Author: Premela R.

The Top 5! Which 5 foreign buyers are buying which 5 U.S. states?

Real Estate - Canadian Mortgages

Top 5 Foreign Buyers of U.S. Residential Real Estate*

  1. China 13% of total = $13.6B
  2. Mexico 11% of total = $4.2B
  3. Canada 10% of total = $6.6B
  4. India 7% of total = $3.4B
  5. Colombia 3% of total = $900M

Top 5 States for Foreign Buyers*

  1. Florida 23%
  2. California 12%
  3. Texas 12%
  4. North Carolina 4%
  5. Arizona 4%

US$53.3 billion*
The total value of foreign buyers of U.S. real estate

$639,900*
The average purchase price by a foreign buyer

*National Association of Realtors, year ending March 2023

Contents:

  • Average purchase price of top 5 foreign buyers
  • Top 5 states buyers from China, Mexico, Canada, India and Colombia are choosing, respectively
  • Top 5 origin of foreign buyers in Florida, California, Texas, North Carolina and Arizona, respectively
  • What surprised us from our research!

TOP 5 FOREIGN BUYER ANALYSIS

Asian buyers continue to lead the charge as the largest group of buyers, with a 38% market share. Going forward, we expect to see increased demand from SE Asia as growth in this region continues to exceed expectations.

LATAM was the runner-up with a 31% share of total foreign buyers, not far behind China. We are very excited about the growth outlook for LATAM as the reshoring of manufacturing to The Americas, and the growth outlook improves. One interesting point is that Colombia replaced the United Kingdom as the 5th largest international buyer, proving the growth of LATAM at the moment. We have recently set up an office in Panama and are looking to rapidly expand our footprint here. 

European buyers accounted for 14% of foreign buyers, while Canadian buyers alone accounted for 10%.

Chinese buyers continue to have the highest average purchase price at $1.2 million, as buyers purchased in expensive states: 33% of Chinese buyers purchased a property in California, and 6% purchased in New York. This makes sense since California and New York have better-known schools, and a big driver in this decision is education. See our Deep Dive on The Best U.S. High Schools. 

Watch Now: Irvine, California - Why is it the most popular destination for Asian homebuyers over the past 10 years?

Mexican buyers typically purchased the least expensive properties, with Texas as the preferred destination. This can be explained by the geographic proximity. 

Average purchase prices for Foreign Buyers

  1. China $1.2M
  2. Mexico $449K
  3. Canada $779K
  4. India $577
  5. Colombia $355K

Buyers from China - Top 5 Destinations

  1. California 33%
  2. Florida 16%
  3. Texas 8%
  4. Colorado 6%
  5. New York 6%

Buyers from Mexico - Top 5 Destinations

  1. Texas 48%
  2. California 18%
  3. Ohio 6%
  4. Arizona 4%
  5. Florida 4%

Buyers from Canada - Top 5 Destinations

  1. Florida 55%
  2. Arizona 14%
  3. California 4%
  4. Louisiana 4%
  5. Montana 4%

Buyers from India - Top 5 Destinations

  1. California 20%
  2. Pennsylvania 14%
  3. Texas 11%
  4. Alaska 9%
  5. Illinois 9%

Buyers from Colombia - Top 3 Destinations

  1. Florida 80%
  2. California 13%
  3. Illinois 7%

TOP 5 DESTINATION ANALYSIS FOR FOREIGN BUYERS

Florida is the top destination for foreign buyers with 23% market share, mostly coming from LATAM 46%, Canada 24%, Europe 16% and Asia 14%. Florida has the best combination of vacation home, investment property and also luxury homes. 

California has the 2nd largest market share of foreign buyers at 12%, mostly coming from Asia. Direct flights, temperate weather, and well-known universities make it an obvious destination for Asian buyers. See our California Report.

Texas was the 3rd top foreign buyer destination, with a 12% market share. Texas is one of our top 3 choices for pure real estate investments. The zero-state tax rate will always generate an incoming population from gentrification and also companies setting up their headquarters. For example, Dallas is the headquarters for the Fortune 500 companies in the world!

North Carolina was the biggest surprise to me as the 4th-highest destination for foreign buyers. One of the prettiest and underappreciated states, North Carolina, deserves more research on what is driving the interest of foreign buyers. We will keep you posted. 

Arizona has always been a popular destination for foreign buyers and is the 5th-most popular destination, with 4% of all foreign buyers.

Share of Top 5 State to Total Foreign Home Buyer Purchases

  1. Florida 23%
  2. California 12%
  3. Texas 12%
  4. North Carolina 4%
  5. Arizona 4%

Florida - Origin of Foreign Buyers

  1. LATAM/Caribbean 46%
  2. Canada 24%
  3. Europe 16%
  4. Asia/Oceania 14%

California - Origin of Foreign Buyers

  1. Asia/Oceania 61%
  2. LATAM/Caribbean 22%
  3. Europe 7%
  4. Africa 7%
  5. Canada 3%

Texas - Origin of Foreign Buyers

  1. LATAM/Caribbean 55%
  2. Asia/Oceania 25%
  3. Europe 11%
  4. Africa 5%
  5. Canada 4%

North Carolina - Origin of Foreign Buyers

  1. Asia/Oceania 50%
  2. Europe 22%
  3. LATAM/Caribbean 22%
  4. Canada 6%

Arizona - Origin of Foreign Buyers

  1. Canada 37%
  2. Africa 26%
  3. Asia/Oceania 16%
  4. Europe 11%
  5. LATAM/Caribbean 11%

What surprised us from our research?

