Financing Las Vegas Real Estate for Foreign Nationals

With the dollar expected to rise against foreign currencies later this year (that trend has already started), foreign investors are hurrying to purchase real estate in the US while their dollar goes further. Most of these investors are targeting the Las Vegas real estate market in particular, where the sharp decline in prices (due to the high amount of Las Vegas foreclosures) and the world class amenities have made it an attractive get-away destination. In particular, Canadian buyers are looking to Las Vegas homes as a vacation retreat from their harsh winter climate.

Most banks will not loan on real estate outside of their own country. With all the recent shifts in the credit markets, the qualifying criteria has changed for mortgage loans in the United States across the board, including those to foreign purchasers. Prior to this year, a foreign national could obtain financing from US banks as long as they had 35% to put down with no or limited documentation. Now US mortgage lenders are requiring full documentation of income and assets on all mortgage loans without exception, though the down payment requirements have dropped.

A citizen of a country other than the US can obtain a loan for property in the US based on what classification they fall under. A permanent resident alien is a foreign national who has been granted the right to work in the US permanently and who has been given a US social security number. A permanent resident alien can purchase property under the same guidelines as a US citizen. They can get a loan with as little as 5% down payment for a primary residence, either on a fixed rate or adjustable rate mortgage at the current interest rates available to US citizens.

All other foreign nationals, including those with temporary work visas, are required to put down a minimum of 25% for properties under $650,000 or 35% for properties over $650,000, whether the property is a primary residence or a rental property. Lenders will also require the equivalent of a US TRW rating as well as full documentation of their employment income and assets. In addition, the down payment money must be “seasoned” in a US bank for at least 60 days prior to the close of escrow.

These loans to foreign nationals are only currently available as adjustable rate mortgages or ARMS. The fixed rate terms can be for 3, 5, 7 or 10 years and interest rates are currently running between 7.5% and 8.5% with approximately 5 loan discount points prepaid for the amount of the loan (points can vary on a day to day basis just like interest rates). Each point is the equivalent of 1% of the loan amount, so on a $100,000 loan 5 points would be $5,000.

Another alternative is for the foreign national to obtain an equity credit line on their property in their home country and come to the US with cash in hand. Cash offers are very strong, and enable the buyer’s agent to negotiate the best possible price on behalf of their client.

For more information on getting qualified for a Las Vegas mortgage and to receive the latest listings on great deals in Las Vegas new homes, high rise condos or MLS listings, please contact our office at 702-985-7654 or email us at sold@greatlasvegashomes.com.

Las Vegas Home Inspectors

I really must begin by thanking Diann Tonnesen for offering to allow me to blog on her site. In case you’re not aware Diann is somewhat of an icon in the Las Vegas real estate community. To be offered to provide input for her web site is truly an honor. Thank you, Diann.

Diann told me that I could write about anything I wanted to write so I chose something that has been needling me for quite some time now; the way people shop for a Las Vegas home inspector. Do you realize how most people shop for a home inspector? They gain a list of inspectors, usually from their real estate agent, and call three or four inspectors asking what they charge for the inspection. They generally do this without knowing what they are buying. Especially with all the Las Vegas foreclosures on the market being sold "as is, where is" this truly boggles the mind.

Can you imagine people shopping for a car they same way they shop for a home inspector? It would look something like this:

Ring, ring.
“Hello, Lamborghini, Mazarati, Rolls Royce, Bentley dealership, can I help you?”
“Yeah, hi. You guys sell cars, right?”
“Yes ma’am, we do.”
“What do you charge for them?”
“Excuse me?
“Yeah, you know, how much do they cost?”
“Well are you aware of what kind of cars we sell?”
“Naw, I’m really not interested in hearing about that, I’m just calling around getting prices.”
“Well we have a beautifully reconditioned Bentley on sale this week that is valued at $35,000 that we are selling as a lost leader for $22,000.
“That’s great. Twenty-two thousand hunh? Okay, I may call you back. Thanks for your time.”
Ring, ring.
“Yeah, Arties Autos. What do you want?”
“Yeah, hi. You guys sell cars, right?”
“Why sure we do. What cha lookin for toots?”
“How much do you charge?”
“Well I can put you in this sweet little Yugo that was towed in, I mean, that came in last night for say… $15,000.”
“Fifteen thousand hunh? Okay. Sweet. I’ll take it.”

Sound absurd? Well sure it does. But many, many people who are about to make what is often the single largest purchase they’ll make in their entire life shop for their home inspector and their Las Vegas mortgage loans the same exact way.

So here is where I am coming from: I retired from the Navy in 1998 after spending nearly my entire adult life as an engineering inspector. I wasn’t just an “engineering inspector,” I was an engineering inspector and instructor where I was one of eight members of an elite team that earned the distinction as the most successful engineering inspection team in the history of the United States Navy. The distinction still stands today where our success record has never been matched.

