993 REDDOCH COVE, MEMPHIS, TN 38119
PHONE 1-888-INVEST3
FAX 866-334-6675
EMAIL
[email protected] FREQUENTLY ASKED QUESTIONS Q: What does your company do? A: We offer highly discounted properties to investors globally. Our specialty is offering our unique, fully turnkey system to investors from long distance locations. Very few of our investors actually live in the State of Tennessee. We offer property management, tenant placement, maintenance, rnet collection, accounting statements, and other services necessary for long distance investors to capitalize on the Memphis discounted home pricing market without having to live here. Q: What type of returns can I expect? A: Net returns after al expenses would start at around 9% and go up to as high as 20% on multi units. Gross returns are between 20 and 40% Q: What is the typical price point that clients purchase properties from your company? A: Our average sales price is between $35,000 and $60,000 US Dollars. We typically offer properties, fully renovated, at 50% – 70% of current Fair Market Value. You will find in almost any city that you can buy foreclosed homes for as little as $5000 but they are usually in areas we would refuse to manage and may have a raft of back taxes and damage. We will only offer properties we believe are tenantable, good location and have maximum likelihood of capital appreciation. Q: What are the rent prices of the homes you offer in Memphis? A: Traditionally, the ‘sweet spot’ of truly cash flowing homes is between $500 and $1000 dollars per month, although depending on your investment, this may be higher or lower. However, the most important thing is PURCHASING THE PROPERTY CORRECTLY. If you do this, market rent will cash flow and insure that your investment is performing. Q: Can a foreigner individual purchase a US property? A: YES, without any problems. Q: Does US law require a real person to purchase a property? A: Not necessarily. There are several ways to purchase property and determining the ‘best’ structure depends on your personal circumstances and goals. However typically for NZ residents we would use a trust with a corporate trustee and that trustee would own the shares and be the director of a US LLC to maximize the legal and tax advantages, We will help arrange your LLC as there are some critical steps to take to avoid non resident withholding tax etc. Q: Do I get the title to the property? A: Once the property has settled you will receive a clear title. In fact in the USA you even pay a one off title insurance fee to guarantee you clear title even if there is a land claim or some other left field event. This is rare but is a normal part of US property transactions.
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993 REDDOCH COVE, MEMPHIS, TN 38119
PHONE 1-888-INVEST3
FAX 866-334-6675
EMAIL
[email protected] FREQUENTLY ASKED QUESTIONS Q: Would the I have to file a US tax return? A: YES, by owning a real estate interest that generates income, you are considered to be doing business in the US for income tax purposes, and thus be required to file a tax return. You can do this yourself online at minimal cost. We will assist with this. Q: Do I have to pay tax in the US and New Zealand on rental income received? A: No, providing you are set up correctly you will not pay tax in NZ. (We will assist with this) Q: What deductions can I claim on the rental property? A: Tax deductions on your rental property can include; • Rates • Loan Interest • Insurance • Real Estate Agent Fees (if applicable) • Depreciation • Deductions for capital works • Professional Service Fee Q: What if my tax deductions on the property are greater than my rental income? A: You will accumulate the losses in the USA until LLC becomes profitable. Q: Once I purchase can I claim a trip to America in my New Zealand tax return? A: Subject to certain rules and requirements, yes you can. Q: If I am borrowing money to help finance my property purchase in America, can I claim that against my tax here? A: YES, any interest payable on money borrowed in New Zealand and/or the US will be tax deductable. Q: Who will manage my property? A: As property management is the key to success with international investing we strongly recommend you allow Memphis Investment Properties to manage the properties for you. NOTE: We receive no commissions for property management at all from MIP, we simply believe them to be excellent at what they do and the best people to look after your investment property. After all, they picked the property and the area with good management in mind.
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993 REDDOCH COVE, MEMPHIS, TN 38119
PHONE 1-888-INVEST3
FAX 866-334-6675
EMAIL
[email protected] FREQUENTLY ASKED QUESTIONS Q: What about banking and collecting my rent? A: All rental monies will be collected by the Property Manager and deposited into your nominated US bank account. We can assist with the set-up of a US bank account and give you access to a Visa Debit Card and Internet banking if you require. Q: Who will do repairs if needed? A: MIP will ensure the property is maintained in conjunction with you of course. Q: How long does it take to get a renter in my home? A: We always try to have the property tenanted at settlement for you but we would allow as standard up to 45 days maximum to tenant the property. Currently over 90% of all new purchasers are tenanted on settlement day. Q: How many homes does your company currently manage? A: We manage around 1000 homes. Q: How long have you been in business? A: We have over 30+ years in real estate experience from construction to management as well as sales. Jim Reedy asprincipal has been doing this all his life and his sons are now learning the ropes so there is at least 1 more full generation of family ownership coming. Q: Why are so many people renting in Memphis? A: The population of Memphis has always had a high proportion of renters. This is actually VERY beneficial for the investor of real estate in Memphis, because most homes which become vacant can have a new tenant placed within the home and paying rent within 30 days or less. Q: How can I get more information on how to purchase your wholesale properties? Is there a waiting list? A: At this time, no. However, we have had bottlenecks in the past and expect, as Memphis continues to get such positive press (Memphis was ranked the #1 city for positive price performance in2010) that we will see shortages of housing stock again. The best time to make investments in Memphis is NOW. Please contact us using the information below. However if you have been referred to us via Global Presenting and/or Dean Letfus then please contact him initially as Dean’s clients are able to secure private funding at lower interest rates than our direct clients. Dean Letfus
[email protected] Tel +649 535 5296
Memphis Investment Properties 993 Reddoch Cove Memphis, TN 38119 901-683-4446
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Phone: 1-888 INVEST 3 Email:
[email protected] Fax: 866-334-6675
993 REDDOCH COVE, MEMPHIS, TN 38119
PHONE 1-888-INVEST3
FAX 866-334-6675
EMAIL
[email protected] FUNDING OPTIONS Borrowing money in the USA as a non resident can be a challenge so we are delighted to be able to advise that we have “non recourse” private lending available on all Memphis properties. This means you pay 50% deposit and the balance is funded for 5 or 7 years. Non recourse means you do not have to provide any additional security or guarantees. The loan is secureed solely against the property. On principal and interest the property still remains cash positive whilst the loan is being paid off. Interest rates may vary but currently clients of Dean Letfus receive a discounted rate of 9.75%. Generally once you have had your US LLC operating for 2 years or more and have proof of rental income it should be possible to secure lending form main stream banks in the USA at signifcantly lower rates. Often this is almost impossible, however the way we set up your investing busines in the USA provides these benefits to you over time. If you do not need to repatriate any surplus cashflow in the medium term this money can be applied to your loan in the USA and you could have your property paid off in as littel as 3 years. This then gives you the ability to purchase your next property with none of your own money and build a debt free portfolio in a fraction of the time you could in New Zealand, (or just about anywhere else for that matter). NOTE: As a client of Dean Letfus you are pre approved for private finance on all Memphis Investment Properties at a discounted interest rate. There is no application fee or approval process required.
Dean Letfus
[email protected] Tel +649 535 5296
Memphis Investment Properties 993 Reddoch Cove Memphis, TN 38119 901-683-4446
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Phone: 1-888 INVEST 3 Email:
[email protected] Fax: 866-334-6675