Frequently Asked Questions
Below are some of the questions we are asked most frequently. If your question has not been asked, please contact us. All questions are handled confidentially.
Why set up a holding company for the real estate (LLC)?
How long does it take to form the LLC and buy a house?
Can I buy houses anywhere in the USA, even though the LLC is in Texas?
Can I buy one of the listed properties right now?
Do you find tenants for the houses? What if the tenant leaves?
Why buy a house in the USA, instead of other countries?
How can I be guaranteed the title to the property is clear?
How can I be assured that the house is in good condition?
What about income taxes and capital gains in the USA?
As an Indian, do I need RBI permission to remit US Dollars overseas for buying property abroad?
Does American Full House help all foreigners buy houses in the USA and not just Indians?
? Ask your question…
- WHY DO YOU SET UP A HOLDING COMPANY FOR MY REAL ESTATE? CAN A FOREIGNER BUY REAL ESTATE IN THE USA DIRECTLY?
In order to purchase real estate in the USA, you need have a Tax ID Number (TIN). Also, you must have a registered agent in the USA with a USA address. A holding company, using American Full House as the registered address, fulfills these requirements. In addition, the company provides an additional layer of liability protection to the investor along with the ability for you to add funds at any time or even additional partners. A bank account is created in the name of your new LLC into which all rents are deposited. An LLC also makes it practical for us (with the nominal assigned interest) to execute contracts, make certain tax filings, make and receive payments on your behalf, etc., essentially handling everything for you. We cannot manage your investment without this.
- HOW LONG DOES IT TAKE TO SET UP THE HOLDING COMPANY?
There is a simple application form for the LLC and to purchase Real Estate. After you send in the payment, it normally takes 2 weeks to set up your U.S. holding company assuming there are no delays on your end in reviewing, signing and sending back the paperwork. When you purchase a “turnkey” house, this is done simultaneously so there is no lost time. You should start receiving the cash-flow in about 3 weeks, as soon as the purchase is completed. View the AFH Real Estate Purchase Agreement & LLC Application for Foreign Buyers of USA property.
- THE HOLDING COMPANY SET UP IN TEXAS… CAN I BUY PROPERTIES ANYWHERE IN THE USA?
While the holding company is registered in Texas for convenience, liability, and tax reasons, property can be purchased anywhere in the USA. Texas is a very tax friendly state with no personal state income tax and a very small corporate “franchise” tax that is currently 0% in most cases.
- I REALLY LIKE ONE OF THE PROPERTIES LISTED ON THIS WEBSITE. CAN I BUY IT NOW?Yes. We now offer “turnkey” investor properties with ROI of 10%-15%. These are houses & duplexes that have been fixed-up and rented with paying tenants already in place. Immediate cash flow and available for purchase today. A small deposit will place the property under contract. Click to view our inventory now. You can book a property from those pages.
- DO YOU FIND RENTERS FOR THE HOUSES? WHAT HAPPENS WHEN A TENANT LEAVES?
Properties are fully managed for you. Most of our turnkey houses have tenants in them already. In the USA, renters generally sign a one-year lease. When the lease comes up for renewal, we will find another tenant and get it leased for you. The rental market in the USA is very strong; it is unusual for us not to find a replacement tenant quickly. If necessary, we also handle evictions. The tenant interacts with us and our local property managers; there is nothing you will need to do on this end. If a property is briefly vacant for any reason, you will not pay management fees as they are paid only on actual rents received.
- WHY SHOULD AN INDIAN INVEST IN THE USA. WHY NOT DUBAI, AUSTRALIA, OR THE UK?
