When selling to international buyers, the transaction often happens with a cash payment, since the buyer has money available personally or because he has secured a loan in his own country: it is increasingly difficult to get US banks to lend to US citizens, much less to foreigners.

But there are three factors that play an important role when the buyer transfers his money to the title company from his European account.

1. When he goes to his European bank to order the transfer, the buyer has to specify the exact amount of US dollars that he wants to transfer and give immediate authorization to his bank to perform the conversion between euro or pounds and dollars at the rate available at the moment.

   If he forgets to give his consent, the European bank will transfer the corresponding amount in euro or pounds to the intermediary US bank, the one that acts as a middle agent between the European bank and the final US bank holding the escrow account. There are always at least three banks involved.

   The intermediary bank will hold the money waiting for the authorization for the converting it to dollars at a defined exchange rate. The authorization will never arrive because your buyer will know nothing about it and the money will remain floating for one or two months in the international bank system and the it will return to the original European account. And the closing will be impossible.

2. The European bank wants to be paid an hefty fees for the transfer and the currency exchange, so your buyer has to have the money to cover also that (make sure he checks his bank fees ahead of time).

3. For some strange reason the intermediary bank always collects an additional fee of approx $35 or $50 therefore the buyer should transfer just that much more money.

These simple concepts will allow you to avoid pitfalls and get to your closing smoothly and successfully.

Roberto Mazzoni

]]> http://landwriting.com/international-real-estate/three-important-things-when-selling-to-international-buyers/feed/ 0 http://landwriting.com/international-real-estate/new-lending-bill-threatens-to-change-investing-rules/ http://landwriting.com/international-real-estate/new-lending-bill-threatens-to-change-investing-rules/#comments Tue, 09 Jun 2009 11:35:29 +0000 Roberto Mazzoni http://www.landwriting.com/blog/?p=457 After a major financial or social disaster you can always count on somebody to comer along and advocate for some new drastic measure that unbalances everything. This is the case with a bill that has been approved by the House of Representatives and that is currently at the Senate. The name of the bill is HR 1728 “Mortgage Reform and Anti-Predatory Lending Act”. It amends the “Truth in lending Act” by specifying more restrictive rules for the originators of residential mortgages.

This bill is creating ripples of alarming comments in all real estate investor associations throughout the nation, particularly because, amongst many things, it limits the ability of an individual owner to owner finance one property only once every 3 years.

There are people who are already talking of possible ways to work around the obstacle and others who are advocating urgent lobby actions with senators so to remove of change the few sentences that effect private owner financing.

These are the types of transaction you would be restricted from doing: sell your own home with a land contract or with a mortgage held by you, doing any kind of installment sale of any kind of residential property. To do more than 1 owner financed deal every 3 years you would have to follow the complex requirements set forth in the proposed law, and maybe get additional licenses.

With this piece of legislation the US gets closer to Europe where NOBODY is allowed to owner finance ANY type of property. Only banks are entitled to issue loans and private individuals can only accept cash payment for their properties. If the bill passes the Senate, the US real estate market is going to change. Many creative exit strategies for sellers and investors will go out of the door and some markets will probably reduce.

In Europe today the real estate market is very slow because it is becoming more and more difficult to sell properties since the banks have tightened their already strict lending policies. The bill seems conceived to protect the weakest buyers and tenants, those who got themselves into dire straights because of poor money management and careless house purchases. You might watch out to the consequences it will have on the free open market.

Roberto Mazzoni

P.S. My friend Sam Bell made a much more extensive exam of the bill and the possible counter actions on his site http://sambell3rd.com/realestatementor/real_estate_financing/90/us-senate-seizing-control-of-real-estate-investing/

The new big thing about bank owned properties is buying from a list of heavily discounted houses. They call it portfolio buying and it is the new wave of wholesaling on a big scale. As the name implies, you need to buy several houses at a time in order to enter the world of “portfolios”. Sometimes you can share the buying with other investors so that you don’t need to buy the whole list yourself, but be prepared to pay much more because there will be an intermediary or more than one between you and the bank in order to make it possible for a package to be split.

It can be very advantageous to buy from lists because you can get bigger discounts that you would get dealing with the bank through a Realtor on a listed property. The problem here is that these list get pushed around so much that you sometimes get to prices that are even higher than the listed properties.

I was talking with a big old time wholesaler here in Florida and he told me a very funny story: somebody had got to him with a very “hot” list of bank owned properties. He checked them up and found out that each of them was actually listed on the MLS for an asking price that was lower than what was asked on the list.

Additionally most of these list often contain properties that are in horrible shape and can’t be salvaged. They call them lemons. So the real gold can be found by combining lists you might get from some wholesaler and standard research on listed REO (Real Estate Owned).

Roberto Mazzoni

P.S.

I have mentioned it already, but I have used for 2 months a very new search engine that looks for bank owned properties nation wide. It’s very fast and is being adopted by several real estate gurus, you should check it out, it can save you time in the research. Here is my affiliate link http://www.reogoldminer.com

Here you can see the interview I did for my investors in Italy with Rick Dove who has been the winning investor in the team and who tells us his experience just after having disembarked from the ship. He comments on how much concerned and involved Mark and Sam have been involved with their students, showing not only competence but also personal interest and care for the student’s success.

Dove is looking for partners in the Atlanta area where he sees very hot opportunities right now.

Roberto Mazzoni

P.S. In the next few days we will meet all the students that were on board of the ship who will tell us their experience and what they got from it.

