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May 23, 2024 | read

123. Why Foreign Investors Flock to US Real Estate and Tax Tips for Investing in the US with Reed Goossens

Ben Isley

Reed Goossens is a real estate syndicator, investor, bestselling author, and public speaker. Today we discuss Reed’s story of moving from Australia to becoming a US real estate investor, why foreign investors love US real estate, tax tips for foreign investors investing in the US, San Antonio, and much more!

Reed moved to the US in 2012 to be exposed to additional opportunity. Through his work, especially with his speaking and writing, Reed wants to show that if an Australian can move halfway across the world and be successful, anyone can succeed in real estate.

Moving to the US

Reed feels like he had an understand of his origins and still put himself out there. He discovered a REIA (Real Estate Investment Association) in NYC and began attending meetings and networking. Reed believes many people have limiting beliefs and get caught up in their own “what-ifs”.

Reed’s first investment was a property in Syracuse, NY.

“I just needed to get going. You don’t lose weight or get fit by reading about it. You have to go out and take action sometime and get on that treadmill. For me it was: “I don’t get to deal #10 if I don’t make deal #1″… That first deal was the most important deal to me. It proved to me I could do this.”

“[Syracuse] was only a four-hour bus ride. I used to get on the Greyhound bus every Saturday morning. It was a four-hour drive up, the broker would pick me up from the bus station, we’d tour some properties, I’d get back on the bus at 2:00 and be back in NYC by 6:00 to have a few beers with the boys.”

Transition to Syndication

Reed had three properties, all performing well and generating cash flow. He was speaking with a friend, and learned he had recently closed on a 70 unit property. Reed was very intrigued and began leaning about things such as OPM, mentorship, and seller carryback financing.

Reed then found a mentor and began coaching. He sold two of his first properties to pour more money into his business and brand and grow his investor list. This ended up successful and Reed was able to branch out on his own to start Wildhorn Capital.

Today, Wildhorn Capital owns 2,200 units in central Texas and about $250MM AUM.

“If I can do it, then so can the average American.”

Reed and Wildhorn Capital are focused primarily on Austin and San Antonio. In the last two decades, Austin has been experiencing a boom due to institutional and municipality spending to attract businesses. Its important for syndicators to understand their market and avoid spreading themselves too thin. Focusing on one market allows you to build relationships, accurately identify the path of progress, understand job trends and employment, and just be generally plugged-in to the area.

Foreign Investing

About 25% of Wildhorn Capital’s investor base is foreign. However, foreign investors can’t just hand over money to US operators. Foreign investors should set up an entity in the US complete with bank accounts and an ITI (Individual Tax Identification) number. This US entity reports to the IRS like any other entity that invests in a deal. Foreign investors need a good CPA to handle their foreign tax liability and another CPA in their home country. The majority of these foreign investors invest passively as limited partners, but some prefer to buy the physical asset if they have the cash on hand.

“The US, from a commercial real estate point of view, creates the most yield. That is due to… the attractive debt options – that you have low interest rate debt on commercial assets, the non-recourse nature on which America’s lending system is based, and the huge population and GDP.” There are also many large primary, secondary, and tertiary markets.

Learn more about Reed and his work: https://www.reedgoossens.com/ and https://wildhorncap.com/