  • The average price for a Chinese buyer is $1.2M
  • North Carolina, the 4th most popular state for foreign buyers
  • Asians are the largest foreign buyers of North Carolina real estate
  • Indian buyers prefer Pennsylvania as their 2nd most favorite state
  • Canadians are the largest foreign buyers in Arizona
  • Africa, the 2nd largest foreign buyer of Arizona real estate

Our analysis reveals fascinating trends in the U.S. residential real estate market driven by foreign buyers. While China remains a major player, Asian buyers take the lead overall. Florida stands out as the top destination, but California, Texas, and even a surprising North Carolina, all attract significant foreign investment. The data highlights the diverse motivations behind these purchases, with factors like education, investment potential, and proximity influencing location choices.

Ready to explore your U.S. real estate opportunities? Contact us today at [email protected] or schedule a call with our loan officers and schedule a commitment-free meeting with one of our U.S. loan officers to explore your U.S. mortgage options further, you can do so using our 24/7 calendar link. Our team can help you navigate the intricacies of financing your U.S. investment property.

Turn your home equity into cash (globally)!

International Mortgage Broker UK

Need cash fast? Tap into your home equity today!

U.S. homeowners are the most “equity-rich” they have ever been, thanks to their home equity increasing over 32.2% since 1Q2021. That’s a year-over-year gain of over $3.8 trillion for the entire housing market. 

This significant increase in home equity has provided many homeowners with the opportunities to cash in through home equity loans and cash-out refinancing!

Article Contents:

  • Why is home equity important?
  • How to access your home equity?
  • Common use of funds
  • Global bridging loans

Why is Home Equity Important?

Home equity is an excellent long-term wealth-building strategy. To demonstrate just how true this is, let’s compare an auto loan to a mortgage. When you take out an auto loan, you are paying interest on an asset that depreciates in value as soon as you drive it off the lot. That means that when you’ve paid off the loan, the car will most likely be worth less than your purchase price, and you will have paid interest.

In contrast, mortgage payments reduce your debt while your home increases in value. Of course, property values could drop, but that is unlikely to happen over the long term. One very financially powerful aspect of this is that you don’t need to sell your home to profit from it. 

How to Access Home Equity

Equity-rich homeowners have two options for accessing their equity without selling their homes:

1. Home Equity Loan: Think of this as taking out a second mortgage for a fixed rate that must be repaid within a set period.

2. Cash-Out Refinance: This option is excellent when you’ve seen an increase in the value of your property. If you’ve just recently purchased a property, you’ll need to wait for at least 6-12 months to use the new value. 

The best way to cash in on your equity depends on your goals. For example, releasing equity is a well-known way to acquire more real estate and build a portfolio.

Common Use of Funds (to name a few)

  • Refinancing
  • Renovations
  • College tuition
  • Pay off high-interest debt
  • Personal business needs
  • Purchasing more property (BRRRR method)
  • Cash while waiting for sale
  • Down-payments
  • Other investments

Global Bridging Loans

Bridging loans are short-term loans, normally 1-2 years, which are used to “bridge” a funding gap where banks are unable to meet the borrowers requirements, usually - speed of funding, loan to value and certainty.

Bridging loans are based on the collateral value of the property (asset-backed) and not the borrower's personal financials. Loans are normally “interest-only or interest-servicing only” with a bullet repayment at the end of the terms. These loans have been very popular over the past few years as retail banks have significantly reduced their willingness to lend on property (globally), and private loans (private credit) have filled the gap.   

Countries We Offer Bridge Financing in:

  • USA
  • Canada
  • UK
  • Australia
  • Singapore
  • Hong Kong
  • Philippines
  • Thailand

Basic Details

  • Get approved in 24 hours and funding in as fast as 7 days
  • Up to 70% of your home’s value
  • Available for primary homes, second homes, and investment properties
  • Priority is speed of funding, certainty, and high loan-to-value
  • Short-term and not meant to replace a bank loan
  • No age restriction in many countries

With our fast approval process, flexible terms, and international reach, we’re here to support your financial needs. Reach out to our International Loan Officers today, and let’s turn your home equity into cash for whatever you need. Get started now!

www.gmg.asia

Dubai Property – Financing Update (good news!) + How-to guide

Mortgage Rates Singapore

Did you know that Dubai offers the highest rental yield of any major city globally at 12%?

Our Dubai-based team has updated their loan program to make it easier and more accessible for international investors (details below). 

Cities with high rental yields normally don't see dramatic price appreciation, and vice versa, but Dubai is blessed with a perfect combination of people moving there for career opportunities, low inventory, and an influx of money simply looking for some capital gains. 

Dubai's real estate market offers super-high rental yields and enticing tax advantages, offering good diversification for international property investors.

Understanding Property Ownership in Dubai

Navigating the process of purchasing property in Dubai is relatively straightforward, similar to the process in major markets like the U.S., U.K., Canada, etc.

Here are the Key Requirements:

International investors are able to own freehold property in Dubai and there are no visa requirements. There are however some specific areas earmarked for foreigners, according to "Article 3 or Regulation 3 of 2006".

How Much Tax Do I Pay When Buying a Property in Dubai?

