Investing in USA Real Estate your partner in USA property

1. Investing in USA Real Estate

2. contents

3. about our company | contact us

4. USA property investment | high return investment opportunity

5. USA investment strategies | high cash flow

6. USA investment strategies | high capital growth potential

7. where in the USA are Australians investing

8. benefits for Australians investing in USA property

9. determine the right purchase structure

10. funding your USA property purchase

11. paying taxes on your USA investment property

12. renting out your USA investment property

13. buyers advocate service | end to end service - sourcing & facilitation

14. buyers advocate service | property sourcing service

15. buyers advocate service | purchase facilitation service

16. LetAssist | for peace of mind

17. establishing a USA company

18. property research | quality information better decisions

19. process in buying USA property

20. what our clients have to say

21. process to purchasing

22. moving forward with US Property Direct

US Property Direct is the leading Australian property consulting firm specialising in the USA market. Through our research, we are able source quality investment property and facilitate property purchases across the USA. Founded in 2007, our company set out to build working relationships with reputable service providers in the United States. Today we boast a range of services that assist individuals, property syndicates and institutions with their USA real estate goals. As a company driven by core values, our employees demonstrate a commitment to our customers. At US Property Direct, everything we do has one goal - to help our clients achieve their goals. Our mission is to create, maintain and build value for our clients, staff and stakeholders. US Property Direct is a privately held, wholly Australian owned and operated business located in Melbourne. Our service delivery extends Australia wide.

Australia

Level 31, 120 Collins St Melbourne VIC 3000 P] 1300 335 373 +61 3 8678 0370 ( overseas )

F] 03 8679 3370 W] www.uspropertydirect.com.au E] info@uspropertydirect.com.au

USA 5314 Paylor Ln #2240 Sarasota FL 34240

P] +1 ( 321 ) 256 9043 Ext. 3108502 E] usa@uspropertydirect.com.au

Property Management / LetAssist

E] propertymanagement@uspropertydirect.com.au Client Services P] 1300 353 373

E] clientservices@uspropertydirect.com.au Our Online Community

Skype uspropertydirect

Twitter twitter.com/uspropertyd

Facebook facebook.com/uspropertydirect.australia

about our company

contacting US Property Direct

The USA presents a once in a lifetime opportunity for Australians… Many investors are familiar with the collapse of the USA housing market. Now in its third year of price decreases, these conditions will not last forever.

There are clear indications that the USA real estate market is showing positive signs of increasing activity. While there are many "markets" within the USA property market, there are opportunities for

Australians to purchase property for the price of what a deposit on an Australian property would cost, while realising high cash flow yields and high capital gains potential.

USA property investment high return | investment opportunity

Record Low Prices Record High Australian Dollar Increasing Rental Demand

The USA is experiencing the biggest property price falls in history

The Australian dollar is at a record high, representing excellent value for the astute USA property investor

Increasing rental demand in the USA making it the perfect opportu-nity to buy investment property

net rental yields between 10% - 20%...really? The answer is YES. Some think that it ’ s too good to be true, however, for the astute

investor, these returns are achievable when you have the right team in place.

We specialise in identifying quality high cash flow returning properties in the USA. Our aim is for our clients to start making money from day one and presenting truly passive investment opportunities.

Individuals seeking to buy USA property primarily for cash flow reasons would consider the following regions:

As part of our commitment, we offer a comprehensive after sales management program to enable your investment to be truly hands off and a passive investment. This includes ensuring that your property remains tenanted, rental income is flowing in on time, regular tenant and maintenance

checks are conducted and that your property taxes are up to date.

want to realise immediate cash flow Self managed superannuation funds retirees who want additional regular income with Australian mortgages, where US rental income can be used to pay down your

Australian debt individuals who want to build a passive income stream

USA property investment strategies high cash flow yield properties

Kansas City, MO/KS Miami / Orlando, FL

Detroit, MI

Rochester, NY Phoenix, AZ

Memphis, TN

best suited to those

purchasing property that is discounted by more than 70% ...really? There are locations in the USA which have be extremely hard hit by the subprime crisis, and these offer an opportunity for Australians to purchase USA real estate at substantial discounts Overall, property prices in the USA are down more than 33%. There are opportunities to buy property

for a fraction of their replacement value, discounted by up to 80%. Individuals seeking to buy USA property primarily for cash flow reasons would consider the following regions:

