Real Properties: For Foreign Buyers and Sellers

property management service

The paperwork process and key steps you must take for profitable investments
Who is Considered a Foreign Investor in the U.S.?
USA is the only country in the world that welcomes anyone to buy real properties in the US without being a resident of the US. The only requirement is that a foreign investor pays taxes related to real estate income. A foreign investor can even acquire a property remotely by following certain procedures.
For purpose of taxation on the foreign investments in the US, the Internal Revenue Service (IRS) defines a foreigner respectfully as ‘non-resident alien’ (NRA). Click here to see the definition and explanation of
“Foreign Persons”.

Why Invest in Real Properties in the U.S.?
Growth of wealth is closely associated with assets a person owns and the cash holding the assets commands. It is always challenging for capital cash holder as to where and how to invest their cash; that it either makes active ongoing regular cash, a passive promised increase in cash, or generates steady cash, while either holding or increasing its value over time. Any mode of investment has built-in risk involved. When the risk factor is high, the investor may lose cash and peace of mind. When the risk is low the investor maintains patience to keep close control on their investment.
Investing in real estate – residential or commercial – has always attracted foreign investors who expect fair returns and holding value of properties. Such expectations of investors are a fusion of art, science and market forces that prevail.

The popularity of Foreign Investments in Florida
According to the National Association of Realtors, for the period of April 2021 through March 2022, highlights of the international buyers of residential real estate are as follows:

  • Foreign buyers purchased $59 billion worth of U.S. existing homes, an 8.5% increase over the previous 12 months. Florida led the nation with 24% buyers, followed by California 11%, Texas 8%, Arizona 7%, New York 4%, and North Carolina 4%.
  • Amongst international buyers, the average value of the property was $598k, and the median value as $366k.
  •  China and Canada remained first and second in U.S. residential sales dollar volume at $6.1 billion and $5.5 billion respectively, followed by India $3.6 billion, Mexico 2.9 billon, and Brazil $1.6 billion.
  • 44% of foreign buyers purchased their property for use as a vacation home, rental property, or both.
  • 64% purchased detached single-family homes and town homes

The popular destinations for foreign buyers in Florida have been Miami and Orlando metropolitan areas. Orlando is the premier destination for tourists. Orlando hosts 70 million visitors every year. If you belong to a very cold country, we urge you to visit Orlando during winter months (November to March) to experience what it is like here. We are here to help you turn your dream goals into reality and acquire income-producing properties.

How to Get Started

  • Having decided where to invest in real properties in the U.S., you can get started with important paperwork to establish your identity in the U.S.
  • It is best to engage a Certified Professional Accountant (CPA) to help you in filing your paperwork. There are certified CPAs available in your country to help you with the filing of the appropriate paperwork to establish your U.S. identity to do business. At the minimum, you would need to take care of the following paperwork:
  • ITIN: (Individual Tax Identification Number). This may be treated equivalent to a Social Security, the unique number for U.S. citizens and Resident Aliens (green card holders).
  • To pay taxes to the Internal Revenue Service (IRS), you as a foreign person must have an individual tax identity as ITIN. You must file an application on IRS Form W-7.
  • Browse over instructions on how and where to fill and file this important form.
  • It is important that you find out the reference of the tax treaty between the US and your home country to get the advantage of the reduction of withholding of taxes.

Scope of Investment:
The IRS has two categories for taxes on your foreign income, which relate to the scope and extent of your investment interests of business activity identifiable as follows:

  • FDAP: (Fixed or Determinable, Annual or Periodical income from U.S. source). This is the case when you are a passive investor in real estate for properties generating rental income.
  • You pay a flat 30% withholding tax through your designated Withholding Agent, or lower rate if there is a treaty between the US and your home country.
  • After obtaining your ITIN, you also must file an application on IRS Form W-8BEN. You must provide a copy of this approved application from the IRS to the ‘Withholding Agent’ (mentioned below) and your accountant for tax and disbursement purposes.
  • If the US and your home country have a tax treaty, there may be a substantial reduction of withholding tax. Browse over instructions for this Form W-8BEN. Note that you are making this application in capacity as an ‘individual’.
  • You file annual tax return on IRS Form 1042-S: Foreign Person’s U.S. Source Income Subject to Withholding. Browse over Instructions for Form 1042-S.
  • ECI: (Effectively Connected Income) When you are actively engaged in trade or business of real properties through the management structure you have setup in the U.S. to run affairs of your
    business and you oversee its operations, you have tax status of Effectively Connected Income. In this case, you pay taxes on your ‘effectively connected income’ (ECI) to the IRS (Internal Revenue Service) as if you are a U.S. citizen.
  • After obtaining ITIN, you also should file an application on IRS Form W- 8ECI for setting up your business. Give a copy of the approved application from IRS to ‘Withholding Agent’ (mentioned below) for tax withholding and disbursement purposes.
  • If the US and your home country have a tax treaty, there is reduction of withholding tax. Browse over instruction for this Form W-8ECI. Note that you submit papers regarding your country of
    incorporation or organization if you are not applying as an individual. Your accountant will prepare your annual tax return on IRS Form 1040NR: U.S. Nonresident Alien Income Tax Return, and IRS Form 1120-F U.S. Tax Return for Foreign Corporation. Browse Instructions for Form 1040NR, and Instruction for Form 1120-F. There is no withholding tax here.
  • You may have both FDAP and ECI income. In this case, you must file both IRS Form W-8BEN and IRS Form W-8ECI. You must file an annual tax return, preferably through your accountant, to pay taxes and claim refunds as if you are a US citizen. U.S. tax laws are complex, so leave it to your tax professional to do it for you.