When I retired from the Navy I transitioned into the civilian world as a Las Vegas real estate agent. After several years as a modestly successful real estate agent I became very frustrated with the quality and depth of home inspections available for my clients. There simply weren’t any good inspections available. The inspectors were more interested in protecting their own liability through the use of complicated and legalistic inspection agreements than they were in protecting my clients. I couldn’t even find an inspector who would walk on a concrete tile roof. They mostly used binoculars to review the roofing.

I thought the public deserved better. I thought people wouldn’t mind paying a little more for a true quality inspection where the inspector spent hours really investigating the home rather than hiring an inspector that spent several minutes walking through the home filling out a worthless checklist that contained no actual useful information.

I set out to create such a service. Now, after nearly eleven years performing thousands of home inspections, continually refining our procedures, attending thousands of hours of training, holding hundreds of training seminars, and developing an organization that is truly unique and first class I can truly state that there is no better inspection service available in the entire Las Vegas Valley, regardless of the price. It is not an opinion; it is a fact. We have inspecting Las Vegas homes down to an art. We don’t do cheap inspections, and our service is nothing like the inspections that the cheap guys perform.

Nowadays, the most common comment I hear is that we don’t charge enough for our inspections (compared to what we provide). I once had a home buyer say that he didn’t think we charged half of what we should charge for our service. I promptly quipped, “That’s not a problem. You’re more than welcome to pay double.” To my astonishment he did exactly that.

It is a statistical fact that the average home inspector ends up in litigation an average of three times each year because of issues the inspector did not discover and disclose in the course of his inspection. In eleven years that my company has been in existence neither I nor any of the inspectors who work for me has ever been named in any litigation in conjunction with a home we inspected. We have never gone to arbitration; we have never gone to mediation; and we were recently named on the Honor Roll for the Better Business Bureau of Southern Nevada, once again, for maintaining a complaint-free status.

For the consumer who swallows the paradigm that all home inspections are pretty much the same and selects their home inspector based solely upon the price of the inspection, they often get exactly what they are looking for: a cheap inspection. But for the consumer who shops for their home inspector based upon the quality of the service provided and who is able to discount the paradigm that all home inspections are the same: these are people who draw outside the lines and when they stumble across our firm we reward them with a Picasso every time. I can only hope that when it is time for you to get a home inspection you are able to discern the difference between “Art” and “Artie.” Have a great day!


Paul J. Donohue, RHI, RREI, CREI
President / Senior InspectorSpectrum Inspection Group Inc.
8345 Coyado Street
Las Vegas, NV 89123

Email: pdonohue@INSPECTLV.com
Web: http://www.inspectlv.com/
Scheduling: (702) 269-6716

Good News for Cosmopolitan Condo Owners

To the right, the Las Vegas Cosmopolitan Condos and the
Bellagio Hotel and Casino, to the left the MGM CityCenter project.
Phot0 taken September 5th, 2008.

Many proposed high rise condo projects around the country have had the plug pulled in the past two years due to cost overruns and tightening credit. Since Deutsche Bank announced they were beginning foreclosure proceedings on the Las Vegas Cosmopolitan condo hotel project at the beginning of 2008 on their $760 million dollar loan, over 1800 contract owners have been holding their breath, wondering if the development would be completed. Or if they would get their money back in full if the development was canceled.

There were many "interested parties" making bids to purchase the project, but as of this week Deutsche Bank has taken over full ownership of the Cosmopolitan under an affiliate, Nevada Property I. Deutsche Bank was the high bidder, paying $1 billion at a recent foreclosure sale to acquire ownership of the project.

And Deutsche Bank isn't letting any grass grow under its feet to make sure the project goes forward. It has already inked contracts with Related Companies to take over as the resort's new developer. In addition Perini Corp. signed a new contract to complete construction work on the project. Perini has been working on the project from the beginning, and was being paid under an interim agreement since March when Deutsche Bank began foreclosing after the original developer, Bruce Eichner, failed to complete a deal to secure more financing. Increased construction costs helped drive the Cosmopolitan's construction budget from its original $2 billion price in early 2006 to its current $3.9 billion price, and Eichner was unable to find a new partner with enough capital to infuse into the project.

A letter has already been drafted to contract owners by the resort's new developer, Related Companies, letting them know of the management changes and informing them of progress to date. This letter will go out on Monday to almost 1825 contract holders, assuring them of the project's completion. To date over 50% of the Cosmopolitan's exterior construction has been completed, and it is anticipated that by December of 2008 owners will be celebrating the "topping off" of both towers, including the penthouse units. The new proposed completion date for the entire project is estimated for the second quarter of 2010.

Along with a rebounding resale housing market, this is great news for the local Las Vegas real estate market. For four months straight statistics have shown a significant rise in Las Vegas homes sales, with multiple offers on lower end properties, especially Las Vegas foreclosures. The buyers are back!