USA property investment strategies high capital growth potential

Las Vegas, NV Detroit, MI

Austin, TX Houston, TX

Miami, Fl Orlando, FL

Phoenix, AZ Cleveland, OH

want to realise a substantial capital gain in future years have a long term outlook and willing to hold onto their investment who are not concerned about achieving the highest possible rental return who already have a property/portfolio of high cash yield property individuals who are seeking to build an asset base

best suited to those

where in the USA are Australians investing

Cleveland, OH Price Range: $60k - $90k Target Yield: >12% net

Pittsburgh, PA Price Range: $70k - $120k Target Yield: >10% net

Orlando, FL Price Range: $40k - $120k Target Yield: >12% net Miami, FL Price Range: $40k - $150k Target Yield: >12% net

Kansas City, MO/KS Price Range: $30k - $90k Target Yield: >16% net

Austin, TX Price Range: 80k - 150k Target Yield: >8% net Dallas, TX Price Range: 80k - 150k Target Yield: >8% net San Antonio, TX Price Range: 80k - 150k Target Yield: >8% net

Detroit, MI Price Range: $35k - $80k Target Yield: >15% net

Memphis, TN Price Range: $50k - $80k Target Yield: >15% net

Phoenix, AZ Price Range: $60k - 150k Target Yield: >10% net

Las Vegas, NV Price Range: $50k - $150k Target Yield: >13% net

Australian investors are investing for different reasons. Some prefer to invest in higher cash flow yielding properties and others seek to realise a substantial capital gain. Below is a map

of where we are currently seeing increasing demand by foreign investors.

Rochester, NY Price Range: $35k - $100k Target Yield: >16% net

Discounted Property Market Once in a lifetime opportunity to purchase quality real estate at lowest recorded prices

High Rental Yields

High rental yields between 10% and 20% net, not generally achievable on Australian property.

High Capital Growth Potential Purchasing property at discounts of up to 70% on historic prices leaves room for high potential capital growth as the USA market recovers

Strong Australian Dollar

The Australian dollar is trading above parity, offering some excellent opportunities to purchase USA property at a considerable discount to market

High Rental Demands

Areas with increasing rental demand, offering higher yields and predictable income

Potential Low Entry Point Access the US property market with as much as a deposit on an Australian property. Quality investment opportunities are available from $35,000

Ease of Purchase & Ownership

Purchasing and owning property in the USA can be just as simple as here in Australia, when you have the right team on your side

Flexible Ownership

The USA does not discriminate who owns property: individuals, companies, trusts and even self managed superannuation funds (SMSF) can all own USA property outright and freehold

There are some real benefits available to Australians investing in the USA property market. With increase in demand, the USA is on the verge of recovery and the time is right for the astute investor to capitalise on a once in a lifetime opportunity.

benefits for Australians investing in USA real estate

Determining the best purchase structure is important to ensure you gain the maximum benefit from your USA investment property. The USA does not discriminate who owns their property. Property can be purchased through the following entities: Personal name

Multiple persons names

Australian Trust ( discretionary, hybrid )

Australian company ( private Pty Ltd or public Ltd )

Self Managed Superannuation Fund ( SMSF )

USA company (LLC or C-Corp )

USA trust structure

determine the right purchase structure

Access to qualified advisors Speak to your property consultant about how to best structure your USA property purchase. We can refer you to qualified USA

accountants & advisors as well as Australian accountants

Cash The majority of purchases of USA property by foreign investors are cash purchases. When considering that you are able to purchase a property for what a deposit on an Australian property would normally cost, cash is often a viable option. There are may benefits of using cash to fund your purchase, with the biggest being negotiating power. Cash purchases can settle/close much quicker than a financed purchase and motivated sellers are willing to negotiate on price and terms more willingly. Considering the potential returns, these often outweigh any returns an individual may receive on having money in a managed fund. Superannuation Funds (SMSF) Australians can now utilise their superannuation funds to directly purchase property in the USA, via their self managed superannuation fund. It is best to speak with your accountant or financial planner to determine if this is the best strategy for you. Equity Release One way to access finance from Australia is to redrawn on any existing equity. Purchasing property with high rental yields can prove an intelligent strategy in reducing your local debt. USA finance Whilst it is still very difficult to obtain finance from the US due to the credit crunch, there are funders that will fund your USA properly purchase. Whilst we cannot arrange finance from our Australian of-fice, we are able to provide you with a list of lenders that may be able to obtain a loan through. There may be options to access finance through seller/vendor finance or mortgage assumption. Australian finance Obtaining finance from Australian lenders to purchase USA property can be a challenge. Unfortu-nately, Australian banks are generally unwilling to secure a loan against the USA property. The most common way to access Australian finance is through an existing equity release. International finance Lenders such as HSBC and Citibank may be able to fund your property purchase. These lenders generally have a very strict criteria and arranging finance through these companies can take many months.