Structure of Ownership
Even if you are a solo investor, it is important to cover yourself under the protection of a foreign legal entity or entities that create layers of ownership privacy and tax matters having perpetuity of legal life and management of business. It is best to consult a local tax counsel and a tax adviser to design a legal ownership and tax structure to protect you and your business and assets. Do not cut corners here! Written professional advice is indispensable.

Withholding Agent
Definition, duties and responsibilities are set out in Chapter 3 and Chapter 4 of the IRS Publication 515: Withholding of Tax on Nonresident Alien and Foreign Entities. This is either an entity or person, US or foreign designated, entrusted, and declared to the U.S. Internal Revenue Service who will control
receipts and disbursements on your behalf. The IRS treats a ‘Withholding Agent’ personally liable for any taxes required to be withheld and disbursed, including accuracy of statements on your behalf. It is extremely important that you designate your Withholding Agent and declare it to the IRS in your application to the IRS. The Withholding Agent is your representative holding your money and disbursing to the right owners. The Withholding Agent acts on your behalf for the life of the property until you sell
or transfer the property in its final disposition.
In as much as you need structure of ownership in the U.S., which is in perpetuity, you also need your Withholding Agent that has life in legal perpetuity besides its reputation and services to you acting on
your behalf.

Availability of Loans
It is a good idea to place your money in the bank having its branch in your country, and get a loan from that bank. Loans are available on self-occupied vacation and investment properties based on your financial strength and creditworthiness. Typically, you may be able to get about sixty percent loans on
value of the property. If the same bank can provide a ‘Withholding Agent’, so much the better.

Property Management:
It is always advisable to engage the services of a licensed professional property management firm to take care of your property. Their duties will include dealing with potential tenants, renting out your property, attending to complaints from tenants, getting legal help when required, and arranging to have rents transmitted to your account and tax withholdings to your Withholding Agent. A property manager is your representative to the tenant of your property, and a firm should be carefully selected.

Start of Business
When you get an approved application(s) from the IRS on Form W-8ECI or Form W-8BEN, give copies to your accountant, your withholding agent, your property management company, and your real estate
professional. These papers are your business identity to do business in the U.S. The above parties comprise YOUR team and will help you in accomplishing your investment goals.
They will be instrumental in preparing your business model for acquisition of properties, finding investment properties and explaining rental income potential.

When you, the foreign owner of real property decides to dispose of your property, called disposition, you are liable to pay taxes to the IRS. The IRS controls collection of taxes for disposition of the U.S. property by Foreign Investment in Real Property Tax Act (FIRTPA) by withholding 15% of the amount realized on disposition of the property through Title/Settlement companies at the transaction closing. The Title/Settlement Company will transmit this withheld tax amount to the designated Withholding Agent who will sign off on Form 8288 and file this form along with withheld tax money transmitted to the IRS. Click here for instruction on filing Form 8288. The IRS will date stamp receipt of the signed Form 8288 by the Withholding Agent and acknowledge receipt of advance tax deposit to you. Your accountant will need a copy of this receipt when preparing your annual tax return.
The IRS must get its taxes upfront. They do not wait for a foreign owner to file a return and then pay taxes. The regulation even goes to the extent of holding the buyer of the property liable to pay taxes by filing Form 8288 (Part I), or having the Withholding Agent to sign off on Part II of the Form 8288 .
The Title/Settlement Company will file settlement papers with the IRS, and will ensure who pays withheld advance taxes to the IRS on Form 8288. 

