is factored into your property, but any other expense that you incur along the way, one of which is management fees. But remember that what we’re aiming for in the early years is a tax loss for you, but you will be cash flow positive in the second month.

01:21:14
Robert Chadwick
And we hear this a lot, I don’t know how this reputation came about, but the US sort of has its reputation as being a very bad tax regime, but it’s just the opposite. And I think once you start investing and if you’re a sophisticated investor in US real estate, you realize there’s no better market than the US when it comes to taxes. I mean, you’re in Australia, I’m in Singapore currently, and we can see how the taxes are collected in both of these countries. If you’re not invested in the US yet, you really should, because I think once you start understanding how taxes work in the US, you’re going to be completely blown away.

01:22:05
Phil Gerathy
That’s correct, Robert.

01:22:07
Robert Chadwick
Next question. How do you manage repairs and repair costs?

01:22:13
Phil Gerathy
again, in each state and city where we manage properties, we have a panel of repairers. That panel consists of various trades, right down to cleaners and general occupational trades, but electricians, plumbers, and the like. We have a management platform that has a tenant portal. When something needs to be done, the tenant will access the portal. That will then immediately trigger a maintenance request. Our office will determine what’s required, who’s required, and that necessary trade will be deployed. If the cost of the repair is above $300, we will notify the owner for approval. If it’s below $300, generally we’ll move ahead, get it done, pay the bill on behalf of the owner, and then that appears on the profit and loss statement at the end of the month.

01:23:18
Robert Chadwick
Okay, next question. Can you manage properties in Austin, Texas, Atlanta, Georgia, Nashville, Tennessee Charlotte and Raleigh, North Carolina, Indianapolis, Indiana, and three cities in Florida?

01:23:34
Phil Gerathy
Well, first of all, in Texas, yes. The answer, of course, is yes. We manage properties in Austin and manage properties in Houston. The question then, of course, let me give you an example. We had a Chinese owner developer that has an apartment building in Seattle. Twelve months ago, were approached to manage a number of the apartments in that building in Seattle. Now, our closest office to Seattle is in California, but we now successfully manage that building, or at least those apartments, simply by identifying a person on the ground who can do the hands-on listing and leasing for us. We have a panel, again, of tradespeople that are required from time to time for repairs and maintenance.

01:24:29
Phil Gerathy
And then the accounting and legal and other issues to do with the city and the state are handled out of, in that particular instance, from our Michigan office. Our website and our management platform are very sophisticated. If you were to have a look on the website, you’d be able to access our management platform and see how that actually would then facilitate managing properties in numerous other states.

01:25:00
Robert Chadwick
Excellent. Okay, next question. This is finally for me. It is the cost to refinance a property to lower a rate. Again, it depends on what your current rate is. When you talk to a loan officer, and it’s about lowering the interest rate, right now, interest rates are a little bit on the higher side. I do believe that they will be going down shortly. But the most important thing is to realize the costs that are involved in the loan. Certainly, we do have a brokerage fee, but there also are other costs that are fixed depending on the state. It’s title, insurance, appraisal, et cetera. But we have a way to break that down to where you can see if lowering the rate makes sense what the costs are and at what point in time is the breakeven point. And I think once you see that and once you understand it and it’s explained properly, it makes sense. Next question. Phil, I guess somebody recognized your accent. Are you based in Brisbane?

01:26:11
Phil Gerathy
I am based in Brisbane, yes. But I lived in the United States for several years and came back to Australia not that long ago so that my two teenage kids could finish their high school education here. I’ve now decided for the last two years I’ve been post-COVID commuting. So every month I’m in all of our offices in the United States. Tomorrow morning I’m leaving to go back to New York, New Jersey, Dallas, and then up to Michigan. But yes, I live in Brisbane Australia.

01:26:46
Robert Chadwick
Excellent. And if you want to reach out and have coffee with Phil in Brisbane when he’s there, you can reach out for that.

01:26:52
Phil Gerathy
Absolutely.

01:26:55
Robert Chadwick
Last question. I know this is gone for almost an hour and a half, so I appreciate everybody. Do you process a loan for a foreign national under my LLC, registered in Delaware instead of under my individual name? Excellent question. Asked often. So, in the US, you can hold idle in an LLC? That’s absolutely possible. It’s very common. But there has to be a borrower. So as the individual, you are responsible for the loan, but for the ownership of the property, for a variety of reasons, from tax to security, you can hold the title or the ownership under the LLC, and I believe that is it. So, Phil, thank you, as always, for joining us. I know this went probably longer than you were expecting, but I think were able to address a lot of concerns that our clients have.

01:27:55
Robert Chadwick
And I think if anybody missed anything in the webinar, once it’s edited, it’ll be sent out to everybody who has attended, everybody who signed up and maybe didn’t get a chance to attend. And then, of course, you get it in our weekly newsletter, which I hope everybody does enjoy. Phil, do you have any parting words before we say goodbye?

01:28:18
Phil Gerathy
Well, my parting words would be if you’re an existing property owner in the United States, and you would like a very professional and extremely competitive property manager, talk to me. And if you’re not, and you’re looking to get in, and you’re asking the question, where do I start? Talk to Austplan management and talk to America Mortgages.

01:28:37
Robert Chadwick
Fantastic. Thank you, Phil. So we’ll have another webinar in, I believe, two weeks. The date will be announced soon, and I think you’re going to love it because we are going to announce some exciting new loan programs. So we hope that we see everybody that is on this webinar on the next. Thank you again, everybody. Good day, or good night?

01:28:58
Phil Gerathy
Thank you. Bye.

01:28:59
Robert Chadwick
Bye.

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

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.