A Secret Strategy Top Real Estate Investors Use

International Mortgage

A secret many wealthy U.S. real estate investors use is the practice of holding properties within an LLC. 

Using an LLC to hold real estate for investments has almost become a given with many tax benefits, liability protection, and acceptance by lenders. If you think about it, any company earns revenue, and in this case, LLC’s revenue comes from the rental income of the property. Also, like any company, you have operating expenses related to running the company (your company-related tax deductions) - more on this later. 

In this article, we'll break down how an LLC operates and dive into the advantages of opting for an LLC when dealing with rental properties.

Opening an LLC

An LLC not only shields you from liabilities but also brings in tax advantages. This offers a seamless and flexible approach to handling your investment efficiently.      

Process: 

  1. Choose a State:
    Decide in which U.S. state you want to establish your LLC. Each state has its own rules and regulations regarding LLC formation.
  2. Name Your LLC:
    Choose a unique and compliant name for your LLC. It should comply with the naming rules of the state.
  3. File Articles of Organization:
    Submit the required paperwork, usually called the Articles of Organization, to the appropriate state agency. This is often the Secretary of State's office.
  4. Operating Agreement:
    While not always required, it's advisable to create an operating agreement that outlines the structure and operation of your LLC.
  5. Obtain an EIN:
    Apply for an Employer Identification Number (EIN) from the IRS. This is like a Social Security Number for your LLC and is necessary for tax purposes. 
  6. Bank Account:
    Once your LLC is approved, you can open a business bank account. While banks do not help in the formation of the LLC, they are crucial for managing your LLC's finances.

The benefits of using an LLC to hold a rental property

  1. Single or Multiple Members Allowed
    An LLC allows for flexibility in membership, accommodating either a single member or an unlimited number in a multi-member LLC. This flexibility enables individual investors to enjoy an LLC's benefits and protections. However, if the LLC is treated as an S-Corporation for tax purposes, there is a 100-member limit.
  2. Pass-Through Entity for Tax Purposes
    An LLC is treated as a pass-through entity for tax purposes, meaning profits or losses flow through to each member based on their ownership percentage. Members report income or loss on individual tax returns and pay taxes based on personal income tax rates.
  3. Flexible Pass-Through Structure
    While LLC profits and losses are generally distributed based on ownership percentages, members can agree to a different allocation in the operating agreement. For instance, a member in a higher tax bracket might seek a larger percentage of the depreciation expense for a more substantial tax write-off.
  4. Management Flexibility
    The operating agreement of an LLC can be tailored to allow management flexibility. For example, one member with property management expertise may handle daily property details, or the operating agreement may mandate that all members vote on significant decisions like refinancing or sale of the property.
  5. One LLC for Each Rental Property
    Many investors opt to establish a separate LLC for each rental property they own. This adds an extra layer of protection by isolating potential claims against one property from the entire real estate portfolio for those with multiple rental properties. 
  6. Contribution of Personal Assets
    Members have the option to contribute personal assets, such as real property or funding, to an LLC. The LLC can also pay reasonable interest to members for loans until the borrowed money is fully repaid.
  7. Easy Transfer of LLC Interests
    Shares in an LLC may be sold or transferred to new members based on the terms outlined in the operating agreement. Real estate held under an LLC can remain within the LLC's control even when under new members.
  8. Professional and Business-Like Image
    Holding rental property under an LLC provides real estate investors with a more professional business appearance. This could enhance credibility with tenants, lenders, and vendors.
  9. Inexpensive and Straightforward Formation
    Depending on the state forming an LLC can be a relatively simple and cost-effective process, from $50 to a few thousand, depending on the state. 

Certain states impose a minimum annual LLC tax, require annual reporting fees, and may necessitate payment of registered agent fees to an agent for service of process in the state where the property is located.

Choosing an LLC to hold a rental property can shield an investor's personal assets in case of a lawsuit. Typically, in a legal dispute, only the business assets would be at risk, offering a protective barrier for personal belongings.

What is the best state to form an LLC in? 