funding your USA property purchase

If you are earn an income from your USA investment property, whether this be through a regular rental return or realise a capital gain, you will be required to pay tax in the USA. How much tax you pay will be determined by a range of factors, including but not limited to: how much income you earn which state/county your property is in the type of entity that owns the property (Australian trust, LLC) which state the LLC is registered in how many members are attached to the LLC how long you hold your property for There are also different types of taxes, again here are a few, but the list is not exhaustive: federal taxes state taxes county taxes school taxes capital gains tax A common question we are faced with is: “Do I have to pay taxes in the USA and in Australia?”

The answer is NO. Australia and the USA reached a tax treaty some time back to ensure that individuals were not double taxed. You will be expected to pay tax in the USA and any tax you pay will be classed as a foreign tax credit on your Australian return. It is important to keep in mind that before your income is calculated for tax purposes, you apply all the allowable deductions: maintenance property management fees buyers agency fee (our service fees) depreciation interest (if applicable) rates (county taxes) travel to the USA once you own the property We understand that every clients situation is different so there is no hard rule on how to best structure your USA property purchase. It is best to speak with an Australian and USA accountant before purchasing property to ensure your structure is designed for maximum benefit. Speak to your property consultant who can refer you to these service providers.

paying taxes on your USA property

In the USA, tenancy laws and regulations differ from State to State, much like they do here in Australia. We un-derstand the USA markets and can explain in detail what is required in renting out your property in the location you select. If you are seeking an income property, we would ideally source a property that has tenants with a good history. Occasionally we will need to find tenants and we entrust our network of reputable property managers. We work with property managers who predominately work with foreign investors. These property managers will source quality tenants, collect and distribute your rental monies, conduct regular inspections, ensure that your tenants are treating your property as if it were their own and act quickly to maximise your investments return. Speak to your property consultant about LetAssist or if you have any questions relating to renting your property

renting out your USA property

keys to a successful tenancy... buy in the right area The first step to a successful rental tenancy is finding a property that suits you. Proper-ties in areas that are predominately owner-occupied will generally attract better quality tenants and be in demand win - win relationship Understanding that having a tenant is a rela-tionship and as long as all parties communi-cate and are satisfied, the relationship should continue without issues quality tenants Ensure that your property manager conducts all the checks and has a set criteria for new tenants understand the market Different properties attract different tenants, Speak to your property manager about what types of tenants your property will attract. act quickly Should a issue arise with a tenancy, it is im-portant to have a property manager that will act quickly to minimise any costs of vacancy you could potentially incur

At US Property Direct we offer Australians an alternative. Through our relationships and expertise, you can now safely enter the USA real estate market whilst enjoying the benefits it has to offer. We

work directly with buyers to source and facilitate their USA property purchase in addition to providing all the support and after sales services needed to manage your USA property.

our services client focussed | results orientated

buyers advocacy services

Whether you are seeking an end to end service, property sourcing service or have found a property and need assistance with purchasing, we have a service that will suit your needs. Working by a fee for service model, our clients are able to access expert advice, save time and money and maximise their return, without worrying about two-tiered pricing

establishing USA companies

We have partnered with one of Americas largest and most reputable incorporation companies. We have the ability to setup USA companies from our Australian office in as little as five days

property market research & consulting

With access to the most comprehensive and accurate information available in the USA, we can util-ise our own expertise to deliver superior investment property advice

local property management Through our relationships in the USA and our local service delivery, LetAssist, we ensure that you have peace of mind when renting out your USA property. risk reduction strategy

To minimise the risks of any investment, you must first understand them. We pay attention to the risks and have developed key strategies to minimise them

Designed for the investor who wants to take advantage of our experience and relationships, save time and ensure everything is taken care of, our end to end service offers more than any other com-

parable offering. As a client of US Property Direct, you will have access to an experienced USA Property Consultant who will consult with you at every stage.

buyers advocate services end to end service - sourcing & facilitation

Find the right property conduct detailed property preference

interview conduct research through our trusted

network of real estate professionals in the USA coupled with our own in house research

present detailed property report outlining investment appeal of suitable property