Dubai has built its reputation as a tax-friendly hub for business and property investments. There is a 4% transfer fee payable to the Dubai Land Department upon property transfer, along with a monthly' housing fee' equivalent to 5% of the area's average rental value. This tax regime contrasts sharply with other countries, where property transactions may incur substantial tax burdens.

How to Find a Property in Dubai? 

While there are many online sites that are a good reference tool, our international clientele still prefer speaking to a trusted real estate agent who understands their requirements. Contact GMG's Dubai team to be your trusted realtor and mortgage originator. 

Where to Buy Property in Dubai? 

Dubai presents a plethora of options for property investment, catering to diverse preferences and budgets. The following areas are popular with GMG's high-net-worth clients: Palm Jumeirah, CityWalk Dubai, Jumeirah Beach Residence, Dubai Marina, and Arabian Ranches. Each offers unique advantages ranging from scenic waterfront living to vibrant urban experiences.  

Our team in Dubai only works with international clientele so we understand the types of homes that are the best in rental yield and or price appreciation. Similar to investing in the U.S., there is a price point for all types of investors. 

How to Avoid Problems When Buying Property in Dubai? 

In any hot market, regardless of the asset, there are always bad actors.

Given Dubai's thriving property market, there are people who can take advantage of the misinformed international buyer.

Some things to look out for:

Scams and fraudulent listings: Ensure agents and property developers are registered with RERA (Real Estate Regulatory Authority), verifying credentials for both completed and off-plan projects.

Overpaying: Prior to committing to contracts or transactions, conduct thorough research on neighborhood rates to make informed decisions.

Paperwork discrepancies: Verify critical documents such as the Memorandum of Understanding (MOU) and No Objection Certificate (NOC), ensuring they're authenticated by your real estate agent.

Bad locations: Utilize rental yield data to select prime areas for investment, conducting independent research to validate seller claims.

Unauthorized sales: Confirm the seller possesses legal rights to the property.

Invest in Dubai with Global Mortgage Group

GMG offers unparalleled expertise in Dubai's real estate investment market, guiding investors through the property acquisition process with professionalism and sophistication.

Investing in an overseas market can be daunting in the beginning, but having a trusted partner like GMG to educate, guide, and look out for your best interest is crucial. 

GMG Dubai Mortgage Loans for International Investors

GMG Dubai Investor + is a loan program specifically designed for international, non-resident borrowers to make qualifying with your local income and credit easy. We have made some changes to the program to make it EVEN BETTER. 

  • Lower minimum loan amount
  • No need to set up local SPV
  • More types of homes available for financing

Get in touch with us today to find out more at [email protected].

How to determine which state to buy in?

Canadian Mortgages

As a professional investor for most of my life, I have developed systems to derive my investment choices. 

For real estate, I prioritise positive cash flow and, to a lesser extent, capital appreciation, although both are correlated. 

Real estate investment is not to be confused with a second home, pied-de-terre, or vacation home. These are not income-generating assets and have very different reasons for owning. 

Since positive cash flow is my priority, I look at which states have high rental yields, potential rent growth, and what specific criteria drive this growth.

Supply and Demand => If more folks are renting in a community faster than the supply of available rentals can support, rental prices tend to increase over time. 

What drives Demand?

Typically, this is population growth. For example, if California is expensive to live in, you can move to Arizona. If New York is expensive, you can move to Florida, and so on.  

What attributes would attract people to move to another state?

  • Cost of living
  • State income tax rates
  • Education
  • Job prospects
  • Wage growth, and many more

In this article, I will examine the Cost of Living and Disposable Income criteria.

In later articles, I will share how I screen for these other criteria, so stay tuned!

What is the Cost of Living?

It is the amount you spend on essential expenses under a normal and reasonable lifestyle.

We also need to take into consideration Salary and Wages since a low Cost of Living state is often associated with lower salary prospects.

We will now look at the average amount you have “leftover” after spending on essentials = Disposable Income.   

Does a high disposable income state represent the best place to own an investment portfolio?

Not necessarily, since taxes, property prices, education, and other factors are not taken into consideration.

Without giving away the secret sauce, the top states to own for cash flow are around the middle of 2 lists.

Next week, I will look at: Average property prices, Population growth, GDP growth, and Rental yield to determine which state(s) is the best to own a U.S. real estate investment in.