While forming an LLC in your home state is typically advantageous, there are exceptions for non-residents and specific LLCs. Non-U.S. residents have the flexibility to choose any state, with Wyoming and Delaware being recommended options. For real estate LLCs, the "home state rule" doesn't apply. According to doola.com, Delaware provides business owner anonymity, as it doesn't require the owner's name on entity formation documents. Wyoming allows listing a "nominee" as the LLC owner for added privacy.

Pre-Approval Process

Launch your U.S. real estate investment journey confidently with America Mortgages' 72-hour pre-approval process. Our team simplifies required documentation and timeframes, providing solid assurance. House shopping is much easier when you have an official lender pre-approval.

Tax Considerations

Effortlessly navigate tax complexities with America Mortgages' tax partners. Understand all the tricks that billionaire real estate investors use to minimize tax liability and maximize profit potential. Consult with our tax professionals for an optimized strategy.

Property Management

Ensure remote property maintenance with America Mortgages' property management partners. Our team connects you with reliable day-to-day management, offering peace of mind even when you're not physically present.

Legal Assistance

For smooth transactions as a foreign investor, legal advice is crucial. America Mortgages connects you with experienced professionals for essential guidance.

Property Insurance

Protect your property with suitable insurance through America Mortgages' trusted partners. Obtain the right coverage for a well-structured risk management strategy, ensuring peace of mind for your investment.

Stay Informed

Stay updated on U.S. real estate changes and regulations affecting foreign investors. Continuous education is essential for informed decision-making and adapting to evolving market conditions.

Navigate your U.S. real estate investment journey with America Mortgages. Together with our partners, we provide comprehensive support from swift LLC formation and a 48-hour pre-approval process to tax expertise and reliable property management. Let us guide you in developing clear exit strategies and staying informed about market changes. Trust America Mortgages for a seamless and informed U.S. real estate investment experience. Contact us today at [email protected] for a seamless investment experience.

www.gmg.asia

Canadian Real Estate Outlook for 2024

Australia Mortgage Rates

Did you know we have a very active Canadian mortgage business with teams based in Vancouver, Calgary, and Toronto?

Here is an updated copy of our GMG Canada Loan Program

Canadian Real Estate Outlook for 2024…eh!

Like its southern neighbor, we've watched the Bank of Canada hike up their benchmark interest rate. Now, there's talk that maybe, just maybe, the housing market's rough ride could smooth out in 2024. But predicting exactly when this will happen and how strong the rebound will be isn't easy. It's got a lot of us on the edge of our seats, wondering if it's the right time to jump into the market.

The central bank's rate is like the heartbeat of Canada's housing market. If the predictions are right and we see interest rate cuts in 2024, it could be a break for those itching to buy a home. But it's not all sunshine and rainbows yet. Despite the Bank of Canada hitting a pause on rate hikes for a bit, a survey by Ipsos for Global News found that a whopping 73% of Canadians feel locked out of the housing market because of these high rates. It's especially tough for millennials and folks in British Columbia and Quebec.

Darrell Bricker at Ipsos Global pointed out to Global News that while these high borrowing costs are a barrier, they might also nudge some sellers who can't keep up with their mortgage payments to sell.

As for the 2024 housing market, Robert Hogue from RBC thinks we might see some action before the busy spring season. But high borrowing costs could keep a lid on things in the first half of the year. If mortgage rates tied to bonds start to dip, we might see some buyers, especially investors, jumping in.

Hogue doesn't think sellers will flood the market, even though a lot of folks will have their mortgage terms ending. He believes the mortgage stress test should help prevent a wave of forced sales. He's expecting a bit of a boost in demand if we see interest rate cuts, but nothing crazy until borrowing costs really start to drop.

Over at Royal LePage, they're also predicting a pick-up in sales and prices in the second half of 2024. They even think home prices could get close to their pandemic peak by the end of the year.

Phil Soper from Royal LePage says there's a lot of pent-up demand. A drop in interest rates could be the sign people are waiting for to feel confident that the price of the home they buy today won't drop tomorrow.

