A Foreign Guide to Buying in America

1. Individual Apartment or Home Purchase

• An investor can purchase an Apartment or Home for rental purposes.
• If you are purchasing in a Metropolitan City, the type of property will most likely be a Condominium Unit. This is a type of building structure that allows for investment. The price of an Apartment can be $500,000 to $10 Million (Or more). It depends on the size of the Apartment, location etc. The investor can rent this out.
• The return can be anywhere from 3% – 6% on average depending on the City and location.
• The true value might be in the appreciation if the property is purchased at a good price
• Apartments have taxes and monthly common charges or HOA fees. This is factored into the rate of return

2. Multi-Family Building Purchase

• This is the purchase of a building with multiple units. Perhaps an investor buys a building with 10 rental Apartments. The investor than hires a property manager to manage the building, fix maintenance problems and rent the Apartments when they become vacant
• The return on a building can be anywhere from 3% – 8%. This is a net return. This depends on the location of the property and City
• Apartment buildings can have taxes as high as $100,000 or $1 Million per year. There are also building and maintenance expenses.
• Typically, the better the location, the lower the return. However, this means the property might be a safer investment

3. Development Deal & Conversion Project

• This is the biggest return but most risky
• It can be building a new construction project from beginning. It can be a new Apartment building, Hotel or Other
• Returns can be 15%-30%. Net Returns
• It’s important to have the right team in place. You will need to work with a good builder and group of people that can help with your investment
• It’s important to understand if there will be tax incentives or abatements on the property.

4. Triple Net Retal or Mall

• This is another type of property typically found in the suburbs or outside of major Cities
• This is a retail or commercial store that has a long-term lease
• For example, Mcdonalds might lease a property for 15 years. It’s a good tenant and long-term
• The tenant usually pays the taxes and maintenance
• Returns are usually 5% – 8%
• These are excellent investment type properties

Steps of the Deal