StateCost of living (annual $)
Mississippi$32,336
Arkansas$32,979
Alabama$33,654
Oklahoma$33,966
New Mexico$34,501
Tennessee$34,742
South Carolina$34,826
West Virginia$34,861
Kansas$35,185
Missouri$35,338
Kentucky$35,508
Louisiana$35,576
North Dakota$35,707
Iowa$35,871
Ohio$35,932
Indiana$36,207
North Carolina$36,702
South Dakota$36,864
Michigan$37,111
Montana$37,328
Wisconsin$37,374
Nebraska$37,519
Wyoming$37,550
Texas$37,582
Idaho$37,658
Georgia$38,747
Arizona$39,856
Maine$39,899
Pennsylvania$40,066
Florida$40,512
Utah$40,586
Illinois$41,395
Minnesota$41,498
Nevada$41,630
Virginia$43,067
Vermont$43,927
Delaware$44,389
Rhode Island$44,481
New Hampshire$45,575
Colorado$45,931
Oregon$46,193
Connecticut$46,912
Washington$47,231
Maryland$48,235
Alaska$48,670
New Jersey$49,511
New York$49,623
California$53,171
Massachusetts$53,860
Hawaii$55,491
StateDisposable income
New York$25,247
Washington$25,119
Massachusetts$22,740
Illinois$22,535
Virginia$22,523
Connecticut$22,398
Minnesota$22,142
Colorado$21,939
Maryland$21,515
New Jersey$21,379
Michigan$20,889
Ohio$20,598
North Dakota$20,093
California$20,049
Rhode Island$20,049
New Mexico$19,899
Texas$19,718
North Carolina$19,518
Georgia$19,253
Missouri$19,182
Arizona$18,764
Wisconsin$18,746
Pennsylvania$18,404
Tennessee$18,078
Delaware$17,871
Kansas$17,665
Iowa$17,649
Nebraska$17,551
Alaska$17,460
Indiana$17,293
New Hampshire$16,975
Oklahoma$16,974
Alabama$16,966
Wyoming$16,890
Utah$16,774
Oregon$16,487
Maine$16,061
Kentucky$15,982
South Carolina$15,824
Arkansas$15,591
Florida$15,468
Louisiana$15,364
Vermont$15,263
Montana$14,872
West Virginia$14,309
Nevada$13,860
Idaho$13,692
South Dakota$13,026
Mississippi$12,844
Hawaii$5,929

With years of experience in finance, I've developed a keen eye for identifying lucrative investment opportunities. At Global Mortgage Group and America Mortgages, we understand the importance of strategic decision-making in real estate ventures. By carefully examining critical factors such as cost of living and disposable income, we guide U.S. expat and non-resident investors towards maximizing their returns while minimizing risks. As we explore various aspects of real estate investment, our commitment remains steadfast in empowering our clients with the knowledge and tools necessary for financial success. Get in touch with us today to navigate the ever-evolving landscape of U.S. real estate together.

www.gmg.asia

Q&A: Need Liquidity? Discover Singapore Short-Term Bridge Loans

Canadian Mortgages

During our recent live webinar on “Need Liquidity? Discover Singapore Short-Term Bridge Loans,” our expert host, Madel Tan (MT), received numerous questions from participants. For those who have missed the opportunity to join the webinar, it is available here. 

Remarks have been edited for clarity and brevity.

Q1: What is the typical funding timeline?

MT: Typically, funding for unencumbered properties can be finalised in less than a week. However, if dealing with existing banking institutions like local banks, it might take about a month due to potential delays on their end. If liquidity needs arise, please let us know so that we can work with both existing and new lenders to expedite the process.

Q2: What are the closing costs?

MT: Borrowers are usually responsible for covering legal fees, valuation fees, and fire insurance, similar to conventional bank loans. Closing costs vary based on the loan size and property. Different lenders have their preferred lawyers and valuers, depending on who is on their approved panel list. Thus, the fees would vary. For a more accurate estimate, please share your funding requirement and property details so we can provide a range of estimated closing costs.

Q3: I’m 74 years old. Can I still qualify for a loan?

MT: Yes, we have assisted numerous clients, including those above 70, with diverse real estate portfolios in Singapore. Typically, lenders may request a simple memo or letter from a general practitioner such as a medical certificate to confirm your mental clarity and cognitive fitness. This straightforward process ensures eligibility regardless of age.

Q4: What is the minimum loan amount to qualify?

MT: For a Singapore bridge loan, the minimum loan amount is $1 million. We are capable of extending lending beyond $100 million for larger transactions. If you have deals falling outside this range, we are open to discussing them in further detail to accommodate your needs.

Q5: How do you navigate Total Debt Servicing Ratio (TDSR) constraints?

MT: As these loans are deemed private and structured for accredited investors, they are not subjected to TDSR regulations. However, it's important to understand that these loans are short-term solutions and are not meant to replace traditional bank loans. We prioritise establishing a clear exit strategy before proceeding with a bridge loan, which may involve various options such as sale of the property, maturing investments, or fixed deposit redemptions etc. This approach ensures responsible and manageable financing for our clients.

Q6: Hi, what’s the standard interest rate applicable to such bridging loans?

MT: The standard interest rate for bridging loans usually starts at 8.5%. Payments are structured as interest servicing only, with the principal repayment made as a bullet repayment at the end of the loan term. This arrangement ensures manageable monthly obligations for borrowers.

Q7: Is financing available for both residential and commercial properties?

MT: Yes, financing is available for both residential and commercial properties. Typically, lenders prefer freehold properties, especially for residential ones. However, we can still assist with leasehold properties, though additional valuation and lender checks may be required, especially properties with very short leases remaining. We are equipped to handle various property types, ensuring comprehensive financing options for our clients.

Q8: What are the payment terms?

MT: The payment terms are straightforward: it's interest servicing only. This means that you'll only need to pay the interest amount each month. Then, at the end of the loan term, you'll make a bullet payment to cover the principal amount.

Q9: May I know what the usual interest rate is?

MT: The usual interest rate typically starts at 8.5%, but it can vary depending on the specifics of your situation. For instance, if you need the funds really quickly, like within three days, the rate might be a bit higher. Feel free to drop me a message, and I can give you a better idea of what rate you might expect. But as a general guideline, our rates usually start at 8.5%, and it's interest-servicing only.

