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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

25:49
Robert Chadwick
Quite affordable then.

25:52
Lucas Ramos
Affordable.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

57:56
Lucas Ramos
Have a great evening.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

26:08
Lily Lin Ly
Thank you.

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

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

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

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

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

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

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

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

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

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

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

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

09:27
Steve Kim
For business?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

01:01:58
Audience
Ohio.

01:01:59
Steve Kim
Where?

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

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

01:02:40
Audience
Don’t tell people.

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

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

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

01:03:11
Audience
Intel is going there.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

01:31:50
Audience
Close to 40.

01:31:52
Steve Kim
Really?

01:31:53
Audience
Yeah.

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

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

01:32:15
Audience
Because I have Tracy.

01:32:15
Audience
I have more property.

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

01:32:25
Audience
Columbus, Cincinnati.

01:32:26
Steve Kim
Columbus is good.

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

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

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

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