The Dilemma: Obtaining Financing for an Investment Real Estate Purchase in Richmond, VA While Living in Canada

I was contacted by a couple who wanted to buy an investment property here in Richmond, VA.  I’ll name this couple Dan and Kate. They used to live in Richmond, VA, but they have recently relocated to Canada, where Kate is from; Dan is a U.S. citizen, but Kate is not.  Kate and Dan had owned property in Richmond previously and Kate was on the mortgage as a non-citizen.

The Research

I needed more information, so I started my research. I asked Kate a few questions:

1) Do both of you work for Canadian companies?
2) Do either of you still file U.S. tax returns? If not, when did you file your last US tax return?
3) Kate, what was your residency status when you live in the U.S.? What is it now?
4) Kate, do you still have U.S. credit, any U.S. income, U.S. assets?
5) How long have you been back in Canada?

Kate responded letting me know that she and Dan both filed U.S. taxes this year. Kate had a green card and was a permanent resident until relocating to Canada. They both currently work for Canadian companies and if Kate was to return to the U.S she would have to go through the immigration process again.

The Solution

After confirming what I assumed the outcome would be, these were my findings I sent to Kate:

• Dan can purchase an investment property in the U.S.
• Kate may not be on the mortgage as she is not a citizen, currently has no residency status, and does not work in the U.S.
• Dan’s income must been verified with U.S. tax returns as foreign income.
• Dan’s assets must be converted to U.S. dollars (for down payment/closing costs/reserves, if required).
• Dan’s employment will be verified in the normal manner.

Kate was happy to know exactly what steps they would need to take to purchase an investment property in the U.S. while still living in Canada.  Cheers to them for doing their research upfront in order to plan way in advance for this major financial investment.  I find that the sooner you start planning your home purchase and financing of that home purchase, the smoother the transaction will be.  It is common sense, but it’s interesting how many people don’t take the time to do the research six months to a year in advance and are stuck in a holding zone until their credit, finances, or taxes are in good shape before they can buy.