Visa Situation for Foreign Investors

If you plan to get a U.S. visa to live and do business in the U.S., you may try to get an appropriate visa for an extended stay in the U.S. and run the business. This should be discussed with an immigration attorney

How Can We Help You?

As real estate professionals we are your service partners in accomplishing your investment goals for residential properties in Orlando, Florida.
It is feasible to target potential rental properties that may give you a safe return of around seven percent Revenue-to-Price.
We work in a team environment of established professionals in Orlando metropolitan area with excellent reputations, track records, and significant expertise in all critical areas of investing, buying and selling.
If you are a foreign seller of your properties in Orlando, or close to Orlando, we are here to help you sell your property or properties with the help and assistance of your property manager and Withholding Agent.

Drop us an email with your questions, and we will provide prompt, helpful responses. Let us help you work on your model for acquisition or sale. 
We are here to help with your investment and ROI!


Thinking of relocating south for the Winter? Buying a second home in a beautiful, warmer climate with lots of sunshine?

Homes for sale in Florida

Orlando is the Florida destination for you!

Migratory birds have an uncanny instinct when to leave the brutal cold of the north and move down to the warm south. These birds have an amazing internal navigation system, an internal GPS. They know when to fly out, where to rest, where to reach, how long to stay, when and where to breed and return.

Taking a cue from migratory birds, people from colder climates of North America and Canada, who have the choice and financial resources to live away from their home city, tend to relocate to warmer places with longer days and daylight hours.

For seniors, blizzards and bone-chilling temperatures do not bring excitement, rather they bring anxiety and fear. 

Florida is a favorite for permanent relocation and for second home nests. Orlando is one of the best and most popular choices for relocation for those with the means and financial resources.

Central Florida in general is high on the popularity scale for relocation.

Orlando ranks as the MOST popular.

Browse over this article on Wikipedia and compare its attractions with other places you may like to relocate to. About 70 million people visit this international city every year. Traffic runs smoothly. Civic sense is high. Public services are superb. 

Relocation is a big decision to make.

To make it easier we have provided some resources for you to browse over about the Orlando Metropolitan Area (Orange County, and surrounding areas). It is extremely important that you select the community where you’d like to buy your new home and get to know the values of the properties there. Apply SEARCH criteria on this site to pull up properties, and you will narrow down your choice pretty soon.

It is always a great idea to visit Orlando, spend a few days, and familiarize yourself with the area. 

It will be more than worth your trip to engage an experienced Realtor to discuss your plans, and options, and to get to know the local information for the purchase of your new home.

Feel free to contact me for specific information.

For Orlando, FL Residential Property Investors

Residential Property Investors in Orland,FL

Real Estate investors come in a wide variety of personas. They have different goals and different
financial restrictions to work with. Typically, an investor falls in one of these flavors:

  • Buy bank-owned properties for dimes on a dollar. Fix, sell and make money.
  • Buy distressed properties on Courthouse steps. Fix, sell, and make money.
  • Buy properties in high-risk settings for rental with intensive property management.
  • Buy properties in low-risk settings for long-term rental with soft property management.
  • Buy properties with personalities for rental, and leave professional property managers to manage.
  • Buy properties as REIT (real estate investment trust) in corporate settings, for long-term rental and value appreciation.
  • Sell rental properties the investor has been holding on to, to pull equity.
  • Sell rental properties when the seller is changing over to other investment strategies.
  • Buy a residentially zoned lot from a developer or in the open market, build a home and sell.
  • Buy run-down property in an upcoming area, demolish and build a new home to sell.
  • Foreign buyers and sellers of properties who want to take advantage of current
    market conditions.

Properties with Rental Personality
From the variety of investors listed above, it is presumed that you are a passive investor who has long
term strategy to park leveraged money in residential properties and hold them for their rental revenue
potential and equity buildup.
A real estate professional will work best to find such properties listed for sale for the investor to
purchase, and help the investor for immediate rentals.
An investor would prefer to invest in such properties that:

  • Have plenty of life left before obsolescence.
  • Are in areas that are up-and-coming, buzzing with life.
  • Are in great demand by dependable renters in middle-class income, who may be potential buyers in the near future.

An investor wants to know the ROI (return on investment) – cash on cash.

To get the answer to this key question, an investor should always look for a professional Realtor® who not only has the local knowledge to find the right properties and their rental potential but also to assist
the investor in retaining the services of a reliable professional property management firm for security, care, maintenance, and management.

If you are in the market to make an investment in residential real estate and generate a steady income stream, Orlando would be a great choice. Look this over :Orlando Metropolitan Area.

We have put together an Excel spreadsheet for you to serve as a template for analysis of potential rental properties. Download this file to check your interest. It is a great time to make an entry in the Orlando market.