Q10: Can I get a loan with a high loan to value even though I own 4 landed properties in my own name?

MT: Absolutely, we've worked with many clients in similar situations. Traditional banks often have restrictions, like limiting the loan-to-value (LTV) ratio to 40% if you own more than three properties or requiring you to have a certain amount of assets under management (AUM) with them. With us, however, this is not an issue. We're here to help, so feel free to reach out, and we'll find a solution that works best for you.

Q11: How long will the interest-only loan last?

MT: Usually, our interest-only loans are designed as short-term solutions, not as replacements for traditional long-term bank loans. The duration typically ranges from 12 to 24 months, but sometimes, we can extend it a bit longer depending on the lender and good repayment conduct.

Q12: Can I finance a private condo in Florida valued at around $700,000, or do your loans typically start at amounts higher than $1 million? Thanks.

MT: Absolutely, we can assist with that. Financing a property of this value in the U.S. is not an issue for us. Our wholly-owned subsidiary, America Mortgages, is a licensed lender in the United States and provides U.S. loans starting from $150,000. Please provide your email address or contact details, and we'll reach out to provide you with more information on U.S. financing options.

Q13: Do you offer loans longer than 1 year?

MT: Yes, we do offer loans with durations longer than one year. Our loan terms typically range from 24 to 36 months at maximum.

Q14: Can you lend on strata title commercial?

MT: Yes, definitely, we can.

Q15: I own a shophouse. What LTV can you do on this? How fast can I get the money? There is no debt.

MT: If there's no existing debt on your shophouse, we can expedite the financing process. Upon signing, we can typically fund the loan within a week. LTV for your shophouse would typically range from 70% to 75%. If you'd like to discuss further details, feel free to reach out to me via email or WhatsApp, and we can continue the conversation.

Q16: Can a bridge loan be done with an overseas property?

MT: Certainly, of course. We can assist with overseas property. Usually, our lenders are onshore, meaning that if your property is located in the UK, for instance, we will work with a UK-based lender to facilitate the financing process.

Q17: You mentioned 1-2 weeks of processing time. Would that be sufficient for charge/pledge documents to be prepared?

MT: Typically, with a processing time of one to two weeks, there should be enough time to prepare mortgage documents, especially if the property is unencumbered. However, if there is an existing charge on the property, it may take longer than a week as we'll need to discharge the property before proceeding.

Q18: 8.5% is the starting rate; how do you qualify for that?

MT: Factors such as the client's profile and the property itself are considered to qualify. If you reach out to me, I can assess your specific situation and provide a more accurate rate fairly quickly.

Q19: Are you licensed in Singapore? By MAS, presumably?

MT: In Singapore, you do not need to be licensed to be a broker, but our Singapore lenders are licensed and regulated. Please note that our subsidiary, America Mortgages, is a licensed lender in the U.S.

Q20: How fast can you close a Singapore loan?

MT: The fastest turnaround time we've achieved for a Singapore loan was 48 hours. However, typically, for unencumbered properties, we can close within a week. If there is existing debt on the property, the process may take approximately a month, mainly due to potential delays at the bank's end.

Q21: What’s the minimum loan amount for a U.S. property and loan to value?

MT: The minimum loan amount for U.S. property is $150,000. Typically, the minimum down payment required is 25% for expats and 30% for foreign nationals.

Q22: What happens if the borrower is unable to repay the bullet in full? Is there flexibility to extend the loan term?

MT: If the borrower cannot repay the loan at the end of the term, there may be flexibility to extend the loan. Typically, if the borrower has maintained good repayment conduct by servicing the monthly interest payments on time, the lender may be willing to extend the loan. Additionally, if there is sufficient equity in the property, we can explore the option of refinancing with another lender if the existing lender does not wish to extend the loan. In most cases, if the borrower has demonstrated good payment conduct, the lender will be open to extending the loan term.

Q23: What is the loan to value for a Singapore bridging loan, and is my income and credit a need?

MT: Typically, the LTV ratio for a Singapore bridging loan ranges from 70% to 75% max. While you will be required to submit documents such as your Notice of Assessment (NOA) and credit report, income and credit requirements are not strict criteria for loan qualification. Even if you have had an adverse credit history or are retired without local income, you can still qualify for a loan. While these documents are necessary for submission, they do not significantly impact your eligibility for the loan.

Q24: Do you work with brokers?

MT: Yes, we collaborate with brokers through co-broking partnerships to facilitate transactions.

Get in touch with Madel Tan at [email protected] today!

Qualify without showing income!

Mortgage Broker Singapore

Banks DO NOT want you to know this!

Millions of homebuyers face this problem every day. 

You write off too much and don't show enough income to qualify for a traditional mortgage, or you are an entrepreneur with a lumpy income. In both of these scenarios (and many others), you would not be able to qualify for a mortgage.

What if you could qualify based on the "Rental Income" of the property and not your income?

Doesn't that make more sense?   

If the investment property generates enough rental income to cover the mortgage payments, then why would my income be relevant?

That is exactly how this works!

We launched the AM Rental Coverage Plus in January, and the feedback has been phenomenal; that's why I wanted to resend this loan program to our clients.

Here’s how it works:

AM Rental Coverage Ratio = 

Gross Rental Income / Total Debt Service ≥ 0.75:1

Total Debt Service = Mortgage expense (principal, interest, and taxes)

What Is a Good Rental Coverage Ratio?