A survey released in June 2012 showed that the six-year slide in U.S. housing prices, coupled with the rising value of some foreign currencies and continued instability in Europe, is fueling a property-buying binge in the U.S. by wealthy foreigners… Some foreigners buyers view U.S. real estate as a safe place to park cash amid fears of a property bubble or political instability at home. Others are buying as a hedge against inflation because real assets like property tend to hold their value better than other investments during periods of high inflation. At a time when most securities have low yields, some investors believe they can earn higher returns by buying U.S. real estate and holding it as a rental investment or reselling in a few years at a profit. The U.S. is very welcoming to foreign investors. Our political and legal system is probably the most transparent and efficient in the world. Real estate laws in the USA protect owners in terms of ownership and rental evictions for non-payments. It is a country favored by Indians and other foreigners to for business, vacations, and trade. Property ownership in the USA is absolute, unlike countries like the UK being leasehold with the land belonging to the government. Even the government of India supports overseas investments now allowing citizens to invest up to $200,000 annually without RBI permission. With limited affordable real estate in India and laws that can be nebulous, the steep drop in prices with rising rent makes American property very attractive.
- HOW CAN I BE SURE THERE ARE NO OUTSTANDING MORTGAGE ISSUES, TAX ISSUES, OR OTHER LEINS ON MY HOUSE?
Unless there is a specific reason not to, all property is purchased with “Title Insurance.” Title insurance in the United States is indemnity insurance against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens. It is meant to protect an owner’s or a lender’s financial interest in real property against loss due to title defects, liens or other matters. It will defend against a lawsuit attacking the title or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy which is typically the purchase price. The company underwriting the policy does all the necessary searches of all real estate records before it will insure the property being purchased.
- HOW CAN I BE ASSURED THAT THE HOUSE I BUY IS IN GOOD CONDITION?
Even though our turnkey sellers offer good workmanship warranties, unless there is a specific reason not to, all property is independently inspected by a certified or licensed professional real estate inspector and is part of the estimated closing costs you will see. You will receive a detail inspection report (see sample report) complete with pictures, etc. It covers items like the roof, plumbing, electrical, cabinets, paint, flooring, etc. We use this report to negotiate any major items that need to be fixed with the seller on your behalf. These reports are often too detailed and cover many petty items that most buyers will ignore but it is very useful in uncovering any major items that could involve capital expenditure.
- WHAT ABOUT TAXES ON RENTAL INCOME & CAPITAL GAINS FOR FOREIGNERS?
There are income taxes on foreigners owning or buying property in the USA. American Full House will complete all the necessary one-time and quarterly tax filings and business reports for your LLC. These include state franchise tax, title transfer taxes, property taxes, etc. American Full House can not file annual company tax or personal returns, however, we maintain the LLC’s financial books and will refer you to certified professionals providing them with organized financial records. We will coordinate all this for you, or if you prefer, provide it to an accountant of your choice. Income tax is generally are about 10% of net income (income after all expenses); please see the IRS 2012 1040NR tax table for all the rates. Capital gains will be similarly paid depending on the net gain at the time of sale. Generally any taxes paid in the USA are adjusted/credited against taxes paid in your resident country. You should consult with a tax accountant in your country of residence to understand how taxes paid in the USA. are handled. (There is a DTAA with India whereby you will get a credit for taxes paid in the USA).
- DO I NEED TO GET RBI PERMISSION TO REMIT FUNDS FOR BUYING REAL ESTATE ABROAD?
In 2004, as a step towards further simplification and liberalization of foreign exchange facilities available to resident Indians, the Reserve Bank of India (RBI) announced the Liberalised Remittance Scheme (LRS). The latest policy (July 2014) allows Indian residents, including minors, to freely remit up to USD 125,000 per financial year (April – March). Under the Scheme, resident individuals can acquire and hold shares or debt instruments or any other assets including property outside India, without prior approval of the Reserve Bank. You can send funds from your Indian bank to the LLC account we establish for you here without any special permissions with a simple declaration (see below) and indicate it is for purchase of property. Individuals can open, maintain and hold foreign currency accounts with banks outside India for carrying out transactions permitted under the Scheme. This period resets every April 1, so you could even remit $125,000 in March and another $125,000 in April if you choose. Also, this is per individual, so a family would have a correspondingly higher limit.Declaration
I, _________________ (Name), hereby declare that the total amount of foreign exchange purchased from or remitted through, all sources in India during the financial year as per item No. V of the Application, including loan extended or gift made in rupees credited to NRO account of non-resident close relative(s), is within the limit of USD 125,000 (US Dollar one lakh twenty- five thousand only), which is the limit prescribed by the Reserve Bank for the purpose and certify that the source of funds for making the said remittance belongs to me and will not be used for prohibited purposes.