But it's not just about buying. The rental market has been through the wringer, too. Even though overall inflation has cooled down, the cost of shelter remains high. There's some hope that if borrowing costs ease up, it might also take some pressure off the rental market, as more renters might buy homes and free up rental units.

But don't expect miracles in affordability. Housing affordability hit a 41-year low in 2023, but there's been a slight reversal recently, with home prices dropping in some areas. However, a big factor in whether housing becomes more affordable is the supply. We need a lot more houses to meet the demand, especially with Canada's immigration levels.

The federal government has plans to boost home construction, but even with that, it might not be enough to keep up with the demand and make housing truly affordable.

To sum it up, 2024 is shaping up to be a crucial year for the Canadian housing market. There are a lot of promises and proposals floating around, and it's time to see if they actually pan out. We're all waiting to see if this is the year things start to turn around in the housing world.

[email protected]

What just happened? + How to bet alongside Blackstone!

Bridge Loan Mortgage

What a year it’s been and the resiliency of asset markets in the face of everything that was thrown at it was truly amazing!   

We are living through unprecedented times with technology and crypto experiencing another bull market, U.S. elections in 2024, and potential rate cuts around the world. Could we be “back to the races” again this year?

One exercise that we all do at the beginning of the year is to adjust our personal investment portfolio to reflect what we expect to unfold in the world over the short, medium, and long term.

For many, including myself, that means increasing the allocation to crypto and U.S. real estate investments.

The simple key to making long-term money is to create a portfolio of non-correlated investments, and there is no better time to increase your U.S. real estate investment exposure.

Our goal in 2024 is to bring more education, experience, and strategies to our client's real estate investing.

We are living through unprecedented times, and we want to be there for you on your journey as an international real estate investor.

Message me if you want to know what I recommend as your real estate exposure vs. your overall portfolio.

U.S. Real Estate Market - What Just Happened?!

In a year that saw:

  • 10-year Treasury yields at 5%
  • 30-year mortgage rates at 7-8%
  • Inflation as high as 6.5% 

How did:

  • Home prices rise across the country; in some metro areas 10-15%
  • S&P +25%; Nasdaq +55%

How did everyone get it wrong?  

In hindsight, it is clear to me that the extent of the positive impact of various layers of government stimulus going back to COVID (including the Fed’s BTFP) was severely misunderstood and underappreciated.  

Now, with inflation and employment (Fed’s dual mandate) seemingly under control, most of the world now expects around a 75 bps cut in Fed Funds rates (echoed by the Fed’s new dot plot).  

Hat’s off to our GMG Research team, which mid-2022 called for a supportive U.S. property market in 2023, but never did we expect a rising market to this extent.   

Our thesis was simple - it was based on the fact that: 

  • 24% of homeowners have their mortgages < 3%
  • 63% are locked-in < 4% and 
  • 83% of homeowners have mortgages < 5%
  • Severe lack of supply 

Existing Homes

In any marketplace, you need supply and demand. For U.S. real estate, the supply is Existing Homes and New Homes. Existing Home Sales are about 90% of Total Home Sales in the U.S.

Given that 83% of existing homeowners have a mortgage < 5%, they would have to be under financial stress to sell, given their new mortgage would cost 7-8%. As you can imagine, Existing Home Sales is at a 13-year low!    

New Homes

It’s widely known that there is a major shortage of homes in the U.S.; between 3-6M units, depending on what you read.

Lack of Homebuilder Motivation

With higher borrowing costs, higher commodity prices, and higher wages - there is no financial motivation for homebuilders to increase their development, given the lower margin potential from higher costs.  

More importantly, demand and affordability will be dampened by higher-for-longer mortgage rates. 

Remember, the large homebuilders are all publicly traded companies with CEOs compensated on share price performance. 

Higher profit => Higher EPS => Lower PE => Institutional Buying => Higher share prices => Higher CEO bonuses!

Sun Belt is Rising!

Elsewhere, the national reshoring of manufacturing is happening; it's happening now, and it's happening fast!

States like Georgia, Texas, and Florida are experiencing an unprecedented influx of employment seekers to match the growing opportunities.

