The Market Advantage for Foreign Property Investors in the USA

FREE DOWNLOAD: 10 Costly Mistakes Foreigners Make Buying U.S. Real Estate

I’ve been buying investment properties in the US since 2016. I’ve closed on over 120 properties and used debt to purchase every single one.

I’ve paid interest rates as high as 12% for short-term private money loans and up to 8% for long-term 30-year fixed mortgages. With current rates for foreign national mortgages sitting between 6.75% and 8%, the calculations haven’t changed much for me.

What has changed in today’s market is the competition. Many US buyers are sitting on the sidelines waiting for interest rates to fall. This means less competition, allowing us to negotiate better deals with sellers.

Related: Hidden Costs of Buying Cheap Investment Property in the USA

The Foreign Investor Advantage in Today’s Market

Recently, we helped a client close on a fully-renovated turnkey property in Cleveland. The seller was a local investor who had renovated the house and expected to sell it quickly.

Because local buyers were hesitating, the property sat on his books accumulating interest on the hard money loan he used for purchase and construction. He was eager to sell quickly.

We negotiated a significant seller concession that paid all our client’s closing costs and funded a mortgage rate buydown to 6.75%. This improved monthly cashflow dramatically, resulting in a 9.9% cash-on-cash return in year one based on rents alone.

Related: Local Market Expertise is Essential for Overseas Property Investors

DSCR Loans: The Foreign Investor’s Secret Weapon

DSCR loans are a fantastic tool for foreigners buying property in the USA. The lender underwrites the property rather than the borrower, looking for properties that generate enough net cashflow to cover mortgage payments.

That means no proof of income, no social security number, no tax returns, no proof of assets, and none of the other documentation needed for a traditional mortgage.

These loans are particularly beneficial for foreign investors as they qualify borrowers based on the property’s rental income rather than personal income documentation.

This removes barriers for international buyers who lack U.S. credit history and income verification documents, with approval based solely on the property’s cash flow potential.

Related: Successful Foreign Investors Use Local Market Data to Identify Opportunities

Where to Focus Your Investment Strategy

Right now, the best US property markets for foreign investors are in Northeast and Midwest, and some parts of the South. We target suburbs of major metros with strong job markets, affordable housing, and lower-than-average cost of living.

Internal population shifts in these major metros are driving suburban expansion and demand for good quality affordable housing to rent and buy.

The Midwest and Northeast regions have emerged as prime real estate investment hotspots in 2025, with cities in Ohio, Michigan, Pennsylvania, New York, and Connecticut dominating the list of top markets for investment opportunities.

These regions offer investors steady rental income and growing demand with housing prices that are significantly below the national average.

Related: Why Foreigners Are Buying Investment Properties in the Northeast Midwest and South

Marry the Property, Date the Rate

Many investors see the current 6.5-7% rate environment as a reason to wait. I think if we appreciate the wider context, those rates are actually pretty normal.

As long as a property cashflows with the rate we can get when we buy, then it’s fine. We marry the property and we date the rate.

We can always refinance later if the rate environment improves, but by then we’ve missed out on the deal we had today. For me, it’s always more about the property and the deal rather than the interest rate.

The rate is just one component of a more complex puzzle. Mortgage rates have been as high as 20% historically, and people were still making good returns buying real estate. It’s all relative.

Related: How to Get a Foreign National Mortgage Without a Visa or SSN

Data-Driven Due Diligence

We take a data-driven approach to market analysis. There are fantastic tools and datasets available that help us pinpoint neighborhoods where people are moving and houses are in high demand.

The data gets us to the neighborhood, then we leverage our relationships with local professionals who have expertise at the street level to refine our search down to specific properties.

It’s the combination of high-definition hyperlocal data and local market expertise that creates a successful investment strategy.

For due diligence, we use independent home inspections, sewer scopes, and independent appraisals to identify potential problems and ascertain true market value before we close.

Related: Population Trends Driving Foreign Investment In USA Property

Creative Financing Strategies

Rate buydowns are an exceptional tool for improving cashflow. Negotiating a seller concession and using that to buy down your mortgage rate is a force multiplier.

A $5,500 rate buydown on a $150,000 DSCR loan can save the investor almost $40,000 in interest and improve monthly cashflow by about $1,200 per year. That can transform an OK deal into a great deal.

Speed is also valuable. If we can close on a property quickly, that’s often very valuable to the seller.

We make sure we have everything in place before making our offer, and we leverage the fact that we can close within 30 days. That helps with negotiations—whether it’s a lower purchase price, a concession, or both.

Related: Real Estate Closing Costs in the USA for Foreign Property Investors

Quality Property Management is Key

Property management remains consistent regardless of interest rates. Sourcing and vetting high-quality tenants who pay rent on time, care for the property, and stay for multiple years is fundamental to profitability.

We focus on high-quality renovations which attract better tenants and also limit maintenance/repairs, vacancies, and capital expenditure. All of that improves cashflow for the investor.

For foreign investors looking to enter the US real estate market, the current environment of higher interest rates shouldn’t be a deterrent. Instead, it presents unique opportunities that, with the right approach, can yield exceptional returns.

The key is understanding how to navigate the market, secure appropriate financing, and implement effective property management strategies that maximize cashflow regardless of the interest rate environment.

FREE DOWNLOAD: 10 Costly Mistakes Foreigners Make Buying U.S. Real Estate