The real estate sector in the United States has always proved to be a very lucrative investment for investors home and abroad. The high Return on Investment, stable profit and economy have been massive strengths for the real estate sector. Private lending is when individuals lend their funds to investors or professionally managed funds from real estate while securing the said loan through a mortgage against real estate. Private lending does not differ much from raising capital from offshore investors, besides the latter being a bit more complex. Some of the issues with offshores investors raising capitals are discussed below;
The problem of taxes regarding offshore investors regarding opportunities in the private lending investment is a treatise in and of itself as its tentacles are spread to other key stakeholders in the value chain. This includes the Fund managers being faced with the 30% withholding in most situations and in cases of loan purchase or sale where the investor buys any tax concerns alongside the loan.
- Security Compliance
Issues surrounding funds and their utilization will have a number of regulations both domestically and internationally. Even though regulations could come with a domestic offering, the sponsor may still be responsible for ensuring that the regulations are fully complied with in other countries. There is also the need to avoid the possibilities of money laundering and associated legal cases.
- Identification Issues
Concerns about Identification such as Know Your Customer (KYC) are also primary. This is because offshore banks that send money to the US do not possess the range of FINCEN oversight possessed by US-based banks. As a result, private lenders are enjoined to be fully aware of how to conduct necessary due diligence when dealing with offshore investors effectively.
Click this link to read more about issues surrounding Private money lending and offshore investors and how well to prepare for such dealings.
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