Between January 2020 and January 2023, rents for a two-bed detached home increased about 44% in Tampa, Florida, 43% in Phoenix, and 35% near Atlanta. 

Why is this important for you (international property investor)?

Many Americans will not be able to afford a mortgage even if rates fall to 5-6%, so they will have to rent.

In the states mentioned above, we are seeing gross rental yields of 12% already!

I have no doubt that rental yields in these states will be 15% sooner than we think.  

You know who else knows this?

Wall Street, aka Private Equity (aka Blackstone and its pals)

Single-family homes are the next big institutional investment opportunity given its sheer scale and for the reasons I mentioned above.  

There have been many articles published this year about how institutions may own up to 40-60% of single-family home supply by 2030!

Hear Bobby Kennedy Jr’s speech on this

As an investment banker for over 20 years with Blackstone as its client, I can assure you if there is money to be made, they are going to make it!

The Perfect Storm to Invest in U.S. Real Estate

  • Extremely supportive supply demand
  • Low-entry price point
  • Ease of transaction
  • High leverage (even for foreign nationals living overseas)
  • Tailwind of institutional buying and 
  • Plenty of ways to maximize cash flow (lower tax)

Home prices will certainly go higher, given the expectation of lower rates in 2024!

If you are interested in taking your first step in owning a U.S. real estate investment property, send me a private message, and I can walk you through the entire process:

  • How to find the right city to invest in
  • Which cities have the highest rental yield
  • Setting up an LLC and bank account
  • U.S. tax specialist specializing in international investors
  • Property manager
  • Realtor….and, of course,
  • Financing for foreign nationals or expats living overseas

2023 In Review

Bank stuff…

Silicon Valley Bank was put into receivership after it failed to raise needed capital. SVB’s closure was the largest bank failure in U.S. history since the 2008 financial crisis. This led to the collapse of cryptocurrency-focused Silvergate Bank and Signature Bank as well.

The implosion of these three small-to-mid-sized U.S. banks ignited contagion fears across the globe in the months that followed, prompting the Federal Reserve to set up a US$12B emergency lending program - known as the Bank Term Funding Program (BTFP). More on this later.  

The programme couldn’t save First Republic Bank from closing down and was ultimately sold to JPMorgan Chase. 

This was just an amuse-bouche for what happened next as Credit Suisse collapsed with UBS paying only CHF 3B to save the company, a deal brokered by the Swiss government. Google “AT1 bonds,” and the story gets even crazier. 

Crypto stuff…

  • January - BTC $16,000; ETH $1606; SOL $9.9
  • February - Kraken shuts down
  • March - SVB collapses; Arbitum launches ARB token
  • April - ARK refiles Bitcoin ETF
  • May - DOJ investigation on Binance for Russia sanctions
  • June - SEC sues Binance CEO; Blackrock files for spot Bitcoin ETF; Fidelity, Wisdom Tree, VanEck refiles Bitcoin ETV
  • July - Blackrock CEO says BTC “could revolutionize finance”; Ripple won ruling
  • August - Paypal launches stablecoin, Grayscale wins lawsuit with SEC, 
  • September - Nomura launches Bitcoin fund
  • October - 1st ETH futures ETF launched
  • November - SBF found guilty; Blackrock files for spot Ethereum ETF; Binance settles lawsuit and CEO steps down
  • December - BTC $40,000; ETH $2,396; SOL $105 

Bad actors were removed, Binance settled, Ripple won, Bitcoin spot ETF (only a matter of time), and MicroStrategy bought $600M of BTC at $42K last night!

AI stuff…

It’s mind-boggling that ChatGPT reached 100 million users in just 2 months after launch. Just guessing here, but it must be the fastest adoption of any form of technology, language, or service in the history of humankind. The scary thing is that it’s only getting started. It’s now a necessary tool for nearly all organizations (ChatGPT is writing this now…just kidding).

An event prescient of things to come was the Hollywood strike, which, at the core, was about protecting Hollywood jobs from AI. The delay of Dune 2 till March 2024 was the biggest disappointment to me personally. 