Signature of the applicant
Further information can be found on this FAQ link provided by the RBI.
- THIS WEBSITE TALKS A LOT ABOUT INDIA. DO YOU WORK WITH OTHER FOREIGNERS?
Yes. While we formed the company to help Indians invest in the U.S., we are pleased to work with any international investor to buy property in the USA; the structure and process is exactly the same.
- I (OR MY MONEY) IS NOT IN INDIA. IS THAT OK?
That is not a problem at all. While our goal is to assist Indians, we are pleased to help anyone invest from anywhere in the world and it will be handled confidentially. If your money is offshore, will need to put the entity down as a partner in the LLC. This partner can be any person, a family trust, another company set up overseas, etc. Whoever is in charge of that entity will be the person (your nominee) who signs off on the documents and approves purchases and expenses. We are required to report earnings and file/pay taxes to the U.S. government. Please contact us with any further questions on this matter.
- I HAVE A GROUP OF FRIENDS AND WE ALL WISH TO INVEST TOGETHER. HOW WOULD THAT WORK?
There can be multiple partners in your holding company. Generally each “member” will be assigned a percentage ownership of the company according to the percentage of funds contributed. Your group will pick one member as the contact point for us, through whom we will obtain the necessary approvals as we transact business on your behalf. This will all be specified in the Operating Agreement which is a part of the paperwork and which every member will approve prior to getting started.
- I WOULD LIKE TO START OUT SMALL AND INVEST MORE ONCE I SEE SUCCESS. IS THAT OK?
American Full House is pleased to proceed on this basis. You will gain confidence after you buy one and see the rents coming in. We will earn your trust and create a long-term partnership.
- I AM A HIGH NET-WORTH INVESTOR. CAN AMERICAN FULL HOUSE INVEST FOR ME?
American Full House handles HNI investors a bit differently. In these cases, depending on the investment size, we can often negotiate directly with banks to buy REO (Bank Owned) properties in bulk. We may also suggest alternative investments in the commercial space such as apartment complexes or shopping centers. American Full House has relationships that reach in to nine national financial institutions for commercial properties nationwide. We also have ties in to some smaller institutions based in Texas. Currently, we are equipped to handle up to US$5 million for an investor. We will not commit to larger sums until we have the appropriate resources to ensure your success at higher levels.
- HOW CAN A FOREIGNER BUY A HOUSE OR PROPERTY IN THE USA? Can an Indian buy real estate in the USA?
Yes, an Indian or any foreigner can buy real estate in the USA. The US welcomes foreign investments. We set up a holding company (LLC) so you can legally and easily own any type of real estate in the USA, and have it fully managed for you. When you invest in USA real estate, you will need a US Tax ID number. We handle this and all the requirements and keep you in compliance with all the legal and accounting aspects. Certain types of investments require a US mailing address and phone number (a registered agent in the USA), which American Full House provides for you. Please see the investment structure (how to buy) page on this website for full details.
Please fill out the contact form below and we will get in touch with you promptly. Investing in the USA may seem difficult from where you are, but it’s not! Contact us for friendly help.
We welcome your calls or message, and make it easy to contact us:
- +1-512-828-7150 [ Office ]
- +1-512-947-9909 [ Mobile | SMS | iMessage| FaceTime | WhatsApp | Viber ]
- Skype by Appointment
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