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There’s something almost mythical about buying real estate in the United States. 

The dream of owning American real estate spans across the globe. Since its foundation, people from around the world have sought after a piece of land in America. From settlers moving to California to take part in the gold rush to new waves of immigrants searching for a better life, U.S. real estate has symbolized hope and prosperity. And you’re probably reading this because you dream of building wealth through real estate investing. 

The path to property ownership is not the same for a U.S. citizen and a foreign national, though. Even so, much of the information out there is geared toward Americans investing in U.S. real estate. This article is intended as a guide for non-U.S. citizens.

By understanding how to navigate the process and overcome some of the most common obstacles you might encounter, you’ll be well on your way to achieving your “American dream.”

Why Invest in U.S. Real Estate in the First Place?

Before taking another step, it’s crucial to understand why you want to invest in real estate in the United States. There are houses in your home country and investment opportunities around the world, yet many people still opt to invest in American real estate. These are some of the most common reasons:

Political and economic stability

There are significant risks that political policies could drastically impact the economy each time a government changes. Given America’s stability compared to other countries, it’s no wonder the U.S. market is perceived as a safe haven for investment.

Historical performance

While there have been drops in U.S. home values during different periods of history (the Great Depression and the 2008 housing bubble), these have been more of an exception than a rule. For the most part, American real estate has climbed steadily over the past several decades. This consistent growth over extended periods of time has led to significant gains for property owners. 

Stable currency

The U.S. dollar constantly ranks among the strongest currencies in the world. Compared to places where inflation is high and currency values change rapidly, the American dollar is very stable. A currency that holds its value, combined with a real asset (real estate) that has historically grown in value, is a strong hedge against inflation. 

With these benefits in mind, you might be wondering, “Are the challenges worth the benefits?” If so, keep reading.

Obstacle 1: Lack of Market-Specific Knowledge

Imagine going to a restaurant with hundreds of items on the menu. Some are delicious, some are bad, and others are mediocre. How do you know which menu items to select? That’s the dilemma you’re probably facing as you explore American investment property options.

There are 50 states in the U.S., and each has its own laws, climate types, and housing needs. On top of that, every real estate market within a state could have totally different pricing, trends, considerations, job opportunities, and more.

Don’t worry if you don’t know where to start. Follow these steps to discover a market that meets your needs.

Start with strategy

It’s no coincidence that David Meyer’s book goes by the same title. Determining your strategy allows you to back into certain locations. Are you looking for passive income? Is real estate a way to protect your money from currency inflation in your home country?

Whatever the case may be, you’ll find that your unique situation is best suited for certain approaches compared to others. For example, not everyone has the skill set or personality to live in Australia and flip houses in Alabama—or “woop woop,” as the Aussies say.

There are entire posts written on this topic that can give you direction. Take the time to read and reflect before making this decision. 

Find markets that match your strategy

Once you find the right investment strategy, it’s time to select a market. At this point, you can work backward from the strategy you chose to select a market. This is crucial because a place that would make a great vacation rental might not necessarily be great for flipping houses or long-term rentals.

Use BiggerPockets’ Market Finder tool to explore cities across the United States based on your strategy. For example, let’s say you want to buy and hold rental properties. You can analyze rent-to-price ratios to see where you might get the best returns. 

Spend some time narrowing down your market and come up with a short list of a few cities. Then, get even more specific.

Conduct market-specific research

You want to be extremely thorough when researching the specifics of a market. Here are a few key indicators to explore as you get started:

• Job market: A strong job market drives demand for housing by increasing income levels and attracting new residents. Look into who the major employers are and see if there’s diversification. This reduces your risk because places, where one company employs a large proportion of the population, are greatly impacted if that industry does poorly or the company leaves for another market. Having various employers in a market makes your potential renter pool less tied to one industry and spreads the risk around.
• Population growth: Population growth signals rising housing demand, often leading to price appreciation and attracting businesses. Even within a city or town, there are certain areas that grow faster than others. Pro tip: Connect with local real estate agents and investors on phone calls to ask what trends they’re seeing.
• Transportation: Access to public transportation or major highways enhances a location’s desirability. In cities where the subway is a common mode of transportation, a rental property near a train station would be viewed as more attractive to buyers and renters.
• Neighborhoods: The characteristics of neighborhoods, such as safety, proximity, and amenities, significantly influence property values and investment potential. Don’t worry about jumping on a plane—use Google Maps to see an area’s main attractions like restaurants, shopping centers, or transit options. You can also use Google Earth to walk the streets virtually to give you a feel for the area.

Keep in mind that what looks good on paper doesn’t necessarily always match the reality of what’s happening. It’s always a good idea to connect with local investors to see what strategies they’re using and in what neighborhoods. 

Based on your findings, you’ll be able to confidently select a real estate market.

Obstacle 2: Finding and Managing a Remote Team

Living far away from your investments might feel overwhelming at first. Luckily, there are many others who’ve had success investing from a distance, which means you can too. There are simple strategies and great resources available to help you build a strong team and make your real estate business successful without being located in the U.S.

How to find your team members

When starting a real estate investing business, you’re the boss! To make sure your business runs smoothly without you, you must build a strong team. Whether you’re searching for a real estate agent, contractor, lender, or property manager, the process to find them is the same.

These recommendations will yield the best results:

• Build your network: Network on the BiggerPockets forums with investors operating where you want to invest. More specifically, look for people using the same strategy that you want to use. You’ll also find that most American cities have people from other countries—if there are communities of people from your home country living where you want to invest, connect with them too!
• Referrals: If you build a network, they can introduce you to people that they’ve worked with and even tell you who to stay away from.
• BiggerPockets Team Builder: Using this tool, you can plug in a variety of information, such as the team member you’re looking for (real estate agent, for example), location, and other key details. Based on your responses, you’ll receive a list of people that’s been curated for you.
• Research online reviews: Leverage platforms like Google, Yelp, or local real estate websites. You can gather feedback on their reputation, helping you assess their reliability and performance before even reaching out to them.