Nvidia, the only company that is able to make chips capable of crunching AI’s large language models, saw its stock +200%. The rest of the tech incumbents went along for the ride: Meta +250%, Tesla +100%, Google, and Microsoft, both +50%+. 

Fun stuff….

  • Taylor Swift’s x ERAs tour is generating more GDP than many small countries. I’m a massive Swiftie, so bummed I couldn't get tickets.
  • Taylor Swift x Travis Kelce
  • Barbie x Oppenheimer
  • Coronation of King Charles III and Camilla

Sad stuff…

  • Hamas and Israel
  • Hawaii forest fires
  • Titan x Titanic
  • Matthew Perry, Tina Turner, Sinead O’Conner

Crazy stuff…

  • Twitter rebrands to X
  • George Santos gets expelled from the House of Representatives
  • Kevin McCarthy gets ousted as Speaker of the House
  • Torrential rain flooded Burning Man (I was supposed to go)
  • The Cricket World Cup breaches 1 trillion viewing minutes globally
  • Watching Harvard and UPenn botch their response to the ME events
  • Ozempic, a diabetes drug popular with Hollywood actors to lose weight, became mainstream to the point its manufacturer, Novo Nordisc, was the largest market cap stock in Europe, larger than LVMH!
  • Even crazier, General Mills had to research the impact Ozempic had on their business, given the potential lack of calorie consumption.

Sports stuff…

  • Messi-mania goes nuclear in Miami
  • Inter Miami is the most searched sports team on Google
  • Lebron surpassing Kareem in most points scored
  • South Africa wins the Rugby World Cup
  • Australia wins the Cricket World Cup

Update of our Global Financing Capabilities

  • International Residential Mortgages
    U.S.,  Canada,  Mexico,  U.K.,  France,  Spain,  Portugal,  Italy,  Dubai,  Singapore,  Japan,  Thailand,  Australia
  • International Asset-backed (Bridging) Loans
    U.S.,  Canada,  U.K.,  Singapore,  Thailand,  Philippines,  Australia
  • Asian Real Estate Structured Debt Financing
    Most of Asia
  • Listed Share Financing
    Most of Asia and the U.K.

I want to thank all our stakeholders for joining us on our journey to disrupt how international investors secure financing for global real estate investments.  

We wish you abundant health, wealth, and happiness in 2024!

Happy Hunting!

[email protected]

What to Expect in 2024 [U.S. Real Estate]

As we usher in 2024, a world of exciting opportunities awaits in the U.S. real estate market, particularly for foreign nationals and U.S. expats seeking to make strategic investments.

What to Expect in 2024

Zillow.com predicts the prices of homes in the United States will increase by 6.5% from July 2023 to July 2024. This increase is based on rates remaining relatively unchanged. The prediction suggests that the value of homes is likely to increase, mainly due to the lack of inventory and owner-occupied buyers waiting for interest rates to decrease. What will happen to property prices if interest rates decrease

The housing market is constantly changing, subtly shifting over time. For those investors with a keen eye, there's an opportunity to discover a unique and profitable niche. The current state of real estate, marked by a standoff between buyers and sellers due to high mortgage rates, creates an environment where savvy investors can make strategic moves. Suzanne Miller from Empire State Properties notes that despite the rising home prices, many potential buyers are holding back due to these higher mortgage rates.

In line with Bank of America's 2023 Homebuyer Insights Report, this shift in the market is already underway. In October, nearly 40% of those looking to purchase homes expressed their determination to proceed with house hunting, showing little regard for waiting until conditions improve. This contrasts sharply with the sentiment observed just six months prior, where only 15% of potential homebuyers demonstrated a similar eagerness to move forward.

Renowned real estate expert Barbara Corcoran anticipates a significant market shift when interest rates drop. "The minute those interest rates come down, all hell's going to break loose, and the prices are going to go through the roof," she said. "Right now, sellers are staying put. But they're not going to stay put if interest rates go down by two points. 

"It's going to be a signal for everybody to come back out and buy like crazy, and the house prices [will likely] go up by 20%," she said. "We could have COVID [market] all over again."