I have finally had proof that not only the concept I have been working on personally can be expanded greatly, but also that it has a far wider potential than I had myself anticipated. Old Europe is looking for new ways to invest and is definitely quite interested in the US which, by the way, has opened itself a great deal to foreign support in all directions: the case of Fiat and Chrysler is just an example of it.

Italy is my own country and one of the fastest in Europe to catch on new trends, so I have been blessed twice by the circumstance of being able to connect the two best suited nations in this very moment and by being supported by some of the best people: Mark Jackson and Sam Bell.

Look at the video where Sam Bell 3rd, My wife Maria Mazzoni, myself and Mark Jackson introduce our project to investors in Montecarlo. It is both in Italian and in English because of the mixed audience.

The key concept I got from all these meetings with all the different investors is that professionalism pays. People trust those who are able to substantiate their offers with real data about the market and the properties and who are also able to explain in simple terms the different mechanisms and documents that go into the action of purchasing from a distance.

Every meeting I had lasted at least 3 hours, during which I was literally pounded with questions on how it would all works and how they could profit from it. Many technical as well as practical questions: all indicating a very, very high level of interest.

I have been blessed in this project by having teamed up with two of the finest investors in the US. The first one is Mark Jackson (alias MJ in my PJs) who is by far the greatest expert in property evaluation (see www.knowyourarv.com) and who has been able to transfer me in no time all the know how I needed to be like a “seasoned” evaluator. The second is Sam Bell III (http://sambell3rd.com) who is the top expert on how to use Web 2.0 strategies for buying and selling real estate in the US.

They both came with me in Montecarlo and Mark held together with me a long presentation to major investors in the Principato di Monaco that jump started my tour in Italy. Listen to a snippet of it live in this post.

Roberto Mazzoni

P.S. I will be briefing you more in detail as I roll out this project. If you want to keep up with it just subscribe to this blog updates.

As I found out somebody who cares to achieve my very objective: create a bridge between cultures and bring together people who have very different habits, languages and personal situations, but who can have a very clear advantage, also economic advantage, for teaming up together across the ocean.

Mark and Lynn are right now headed to Italy where we will meet together a group of major investors who are looking to do business in the US, and I thank Mark for having taken the challenge and for having even volunteered to learn Italian! Can you imagine it

I am a firm believer that if we are going to make it all we need to cooperate amongst each other. America needs the help of Europe and Europe still needs the help of America.

Lynn recounts in this short interview which I have also translated for Italian viewers, how she and her husband have made it a lifestyle to make business everywhere they go and take joy out of it.

I think this message is very important, more important than you might think. America needs to open up and Lynn and Mark Jackson are already showing how to do it.

P.S. I made this interview on the fly at the Miami airport, catching Lynn and Mark while on their way back from a cruise to Nassau during which they had trained their key students on how to look for properties from a ship! You can hear Mark’s voice while he shooting the video

Evaluating these data is the toughest challenge for any investor and the recent wave of foreclosed investors is a clear demonstration of the difficulty of predicting both the market and the real After Repair Value of a home. The ARV being the real current selling price that a property can have after you have done all the reparis that are needed in order to make in marketable. The very choice of what repairs to make and the materials to be used can make the difference between making money and losing money on a deal.

Look at how ICO works in real life

This factor becomes even more important when you consider that at this date the majority of actual deals out there come from bank repossessed properties. Here you can find astounding low prices but you know for sure that the house will need some kind of repair before it can be resold or rented. The key difficulty that I find in all my fellow investors overseas is: “How do I know this is really a good deal? How can I find the actual current value of what I am buying considering that prices keep going down in certain markets”.

The usual approach of looking for similar sales in the area or to ask to a local Realtor is no more adequate for two reasons: properties keep coming on the market daily and the best deals get snatched up pretty quickly, the market is so much influenced by foreclosures and bank owned properties that values change continually.

Recognizing this need I have looked for a system that would compute the actual value, reducing the research work so that you can look at more properties per day and capture all the best deals you can. It had to be a system one could use from the comfort of his or her home, no matter how remote from the actual market, because it has to serve international real estate investors who live in Europe or also elsewhere. I found that the best solution for me is www.investorcompsonline.com, the automatic evaluation site created by Mark Jackson. So I have captured Mark’s attention to get him involved in a project that will bring his system to European investors as of the second half of March 2009. It is going to make a huge difference in the amount of investing that will be done from overseas also because it provides personal consultancy on the evaluation, that is you can ask Mark’ staff to double check values for you and also because ICO provides lots of training content to get everybody up to speed.

I have started to learn the system myself in these days and I am putting it to test before releasing it to all other investors across the pond. Some materials will have to be translated so to make it even more usable, but it is a resource that you will also be able to tap into if you need to confirm an appraisal for an investor who is wishing to buy from you.

Here you find the original interview with Mark Jackson (from now on Marco Giacsoni) that spurred all this just one week ago. I have already posted it on my blog but I post it again because I truly believe this is going to be a major, major step into opening the US real estate market to a whole new wave of buyers, and cash buyers for that matter. We’ll be going live with our series of webinars in Italy as of March 12, if you have any specific deal or property you want to pitch let me know.

Look at a short demonstration of Investor Comps Online I have just made.

Brief demonstration of property evaluation with ICO

For an interview with Mark Jackson about the project, go to my previous post:

Mark Jackson the king of evaluation goes international!

Roberto Mazzoni