Foreign Investors Win Big in US Housing Slowdown

 

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

While Americans panic about 7% mortgage rates, I’m buying properties at a discount.

The US housing market is experiencing its slowest April since 2009. Sales are down 0.5% and inventory is up 20.8% year-over-year. The national median home price hit a record $414,000.

Most domestic buyers see these conditions as problematic. I see opportunity.

I’ve purchased over 120 US properties as a foreign investor since 2016. The current market presents unique advantages for international buyers that most Americans completely overlook.

Related: US Mortgage Rates Down Slightly Over Memorial Day Weekend May 26 2025 2025

The Interest Rate Advantage

Foreign investors are less sensitive to US mortgage rates. We’ve always paid higher rates.

Many of my international buyers come from countries where mortgage rates top 30%. Looking at rates of 7% or 8% isn’t scary – it actually looks incredibly good.

Most domestic investors are fixated on rates in the short term. They’ve been conditioned to see anything above 5% as “bad.” But the mortgage is just a tool you use to acquire a bigger asset than your available cash allows. If the tool still works at 7% or 8%, then it still works, period.

Related: The Top 10 Most and Least Affordable Housing Markets in the US in 2025

Currency Exchange Benefits

Current economic policies are keeping the value of the US dollar relatively low, so foreign investors holding other currencies are taking advantage of the difference.

In some cases, this creates an effective 10% discount on US properties right now for many international buyers.

Today, international borders are just administrative details. Investors can access exceptional currency exchange rates at the click of a button, and make international transfers using their cellphone.

Related: Growing Housing Affordability Gap Creating Golden Opportunity for Investors

Specialized Financing Options

We primarily use DSCR loans (Debt Service Coverage Ratio) for property investment in the USA.

These loans qualify borrowers based on the property’s rental income potential rather than personal income documentation or US tax returns. This makes them ideal for international buyers.

There’s no limit to the number of these loans you can get. As long as you have enough cash for a 25% down payment, and you find a good quality rental property that cashflows, you can leverage your money to buy multiple rental properties right from day one.

Typically, foreigners put down between 25% and 35% when buying property. We’re not looking for deals that work with no money down or tiny deposits like many Americans do.

Related: The Best USA Mortgages for Foreign Nationals in 2025

Negotiation Power in a Balanced Market

Right now we’re leveraging market conditions to negotiate better deals with sellers.

In 2021, we had to compete hard to buy the best properties. Now, with inventory up 20.8% year-over-year, we can negotiate substantial seller concessions.

We’re getting closing costs paid for, and even buying down the interest rate on our mortgages.

We’re happy to pay full price, even to overpay for the right property, but we want our closing costs covered, repairs completed, and extra cash to buy down our mortgage rate.

A $5,500 rate buydown on a $150,000 mortgage can save $36,000 in interest and reduce monthly payments by $100.

Because local buyers are hesitating, we’re able to negotiate much better terms.

Related: Local Market Expertise is Essential for Overseas Property Investors

Regional Focus on Affordable Markets

To identify the best investment opportunities we’re tracking the metrics that drive supply and demand like housing affordability, job market growth, and housing starts.

We’re actively targeting affordable secondary markets. We’re buying in suburbs within a 10-20 minute drive of major cities. Our sweet spot is houses priced between $150,000 to $250,000 – well below the national average.

Cleveland offers gross rental yields exceeding 10% in many neighborhoods, with average home prices under $200,000 compared to coastal cities where prices soar past $500,000.

We focus on C+ and B-class neighborhoods where household income can support both rents and mortgage payments for locals.

We’re buying investment properties where Americans can afford the rent and buy a home.

Related: Best US Property Markets for Foreign Investors

The Long-Term Perspective

While Americans look for immediate “passive income,” most overseas buyers understand that takes time.

We focus on owning the right property in the right neighborhood. Even if we overpay, we know we’re going to own it for 10 or 20 years.

Rents will increase while our financing costs remain fixed. The positive cashflow comes over time.

**The current market slowdown isn’t a crisis for foreign investors – it’s the perfect opportunity.**

Increased inventory gives us more choices. Less competition gives us better negotiating positions. And our global perspective on interest rates keeps us buying while others sit on the sidelines.

For foreign investors willing to take action, the US housing slowdown isn’t a warning sign. It’s a green light.

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