Advantage for International Investors

International investors have a clear advantage. The National Association of Realtors reports a 9.6% decline in annual foreign investment in U.S. existing home sales, totaling $53.3 billion. This decline, along with the lack of owner-occupied buyers sitting on the sidelines, means less competition, making it an excellent time to get into the U.S. real estate landscape.

Rental Opportunities

Understanding the opportunities for profitable investments, overseas investors should consider exploring rental options and the potential returns they offer. As home prices rise and available properties become scarce, there are numerous possibilities for U.S. investment properties with high potential returns.

The latest report from ApartmentLists highlights cities that have experienced the most significant growth in the past 12 months. Leading the list are Indianapolis (+6%), Columbus, OH (+6%), Oklahoma City (+6%), Hartford (+5%), Chicago (+6%), and Cincinnati (+6%). Since the start of the pandemic, Tucson, AZ, has seen a substantial 37% increase in rents, while Tampa, Florida, has also seen significant rent growth, up by 39%.

Wallethub also compiled a comprehensive list of cities with thriving real estate markets and high buyer demand:

Seize the Opportunities with America Mortgages

As we navigate 2024, whether you're a seasoned investor or just entering the world of real estate, now is the time to act. Our team is ready to guide you through your journey, ensuring that you not only invest but thrive in the ever-evolving real estate landscape.

Our 100%-owned subsidiary, America Mortgages, focuses only on providing U.S. mortgage financing for foreign nationals, non-residents, and U.S. expats. 100% of our clients fit that profile, and no one does it better. 

Reach out to us now to schedule a commitment-free consultation with one of our U.S. mortgage loan officers based worldwide; simply use this 24/7 calendar link to book an appointment.

www.americamortgages.com

40-Year High

International Mortgage Broker UK

Between 2022-2023, the U.S. hosted over 1,000,000 international students, +12% from the previous year, the fastest growth rate in more than 40 years! (The Open Doors® 2023 Report on International Educational Exchange, Nov 13)

Let me repeat this…

The U.S. saw a 40-year high growth rate in international students attending U.S. universities between 2022-2023!

What was also interesting was Singapore (our headquarters) and India saw record numbers of students attending U.S. colleges. 

Did you know…

We created the world’s first U.S. mortgage, which allows your child to be the tenant, AM Student+.

Education

From our client surveys, Education was given as a key reason for their U.S. real estate investments. 

Most of the time, the objective of owning real estate to earn income almost always comes down to "could I live there one day"? 

A popular strategy for our clients is to purchase an investment property "in anticipation” of sending their child to college, set up a base in that city, and earn rental income along the way.  

Then upon college acceptance, the parents can live in the property when visiting and rent it out when it's not in use. 

Upon graduation, the price appreciation may even pay for college if they decide to sell. 

Another popular option, if the child stays in the U.S. for work, is to transfer the property to the child's name as a "graduation gift" to help build up their credit profile and/or earn rental income. Why high schools? 

Here are the following “Education-related” reports - there is plenty of good information here - including the best Public and Private high schools in California, Texas, Florida, and New York:

1. Top U.S. High Schools Property Investment Guide eBook

2. Buyers Guide to California - Education drives prices and rents

3. Buyers Guide to California - Demographics

Here is a list of our partners that can help with your U.S. real estate investment decision:

If you have any questions, please feel free to reach out to me directly at [email protected] or my personal mobile +65 9773-0273

www.gmg.asia

Global Mortgage Group Funds Singapore Real Estate Bridging Loan in 72 Hours

French Mortgage Broker

GMG HNW Solutions Introduces Listed Share Financing

Global Finance Herald - Bridge Loan Mortgage

France Alert! 100% Financing Available for Luxury French Property!

France Residential Mortgages

GMG Presents...

Mortgages for Luxury French Property with... 

100% Purchase Price Financing!

THE ALLURE OF THE FRENCH RIVIERA

Nestled on France's southern coast, near the Italian frontier, the French Riviera showcases some of the most enchanting towns you could envision. With its chic allure, this region has magnetized celebrities for generations. Boasting approximately 300 sunlit days annually, its climate is nothing short of ideal. From designer boutiques, to the array of nearly 40 Michelin-starred restaurants, it's a destination of elegance. It's also a thriving community of English and American expatriates.