Determine the best purchase structure consult on best purchase structure in-

cluding the benefits and costs referrals to Australian & USA

accountants / tax specialists / lawyers /

attorney US bank account / Forex arrangement

Property Negotiation and Selection discuss with client on properties

investment appeal and justification negotiate contract property price and

terms

Settlement / Closing liaise with buyers attorney / title com-

pany to ensure closing occurs on time facilitate and communicate closing

instructions to all parties ensure all closing documents are

registered by the county

advise on closing process with client facilitate the handover of the property

from seller to buyer

Pre-Settlement Administration engage a buyers attorney arrange for title insurance arrange for pest/building inspections

communicate with buyers attorney appoint local reputable property

manager

arrange for property insurance quotes

After Purchase Service arrange for delivery of closing/title

documents to the buyer access to LetAssist, for 12 months after

your purchase.

end to end service includes:

Fee for Service AU$3,495.00 ( incl. GST )

Designed for the USA property investor who has already found a property they intend to buy. Our purchase facilitation service includes a full analysis on the chosen property, highlighting investment

appeal and identifying any potential issues. Our highly trained and experienced property negotiators will negotiate directly with the property seller / sellers agent to agree on a price and terms that is in the best interests of the buyer.

Our clients are able to leverage our local relationships, as we will take care of engaging the services of a buyers attorney, title insurance company and arrange for property insurance and property man-

agement. You will save time and stress, knowing that you have a team ensuring your property purchase and investment is successful.

buyers advocate services property purchase facilitation

Property Negotiation and Selection discuss with client on properties

investment appeal and justification negotiate contract property price and

terms

Settlement / Closing liaise with buyers attorney / title com-

pany to ensure closing occurs on time facilitate and communicate closing

instructions to all parties ensure all closing documents are

registered by the county advise on closing process with client

facilitate the handover of the property from seller to buyer

Pre-Settlement Administration engage a buyers attorney arrange for title insurance arrange for pest/building inspections

communicate with buyers attorney appoint local reputable property

manager

arrange for property insurance quotes

After Purchase Service arrange for delivery of closing/title

documents to the buyer access to LetAssist, for 12 months after

your purchase.

property purchase facilitation service includes:

Fee for Service AU$1,995.00 ( incl. GST )

Finding the right property can be a challenge with so many properties available and so many sellers looking to sell you property. We source property throughout the USA for our clients, and have a

tough criteria for what constitutes a “good investment ” . The first step is to determine what you are seeking from a USA investment property. Once we under-stand your objective, we are able to consult on the various opportunities.

We take pride in our ability to identify quality investment property. We act only for the buyer so you can have confidence that we are working in your best interests. We are aware of certain practices

such as two tiered pricing and are completely transparent in all our dealings. We act solely for the buyer and never sell our own property or accept any commissions form property sellers or third parties.

buyers advocate services property sourcing

Find the right property conduct detailed property preference

interview conduct research through our trusted

network of real estate professionals in the USA coupled with our own in house research

present details property report outlining investment appeal

Determine the best purchase structure consult on best purchase structure in-

cluding the benefits and costs referrals to Australian & USA

accountants / tax specialists / lawyers /

attorney US bank account / Forex arrangement

Property Negotiation and Selection discuss with client on properties invest-

ment appeal and justification negotiate contract property price and

terms

property sourcing service includes:

Fee for Service AU$1,995.00 ( incl. GST )

Our LetAssist service is designed to ensure your USA investment property is a turnkey and truly passive investment. Our in-house property management offers peace of mind for the foreign investor.

We ensure that your property manager is delivering results by way of collecting and dispersing your rental income, conducting regular inspections and making sure all your property outgoings are up to date.

Through our online LetAssist portal, Australian property investors can:

We understand that a relationship exists between the property, landlord and tenant. One of the keys to a successful tenancy is communication:

Through our online LetAsisst portal, tenants are able to:

LetAssist property management | peace of mind

access tenancy information view history of all property leases,

payments and tenants view current balance sheet and income view and authorise any maintenance

requests

access property related documents online

receive notifications from your property manager and/or tenant directly

run live reports on the financial status if your investment property

access tenancy information view payment history

submit maintenance requests

contact their property manager and/or landlord directly

update personal contact information access list of important local contacts

with phone numbers

establishing a USA company

The way you structure your purchase vehicle can be just as important as the asset itself. Setting up an LLC (limited liability company) provides some great benefits for USA real estate investors. By partnering with one of Americas largest and most reputable incorporation companies, US Property Direct has the ability to set up USA companies from our Australian office.

our LLC package includes

a limited liability company can offer

costs involved This largely depends on which state you want to incorporates a company in and where the company will operate ( ie. own property ). For example, to establish a Delaware limited liability company

costs AU$900.00 and can be established in 5 working days. Annual fees for USA companies also differ, however expect to pay between US$200 and US$800 per annum