For Home Seller in Orlando

Home Seller in Orlando

There are 5 types of home sellers. Which one are you?
Type 1: You have lived in your home for a number of years, and you want to sell to buy
a new home.
Type 2: You are an investor who purchased a rental property, and it is a great time to sell.
Type 3: You are relocating due to a job change or personal reasons, and you have to sell.
Type 4: You have defaulted on a bank loan, and the bank is compelling you to sell the property to settle your debt.
Type 5: You are a property flipper, who bought the rundown property for a great price; after
investing in renovation and reconstruction you created equity in the property and now want to sell to cash in on the equity.

Selling your home is either done by choice, force or circumstance. (Circumstance such as a health-related or age-related situation.)
As a seller, you want to get the best deal you can get.

On paper, you want to make a killing in the sale of your property and walk away with a big smile and an even bigger check, with an eye toward your next smart home purchase.

However, the market determines the sale price of the property for the seller AND the buyer.

The Art and Science of Home Sale Through Realtor®
This is where art and science meet in the eyes of the buyer. The open marketplace on the internet brings sellers and buyers closer, but never close enough. This is where the seller typically pays the piper – the Realtor® – to play the pipe to attract buyers. It is the professional obligation of the Realtor® to advise all parties to put their best foot forward in the marketplace and be a formal interface.

Property Sale Price
The sale Price of a property is a sensitive subject between a seller and the Realtor®. Putting a property on the market, engaging in the sales and marketing of the property, and qualifying and dealing with buyers
is very time-consuming. 

In a healthy marketplace, an appropriately priced property will sell within a reasonable and expected time-frame depending upon the marketplace. 

If a house sits in the market too long, it gets stale. Residential real estate is extremely sensitive to place and location and can be affected locally, block-by-block, house-by-house.

Expenses to Sell
Professional services to sell your property comes with some expenses. You have to be paying well to the Buyer’s Agent to bring qualified buyers to show your property and move it off the market with a contract
on it, the sooner the better. Pay well to your Listing Agent as well to protect your best interest in the marketplace. 

First Time Homebuyers

First Time Homebuyers

The financial system in the U.S. is designed to create opportunities for an individual to live better by
progressive enrichment. The growth of population and production of goods and services puts homeownership at the national level as an essential industry that must be protected and promoted. What happens in the housing industry has far reaching effects on other crucial areas of economic growth. The national policies of the housing industry have gone far to give a semblance of a social cause. When social wealth improves, the individual homeowner is the main beneficiary.


It is best to draw up a spreadsheet for yourself to figure out what discretionary income you have AFTER subtracting expenses from your regular steady income.

Typical expense categories are: 

  • Home Related Expenses
  • Basic Expenses
  • Cars/Transportation
  • Utilities
  • Telephones
  • Food
  • Education
  • Medical
  • Loans
  • Recreation & Social Life
  • Personal Maintenance
  • Children
  • Aging Parents
  • Risk Management
  • Other

Typically, most first-time home buyers are first-time family makers. Remember to set aside a reasonable budget for the start and care of your family. 

Your income capacity, saving and spending habits will qualify you for a loan to borrow money to purchase a home. You must discuss your loan capacity with a lender, bank or mortgage broker. When
you have a Letter of Loan Pre-Approval from a lender, you are in a position to shop for a home. Since the home buying process and procedures are complicated, always engage a REALTOR® to formally assist you. Typically, the seller pays the fee to the REALTOR® for services in selling the listed home. 


When a bank qualifies you for a home loan to make up for the shortfall from your down payment, the bank trusts you based on your savings, your current earnings, your spending habits; and believes in your commitment to honor the loan by your future earning power. This is your creditworthiness. This is the
power of leverage, an advantage by a small down payment for big borrowing. The bank keeps your property as collateral to recover loaned money if you fail in your commitment to pay.

You are making an astute financial decision to borrow money and use it in your homeownership process over time.

The graph above shows the typical life of a loan and progressive equity building up in your home. Note how you are building up your wealth by paying off the amortized loan at committed interest rate, and adding equity in your home due to the decrease in your loan balance and increase of its market property value over time.
In a healthy market, the price increase of residential real estate is 2% to 3% above consumer price index,
the inflation rate in the economy.

The present value of your decision to purchase today is the present dollar value of the anticipated future
value of the property likely to happen. 

In conclusion, get a home purchase loan with the least fixed interest rate, lowest down payment, and
pay it back over time; the sooner the better!
This is the recipe for building family wealth via your income stream.

Pre-Qualify Yourself for Home Loan!
Download this Excel spreadsheet ‘Household Budget’