TOP DESTINATIONS FOR PROPERTY OWNERS

Surrounded by both the majestic mountains and the serene sea, the Riviera promises a perfect balance. While the coast will be your regular retreat, snow-capped peaks are always within reach for a winter getaway. Explore the top places to reside in the Riviera:

  • Antibes: Originating from the 16th century, Antibes exudes a maze-like ambiance. Renowned for its breathtaking golden glow, which has attracted artists over the centuries, it houses magnificent villas in the wooded Cap d'Antibes. 
  • Cannes: Apart from the high-end boutiques and its iconic film festival, Cannes is a stone's throw from the secluded Lérins Islands. 
  • Nice: As one of the significant French cities, Nice offers a vibrant nightlife, chic boutiques, and diverse museums. 
  • Saint-Jean-Cap-Ferrat: This petite peninsula is the address for some of the Riviera's most luxurious estates and also offers upscale dining options and serene beaches with panoramic views.
  • Saint-Tropez: Famed for its pristine beaches and dynamic clubs, Saint-Tropez is a haven for entertainment seekers but also has developed into a family holiday destination. 

Now to the good stuff....

FINANCING FOR FOREIGN NATIONALS

Problem: Securing financing for Foreign Nationals to purchase property in France has always been difficult - time zone, language, lack of understanding for both lender and borrower, and other issues. Most banks and financing institutions are not focused on Foreign Nationals as the domestic market is strong, and they have enough business to satisfy them.

The GMG Solution: Our GMG European Lender Acquisition team has worked with a few smaller private banks to create a financing solution for our international clientele with a structure that suits their specific needs. 

ELIGIBILITY AND REQUIREMENTS

For Foreign Nationals seeking finance in this exclusive domain, banks have set specific benchmarks to evaluate potential candidates.

1. Geographical Preference

  • Prime Locations: It's imperative for the property in question to be situated in sought-after areas. This encompasses regions such as Paris, leading stations in The French Alps, and The French Riviera.
  • Emerging Desirability: The South West has been gaining traction recently, making it an area of interest for Private Banks.

2. Property Type

  • Prospective properties should fall under categories such as: Luxury Apartments, Modern Residences, Contemporary Villas, Maisons de Maître, Manoirs, or Impeccably Refurbished Chateaux (case-by-case basis).

3. Loan Size

  • Minimum loan amount is €1M, excluding ancillary fees.

4. Our 100% LTV Solution!

  • In this structure, the client will invest a portion of funds equal to 30-50% of the loan amount into an interest-earning product.
  • In return, the bank will finance 100% of the purchase amount of the property (excluding fees)! 
  • Client earns investment income, which may be more than the interest paid on the mortgage = positive carry.

5. Age Bracket

  • Applicants should be no older than 65 years at the submission time, with a preference for those below 60.

6. Financial Overview

  • Generally, the focus is on High Net Worth (HNW) individuals, specifically those boasting a net valuation exceeding €2M. Liquid assets or readily available cash remains a pivotal factor in discussions.

HOW IT WORKS

Example
Purchase price: €1,000,000
Loan amount: €1,000,000 (100% LTV)
Interest rate: 4.50%
Loan duration: 20 years
Loan type: Principal + Interest

Investment amount: €500,000 (50% of loan amount)
Investment return: 4.50% Compounded 

Mechanics
The 100% LTV mortgage
€1,000,000 @ 4.50% for 20 years
= Total mortgage interest PAID = €518,359

The interest-earning investment for 50% of loan amount
€500,000 investment @ 4.50% “Compounded” for 20 years 
= Investment value end of Year 20 = €1,205,000 - €500,000 principal
= Total interest EARNED = €705,000

€705,000 EARNED - €518,359 PAID
= Net POSITIVE cash flow = €186,641

That is to say, the bank will give you a positive carry-trade for using their mortgage, and not only is the mortgage FREE, you MAKE money!