Asset protection in the form of limited liability

Limited liability is offered to the LLC which offers an added level of protection for your assets Potential Taxation Benefits

Highly dependent on your individual situation. Speak with your accountant / financial planner for

more information relevant to your circumstances Flexibility Of Asset Ownership

Holding assets such as your USA investment property in an LLC means that transfer of ownership can be as easy as changing the details of a shareholder in the LLC. Likewise, other entities can own your LLC and this includes your Self Managed Superannuation Fund ( SMSF ) Cost Effective Structure

An LLC can be established from AU$900.00, with low annual fees Easy to Establish an LLC

An LLC can be setup in as little as five working days

Name Check

Drafting of Required Documents

Filing of Documents with State office

Full LLC documentation

Free Business Consultation with US CPA

Complete EIN ( Employer Identification Number ) service

Registered Agent for 12 months

Payment of State Filing fees

property research quality information | better decisions

US Property Direct believes that good information leads to better decisions, and this can be very important when purchasing property in the USA. We gain access to information in three ways: 1. paid data subscriptions ( RealQuest Professional, RealtyTrac )

2. publically available data providers ( County assessor records, Zillow, Trulia ) 3. our own on the ground research (our own staff, third party professionals )

In assessing the investment appeal of a particular property, we take into account over 60 metrics in-cluding current and historical employment rates, vacancy rates, crime rates, price and inventory

trends, weather risks, tax rates, access to transport and infrastructure and possible development in the area.

Every property we present to a client for consideration has been through our exhaustive process and all information will be presented to the prospective buyer. We pride ourselves on being able to be transparent throughout the process.

our knowledge partner | RealQuest Professional

RealQuest Professional is a product by CoreLogic. RealQuest is the leading solution for USA real estate data and information. With access

to detailed reporting and analytics on over 145 million properties, we are able to gain access to over 97% of all property transactions within the USA. RealQuest is used by many of the largest USA lenders, in-surance providers and banks.

Speak to your property consultant about how our research team can assist you in your USA property endeavours

what our clients have to say

“ US Property Direct made the entire process simple. They provided me with great informa-tion and guided me through the entire process, which is now enabling me to have the confi-dence to grow my portfolio “ Michael Sullivan, VIC

“ I have never dealt with a company that pays so much attention to getting the desired re-sult - at any cost. They have constantly worked hard to find the right property for me and see it through to the end “ Bruce Reed, VIC

“ I considered a few companies before deciding to enlist US property Direct to help me buying my first property in the US. I have to say that I have never looked back and continue to enlist their assistance on more property purchases “ Sarah Greene, NSW

“ These guys know their stuff. They can see through the various tactics of some real estate agents and work hard to get the deal done “ Dale Wilcox, QLD

“ What I really wanted was a team that would not just help me find a property, but one that would support me after I had purchased. US Property Direct continue to make sure that my investment is performing how I expected “ Joan Sutton, WA

process to purchasing your USA investment property

You're not alone when purchasing USA property … we are your partner We have a “ buyer focussed ” approach in dealing with our clients. We understand that it is our role to provide expertise, save our client time and educate along the way. The process in purchasing property with the assistance of US Property Direct is as follows:

1. property preferences meeting as a client, you will be designated an experienced USA property consultant who will be your contact and resource throughout the process. We will discuss in details what you are looking

at achieving through USA property investment, explain the options and the steps involved

2. purchase structure we will discuss with you your circumstances and refer you to third party advisors should you require. We can establish an LLC from our offices in Australia which saves time 3. property search & negotiation once we understand what you are seeking, we will source your property and present options to you for consideration. Following a property you are happy to proceed with, we will negotiate the best price and terms on your behalf

4. facilitate your purchase once we have found a property and negotiated the price and terms, we will organise the contracts, engage the services of a buyers attorney, title insurance, banking and property

management

5. settlement / closing we liaise with your attorney to ensure settlement occurs and all documents are registered with the county and title is passed to you

investor ownership

throughout your property ownership, we will be here to help

determine what level of assistance you require: end to end service - complete sourcing & facilitation service property sourcing service property purchase facilitation service LetAssist property management service LLC establishment complete our agreement Complete our Buyers Agency Agreement and make payment of the prescribed fee. This can be completed online, downloaded from our website or emailed to you by your property consultant have questions? Please contact one of our property consultants on 1300 335 373 or email us at clientservices@uspropertydirect.com.au

moving forward with US Property Direct