Overseas investors flock to Memphis real estate

Unique business concept, marketing reel in clients

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Feb. 25, 2011

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"I never thought I would be as involved in foreign markets as I am now," he said. "I had to hire nighttime salespeople to deal with the folks from New Zealand and Australia. We start getting calls at 4 p.m., which is their 9 a.m., but it is the end of my work day. I now have a group of people who start work at 5 p.m. and go to 10 p.m."

Jennings is also looking to go back overseas, doing a road show not only in New Zealand but also Australia and Singapore.

"If you jump on stage in Singapore and say American real estate is performing, and by the way we have rule of law and the U.S. dollar may be weak but is going to get stronger, you will find interest," said Waite. "For foreign investors, there's an exchange play, a security play and financial self-defense. Anytime they can put money into secure real estate investments, they are happy."

There is a lot of compliance involved with foreign real estate investments, Waite cautioned. "Investors have got to understand reciprocity and tax treatment between treaties. There are a whole lot of financial services components to it."

What happens on the other side of borders in regard to the treatment of real estate investments in the United States is obscure to most of us, but as far as this country is concerned, there are really no roadblocks.

Just to make sure, I called Richard Keyt, an attorney with Phoenix-based Keyt Law LLC who does a huge amount of corporate formation work.

Foreign ownership is generally done through a corporate entity that is either a corporation, limited partnership (LP) or limited liability company (LLC), and taking Arizona as an example, Keyt told me, there are no limitations as to who can own an Arizona company.

"You can buy real estate as an individual or an entity from outside the United States, but then you have liability issues," he said. "For asset protection purposes involving investment real estate, you should have a corporate ownership structure."

Although the LLC is the choice for most Arizona corporate entities, Canadians buying in the state used the LP, Keyt notes, as it seems Canadian tax law does not recognize the LLC as a partnership.

There doesn't seem to be much in the way of foreign roadblocks in Tennessee either.

"Several people I met in New Zealand have flown into Memphis to see us, check out operations and drive around," said Jennings. "They look at the properties and get a feel for the town. We sold 10 properties to folks I originally met while I was in New Zealand."

Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade," has been ranked as a top-selling real estate investment book for the Amazon Kindle e-reader.

Contact Steve Bergsman:
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