THE PURCHASE PROCESS

Navigating property acquisition in France is smoother with the guidance of a property buyer's agent familiar with the region and the nuances of French property transactions. Once you've found your dream home, the steps are as follows:

  • Proposal Submission: You'll submit a written proposal. This will be forwarded to the property owner for a response. If the proposal gains approval, both parties – the buyer and the seller – will endorse the 'Compromis de Vente.' This preliminary agreement outlines the property specifics and the sale terms. As the transaction progresses, especially during conveyancing, certain terms in this contract might undergo modifications.
  • Reflection Window: Following this, there's a 10-day cooling-off window. During this phase, should you reconsider the purchase, you can withdraw without repercussions. Specifically, the 5-10% earnest money you've placed as a deposit is fully refundable.
  • Financing Initiatives: At this juncture, the financial groundwork commences (details above).
  • Conveyancing Phase: Post cooling-off window, the conveyancing phase kicks off. This process, extending up to three months, involves a series of property evaluations, all supervised by the notaire.
  • Finalization: After a thorough review and addressing any reservations, the concluding payment is made to the notaire. Subsequently, both parties validate the 'Act de Vente,' essentially the property's title deed.

In conclusion, owning a home in the South of France is now achievable for non-residents with our new GMG Luxury France Mortgages! I hope I get an invite to visit you one day! 

Global Mortgage Group offers innovative financing solutions to meet the diverse needs of our global clientele, including Overseas Expats, Foreign Nationals, Family Offices, Investment Funds, High-Net-Worth Clients, and Private Banks. Contact us at [email protected] to start your Riviera investment journey today!

If you have any questions, please feel free to contact me directly at [email protected] or my personal mobile +65 9773-0273

www.gmg.asia

Global Mortgage Group Successfully Funds $38.5 Million Singapore Asset-Based Bridging Loan for Good Class Bungalow

International Mortgage Lenders

Global Mortgage Group (GMG), a leading international mortgage originator, is proud to announce the successful funding of a $38.5 million asset-based bridging loan for a luxury Good Class Bungalow (GCB) property in Singapore. The loan enabled the owner to complete the acquisition of another company by leveraging on this prime real estate. 

With a strong commitment to empowering Singapore real estate investors and homeowners with bespoke financial solutions, GMG specialises in catering to the unique needs of high-net-worth (HNW) individuals and foreigners seeking to access liquidity without the need for a deep dive into personal and company financials. GMG offers these customised liquidity solutions worldwide, including U.S.A., Australia, U.K., Canada, Thailand, Philippines, Hong Kong, and Dubai. 

Located in one of Singapore's most sought-after neighbourhoods, the GCB offers unrivalled luxury and privacy, making it a prime investment in Singapore's thriving property market. The loan was structured to meet the client's funding needs and exit timeline at a 72% LTV (loan-to-value) with an 18-month interest servicing-only tenor. This closing marks GMG's successful funding in excess of over $350 million in bridging loans in Singapore this year alone. 

"We are thrilled to have facilitated this substantial asset-backed bridge loan for our client. Our team of experienced financial analysts structured a tailored solution that met the client's specific requirements, enabling them to capitalise on this unique investment opportunity to expand their business. From the initial discussion to funding, the process took only 12 days." said Madel Tan, Singapore Head for Global Mortgage Group. "We have seen an upward trend in market demand for bridging loans that offer flexibility and liquidity to our HNW clients."

GMG's expertise in providing efficient asset-based bridge loans for high-value properties allows their clients access to an extensive network of lenders with bespoke programs. Their commitment to excellence extends to simplifying what is often a complex real estate transaction. 

About Global Mortgage Group:

Global Mortgage Group is a leading international mortgage originator that specialises in offering customised financial solutions for high-net-worth individuals and foreign investors. With a track record of successfully funding significant real estate transactions in Singapore and globally, Global Mortgage Group provides flexible and personalised mortgage options to meet the diverse needs of its clients worldwide.

For more information, please visit  www.gmg.asia  or get in touch with Madel Tan, Director and Head of Singapore at, +65 9634 5623 or [email protected].