The AM Rental Coverage Ratio needs to be 0.75 or above. This means the property is generating at least 0.75% income to mortgage obligations. A ratio below 0.75 indicates that the property may struggle to pay principal and interest charges in the future as it may not generate enough income to cover these expenses.

What Factors Affect the AM Rental Coverage Ratio?

AM Rental Coverage Ratio is affected by two items: operating income and debt service. I'll talk about this below, but Operating income (rent) is trending up, and debt service (mortgage rates) is trending down. That is to say, future margins will be higher (income up Plus costs down).

There are 2 constants in the U.S. real estate market:

1 - Property/Rental prices will go up (income)

2 - Rates will eventually be lowered (cost)

Here's why:

1 - There is a shortage of 3-7M homes in the U.S. (depending on the publication). With mortgage rates where they are now, the marginal buyer cannot afford to purchase a home and is forced to rent. This is echoed by many institutional funds looking to acquire as many single-family homes as they can.

Trend = income up

2 - Timing is debatable, but it is widely assumed rates will be lowered at some point.  

Trend = costs down

What makes the U.S. real estate market so unique is that you can buy a home today and then refinance it at a lower rate when rates fall or when the price goes up.   

There has never been a better time to own U.S. residential real estate as an investment!

In summary, America Mortgages' Rental Coverage Plus offers a groundbreaking solution for both U.S. expats and non-resident investors. By focusing on rental income instead of personal earnings, this program helps people overcome typical mortgage hurdles. With a dedication to clear and accessible mortgage options, America Mortgages remains at the forefront of real estate financing. Secure your path to financial success with AM Rental Coverage Plus today. Contact usnow to learn more and get started! www.gmg.asia

Turn your home equity into cash!

Bridging Loan Canada

Need cash fast?   

We can help you tap into your home equity today!

We are living in a world where the availability of credit has become nearly non-existent with retail banks preferring not to lend.  

We are conditioned to think of our local bank as the only option but in fact there are private lenders that can fill the gap where banks are unable to help.  

With 300 lenders available globally, we are confident to find a solution to meet your specific needs!

We offer home equity loans in the following countries:

USACanadaUKAustralia
SingaporeHong KongPhilippinesThailand

Typical use of funds:

RefinancingRenovationsCollege tuition
Pay off high-interest debtPersonal business needsPurchasing more property
Cash while waiting for saleDown-paymentsOther investments
  • Get approved in 24 hours and funding in as fast as 7 days
  • Up to 70% of your home’s value
  • Available for primary homes, second homes, and investment properties
  • Priority is speed of funding, certainty, and high loan-to-value
  • No age restriction in many countries

With our fast approval process, flexible terms, and international reach, we're here to support your financial needs. Reach out to our International Loan Officers today and let's turn your home equity into cash for whatever you need. Get started now!

www.gmg.asia

The BRRRR Method of U.S. Property Investing for Overseas Investors

France Residential Mortgages

The BRRRR (Buy, Rehab, Rent, Refinance, Repeat) real estate investment strategy is a popular approach that involves finding a mispriced/distressed property, fixing it up, renting it out, and then using a Cash-Out Refi to pull cash out towards another property purchase.

The mindset shift focuses on 2 things: finding a mispriced property, “forcing” appreciation, and then pulling cash out of the increased valuation in the form of a Cash-out refinance.

Yes…this is achievable as a Foreign National, Non-U.S. Citizen or U.S. Expat living overseas, AND it can all be done remotely!

America Mortgages and its parent company, Global Mortgage Group, are the world’s ONLY place you can obtain a U.S. mortgage outside the U.S. 

Speak to our Loan Officers to learn how an overseas investor can use leverage to lower your cash investment and increase your returns for your U.S. real estate investments! 

Don’t believe us?

Watch a recent interview with one of our clients, a young Singapore-based couple who used our loans for the BRRRR Method and built a 11-unit cash-flowing rental portfolio in only 3 years - all remotely from Singapore. They have recently quit their jobs and are now full-time U.S. real estate investors!

Here is how it works.

BUY

The key to the BRRRR method is purchasing a mispriced property. There is a fine line between distressed and mispriced. The more distressed, the cheaper it will be, so there is a higher potential for “forced appreciation,” but you will have to spend more on refurbishment.

Financing the initial purchase can be tricky since all lenders will require an appraisal on the property, which needs to meet certain criteria. A distressed property will unlikely meet this criteria, but a mispriced property may.

One option is to use a Short-term Bridging Loan to purchase the property and then use a traditional loan to refinance. Bridging loans are based on the asset value of the property and are more flexible in terms and conditions. This is a common approach to the BRRRR method.

Another option is, of course, to pay for the home with cash and then refinance.

REHAB

This takes a little expertise, but costs of renovations and materials are very inexpensive in the U.S., and it is fairly easy to get everything at Home Depot, IKEA, etc. You will need to find a good contractor in the neighborhood, but generally speaking, most of the REHAB should be cosmetic and nothing foundational. That includes painting, flooring, changing bathrooms, kitchens, etc.

The key to the BRRRR strategy is calculating the After-repair Value since that will be the value that you refinance once the rehab is complete.

A common rule of thumb is the 70/30 rule. If the ARV value is $300,000, you should not pay more than 70% or $210,000.