Tips for vetting real estate professionals

You’ve created a list of potential team members—now what?

Vetting real estate professionals effectively is essential to long-term success as a real estate investor. It’s even more important if you live in another country because you can’t just drive to your rental property whenever you feel like it. This step can help ensure that you collaborate with trustworthy, knowledgeable individuals who understand the local market. 

Here are some key tips to guide you through the vetting process:

• Check credentials: Verify licenses and certifications so you know that they are qualified and compliant with local regulations. You can often find this information on a state or city website.
• Ask for references: Request references from past clients. Take the time to follow up with them to gain insights into their experiences and the quality of service provided. Don’t skip this step—it’s worth the time.
• Conduct interviews: Schedule video calls to discuss their experience, approach, and understanding of the local market and gauge whether they’re a good fit personality-wise. If they speak your native language, that could be a huge plus! In contrast, note that it’s a major red flag if they aren’t willing to do calls.

As you complete the vetting process, always trust your instincts. Pay attention to your comfort level and gut feelings about their reliability, expertise, and overall character.

Tools to manage your team

Once your team is established, it’s time to start finding deals and setting up systems. You always want to have an open line of communication so that you’re informed about what’s going on regularly. 

These are some useful tools to find deals and manage your team from outside the U.S.:

• WhatsApp: No American cell phone plan? No problem. Just have your team members get the app—it’s just like texting.
• PropStream: PropStream provides access to property data, analytics, and marketing tools, helping you identify profitable deals and analyze potential investments.
• RentRedi: This property management platform is designed for landlords and simplifies tenant screening, lease management, and rent collection, making it easier to manage rental properties remotely.
• Airtable: Airtable combines spreadsheet and database functionalities, allowing you to create custom workflows, track deals, and manage your team’s tasks in a visually appealing format.

The list of software is endless, but these tools will help you get started and build from the ground up.

Obstacle 3: Finding Financing as a Non-U.S. Citizen

According to a recent NAR report, 50% of all international buyers paid cash for real estate in the United States, whereas about 28% of all existing buyers paid cash. 

You might interpret that to mean that foreign investors are more affluent. On the flip side, it reveals something about the U.S. mortgage industry’s inability to provide financing to non-U.S. citizens. These are common reasons foreign nationals feel stuck: 

• Limited financing options: Many lenders are hesitant to provide loans to non-U.S. citizens due to perceived risks. For those seeking primary mortgages or financing for second homes, options from government-sponsored entities like Freddie Mac and Fannie Mae are typically not available to non-residents. Investment property-specific loans are even harder to come by.
• Lack of credit: If you don’t have a credit history in the United States, it’s hard for lenders to assess your creditworthiness. Without a credit score or established financial history in the U.S., your options are more limited and likely come with higher interest rates—that is, if you find a lender to work with you.
• Income verification: Lenders want to make sure you’re not engaged in any illegal activity. As such, they’ll dig deep into your financial records to verify your income. Even if you’re not a drug dealer and have strong finances, your lender will likely ask for translations of all documentation. That’s because money coming from outside the United States is viewed as a higher risk—it can be harder for lenders to pinpoint where money is coming from abroad.
• The banking system and currency exchange: Navigating the banking system and currency exchange can be daunting. There may be additional fees, fluctuations in currency value, and limitations when transferring funds internationally from your home country to the United States.

While this may seem discouraging, know that if you’ve read this far, you’re not a quitter. Rest assured that there are ways to overcome these obstacles.

Cheat Codes to Financing American Real Estate 

It probably crossed your mind to marry an American citizen. Then, you’d have plenty of financing options!

In all seriousness, there are other ways to obtain financing as a foreign investor. Here are some potential solutions, depending on your situation:

Hard money

Hard money loans provide quick access to capital based on the after-repair value (ARV), which is ideal for flipping houses. However, these often have double-digit interest rates, and lenders will likely ask for a personal guarantee tied to you personally, even if the property is purchased under a business entity. 

Private money

Private money lending refers to raising money from individual investors rather than traditional banking institutions. If you can raise money for the full purchase price amount, it will appear as cash to the seller. Keep in mind that borrowing money from individuals also comes with strings attached, like higher interest rates.

Seller financing

With seller financing, the property seller acts as the lender, allowing you to bypass traditional financing barriers and negotiate payment terms directly, which can simplify the purchasing process. This creative solution doesn’t work in all situations, but it can be a great option if you want to spend time negotiating the structure with the seller.

Debt-service-coverage ratio (DSCR) loans

DSCR loans are evaluated on a rental property’s performance, not your personal income. It takes into consideration the amount of rental income a property can produce compared to the monthly mortgage payment. Sounds perfect for foreign investors!

These loans are made to business entities and may require credit reviews, depending on the lender. As such, there are only a handful of companies that offer DSCR loans tailored to foreign nationals. The leader in this space is Waltz, which specializes in working with non-U.S. citizens. In addition to lending, they have solutions for forming an LLC, obtaining a U.S. bank account, and currency exchange capabilities. 

All these financing options provide ways for foreign investors like you to start investing. It’s up to you to determine which one is right for you.

Move Obstacles Aside and Start Investing

Investing in U.S. real estate as a noncitizen presents unique challenges, including navigating market knowledge gaps, assembling a trustworthy team, and securing financing. Just know that U.S. real estate investing is attainable and within your grasp.

Over the last year or so, about 54,000 purchases were made by foreign investors across the United States. By following these recommended measures, you’ll be able to add to this number and inspire others to do the same.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.