RENT

Finding rental comps is fairly easy - even if it's for short-term rentals (Airbnb, VRBO, etc.). This does require some work, but Zillow and AirDNA are good places to start your research. 

Choosing tenants requires a little common sense, but a simple checklist would be:

  • Good credit score (if they don’t pay their banks, they won't pay you on time)
  • A stable job with a steady income (name of company, position, how long they have been there, etc.)
  • No criminal record
  • Positive references
  • Young family (families don’t normally have time to host parties)

I personally use the 1% rule in real estate investing, and only in the U.S. can you find these deals. Here is how it works - multiply the purchase price of the property (ARV) by 1% to determine the base level of rent. In this case, financing will need to be less than 1%. More later.

REFINANCE

Here is the big mindset shift - to use a Cash-out refinance towards the next purchase, which often means your net initial outlay is ZERO!

You can qualify for our AM Rental Coverage Plus loan program by using the rental income of the property to cover the mortgage costs.

REPEAT

The final step in the BRRRR method is to repeat the steps again. There is no rush here, and it’s important to learn from the entire process.

Pros and Cons of the BRRRR Method

Pros - With a limited cash outlay, you can start to build a portfolio of cash-generating assets, “force” equity appreciation, and use debt to your advantage! Remember, debt is not taxed in the U.S.!

Cons - This takes work, but we think the satisfaction of seeing your assets “Pay You” is worth the effort. Work includes research, building a team on the ground, finding the properties, and maximizing cash flow, to name a few. 

Example (for illustration purposes)

Home price: $200,000

Nearby comparables: $250,000 - $300,000

Renovation costs: $30,000

After-repair value: $310,000

After-repair monthly rent: $2,500

Scenario 1 - All cash payment

  • Purchase price = $200,000 + Rehab $30,000 = $230,000 cash outlay
  • After-repair value = $310,000
  • Cash-out refinance using AM Rental Coverage Plus =  70% x $310,000 = $217,000
  • Monthly mortgage = $1,700
  • Gross monthly rental income = $2,500
  • Net rental income = $800
  • Now, you have $217,000 towards your next investment.

In this scenario, you spent $230,000, and then borrowed $217,000, which means your total cash outlay was $13,000.

  • With $13,000 spent, you are now earning $800 monthly!
  • After 12 months, you will have earned $9,600 in passive income (Yes, 74% return!)
  • After 16 months, the property would have paid back your entire investment!

Scenario 2 - Bridging loan to purchase

  • Purchase price = $200,000
  • Bridging loan = 70% loan to value x $200,000 = $140,000 loan = $60,000 down payment
  • Bridging loan term = 12 months @ 12% per annum, interest-only
  • Total Bridging loan interest = $16,800
  • Down Payment = $60,000
  • Rehab = $30,000
  • Total initial outlay = $90,000
  • After-repair value = $310,000
  • Cash-out refinance using AM Rental Coverage Plus =  70% x $310,000 = $217,000
  • Monthly mortgage = $1,700
  • Gross monthly rental income = $2,500
  • Net rental income = $800
  • Pay back Bridging Loan = $217,000 - $140,000 = $77,000
  • Subtract Bridging loan interest = $77,000 - $16,800 = $60,200
  • Now you have $60,200 towards your next investment

In this scenario, you spent $90,000, then borrowed $60,200, which means your total cash outlay was $29,800

  • With $29,800 spent, you are now earning $800 monthly!
  • After 12 months, you will have earned $9,600 in passive income (Yes, 30% return!)

It gets better!

In both scenarios - after 12 months, you can renegotiate a higher rent once the lease term ends and refinance the loan to a lower 30-year fixed-rate mortgage at a higher property value!

Money in GOES UP + Money out GOES DOWN = MORE MONEY!

There are strategies for finding the best states and cities to invest in. If you want to learn how to identify which city to start your BRRRR Method journey, please feel free to contact us!

In conclusion, the BRRRR method offers a great opportunity for investors from overseas to invest in U.S. real estate. America Mortgages, along with Global Mortgage Group, is your go-to for getting U.S. mortgages abroad. With success stories like the couple who built a rental portfolio from afar, it's clear this strategy works. For those keen on making the most of their investments, our team is here to help. Reach out today at [email protected] to learn more about how the BRRRR method can boost your real estate journey.

www.gmg.asia

Wholesale Lending and Why it’s Important!

Wholesale Lending - Mortgage Brokers USA

Key takeaways:

  • A wholesale mortgage lender is an institution that funds mortgages and offers them to third parties, such as a mortgage broker, bank, or credit union
  • Non-bank lending accounts for about half of all U.S. mortgage origination
  • Wholesale mortgage lending differs from other mortgage options in that it requires the borrower to work with a mortgage broker instead of the lender
  • Wholesale lenders can offer cheaper rates and more relaxed eligibility guidelines compared to traditional lenders 
  • America Mortgages is the only U.S. mortgage broker outside the U.S. that focuses 100% of their business on Foreign Nationals and Expats living overseas

Wholesale Lending, Mortgage Brokers.... and Why It’s Important for International Clients 

The concept of wholesale lending is not understood outside the U.S. but actually accounts for about half of all mortgage origination in the U.S. 

One way to think about a wholesale lender is a bank that does not take customer deposits and only buys and sells mortgages.

A research article by The Ascent highlights the presence of non-bank financial institutions as the top three largest mortgage lenders in the U.S.

According to The Ascent's analysis of the top 25 mortgage lenders, 72% are independent mortgage companies, and 28% are banks!

Thanks to a regulation called Dodd-Frank after the financial crisis, retail banks only focused on “Prime” borrowers since these mortgages eventually would be sold to Fannie Mae, a government-linked entity providing liquidity to the mortgage market.

Prime borrowers are U.S. citizens with very good U.S. credit who hold high-earning, long-tenured, salaried jobs and borrow for their primary residence. Nearly all other types of borrowers fall under wholesale mortgages.

This includes our clients => international borrowers, both foreign nationals and overseas expats!

The Customer Journey

Whether it's a purchase loan or a refinance - retail lenders work directly with individual borrowers, while wholesale mortgage lenders don’t. 

Instead, they partner with mortgage brokers, who work with you to find the right loan — often at a discounted rate — and prepare your application.

America Mortgages => The world’s only U.S. mortgage broker with a 100% focus on Foreign Nationals and U.S. Expats!

What is a wholesale mortgage lender?

A wholesale mortgage lender is an institution that funds mortgages and offers them to third parties, such as a bank, credit union, mortgage broker, independent mortgage company, or professional.

How wholesale lending works

In wholesale lending, the borrower doesn’t have direct contact with the lender; instead, the borrower interacts with the third-party mortgage broker, who is responsible for facilitating the loan origination and application process and communicating throughout the lender’s underwriting. The mortgage broker works for the clients, and not just one bank or wholesale lender. This gives the clients more options of loan programs and qualifications.   

A wholesale lender lets mortgage brokers know what the loan options and terms are, and the third party then matches borrowers with an appropriate loan.

Once the loans close, wholesale lenders typically sell them in the secondary mortgage market to free up capital to fund more mortgages.

When working with America Mortgages, you gain access to our extensive network of over 50 wholesale lenders and will have access to competitive rates and more flexible loan options and requirements.

If you're seeking the best mortgage rates and expert guidance through the lending process, opting for the broker and wholesale lender route is your best choice. 

America Mortgage's sole focus is on overseas borrowers and we have the knowledge and experience to meet your specific needs. This is all we do!

The role of mortgage brokers in wholesale lending

You’ll work with our international-based loan officers to complete each step in the application process. Once your application is ready for review, we will coordinate with the wholesale lender’s underwriting team for a pre-approval in 72 hours.

You can then use the pre-approval to show proof of financing when you start house-hunting.

Our job as a mortgage broker doesn’t stop with assisting the prospective borrower with their mortgage application. 

We will also work to find you the best deal on a mortgage. Since we will have access to loan programs specifically designed for overseas borrowers, you will be able to secure more competitive rates and terms than you would if shopping for a home loan independently.

More importantly, since we understand the requirements of foreign borrowers significantly better than any U.S.-based mortgage broker, our team will be more effective and efficient in guiding you through the entire loan process.

Wholesale mortgage lending process

Below is an overview of what to expect if you decide to work with one of our internationally-based U.S. loan officers:

  • Step 1: Connect with our International Loan Officers to complete a standard loan application 1003 and gather documentation the wholesale lender needs to make a decision
  • Step 2: The mortgage broker confirms your application is complete and submits it to the wholesale lender for review
  • Step 3: Upon receipt, a member of the wholesale lender’s underwriting team analyzes your loan application, along with the supporting documentation, and verifies the entries to make a lending decision
  • Step 4: Once your application is approved, the mortgage broker provides you with a commitment letter from the wholesale lender detailing the loan terms and any applicable conditions
  • Step 5: The mortgage broker coordinates with the wholesale lender to close and fund your home loan. If there are any conditions the borrower must satisfy for the loan to close, the mortgage broker notifies the borrower during this step
  • Step 6: Once all conditions are met, the wholesale lender issues the “clear to close” to the mortgage broker, and the broker notifies the borrower. The borrower sends their down payment and the funds for closing costs to the title company shortly before closing
  • Step 7: At closing, the borrower signs the loan documents at the local embassy to finalize their end of the transaction and mails the documents to the title company
  • Step 8: The wholesale lender closes and funds the home loan

Key points of wholesale mortgage lending

  • A mortgage broker will search for the best loan option from a network of wholesale lenders
  • Less stringent eligibility guidelines
  • Potentially access more competitive rates and flexible loan terms
  • Personalized support from a mortgage broker
  • No direct contact with the lender
  • Mortgage broker fees  
  • Higher likelihood of loan sell-off following closing

Is wholesale mortgage lending right for you?

Getting a mortgage from America Mortgages is your only choice outside the U.S. if you are a non-resident foreign national or overseas expat looking to purchase an investment property or second home. 

A U.S.-based mortgage brokers WILL NOT know the ins-and-outs of borrowers living overseas, but THIS IS ALL WE DO - and we are in your time zone and speak your language!

Here are our popular U.S. loan programs. 

In conclusion, understanding the dynamics of wholesale mortgage lending is crucial for international clients, especially non-resident foreign nationals and overseas expats.

At America Mortgages, we navigate this landscape with over 50 established relationships with wholesale lenders, offering you access to competitive rates and flexible loan options.

If you're seeking the best mortgage rate and a guided lending process tailored to your international needs, reach out to us today to take the first step toward securing your U.S. property with confidence.