In our successful meeting with Rochester Mayor Robert Duffy and Bret Garwood, Director of Business & Housing Development, a number of thoughts and concerns were raised with regard to the challenges that foreign national investors face when investing in the USA.
Among the bigger issues was the question of Financial Leverage and how foreign national investors can access lending at reasonable rates and terms.
As every Real Estate Investor knows, your ability to grow a significant portfolio is heavily impacted by your ability to use financial leverage to own or control high-value assets with only a portion of the value invested from your own funds (if any at all). Without financial leverage, you can still develop a very high ROI portfolio, but it will be limited in growth the amount of capital you have to invest at a rate of 1:1, plus your ability to generate new capital and re-invest your returns.
When Matt Scherb expressed his concerns to the Mayor that several of his associated foreign national investors have invested millions of (unleveraged) dollars and closed well over 100 property deals in the past 2 years, and it could have been 4 times more, the Mayor immediately recognized the power of foreign national investors in helping to rejuvenate and improve Rochester.
In response to Matt’s concerns, Mayor Duffy suggested that there may be several options to discuss, and that he was keenly interested in exploring the matter further and providing whatever assistance was within his power to deliver. He requested a letter from Matt to propose the opening and furthering of discussions on the topic of helping foreign nationals achieve financial leverage in Rochester. (Matt has since informed me that he has drafted and set a letter off to Mr. Garwood in Rochester City Hall as requested by the Mayor.)
Is the door opening for finance in Rochester for foreign national investors? Possibly. It’s still early days, and it’s likely to be a long road, so we will keep you up to date right here on this blog as we progress.
If / when that door opens, it will provide a huge leap forward for those who are already investing and have their systems and properties in-hand and producing an ROI that can be demonstrated to the lenders. My prediction for how this will affect the Rochester cashflow rental marketplace is that deals will be far more accessible in terms of initial investment required, and in far greater demand because of that. The supply of deals will possibly dwindle as a result, and we may see the prices start to rise.
Regardless of finance or not, I believe that now is the time to secure high cashflow property while prices and cashflow levels are reasonable… let the potential for future financing to be a bonus on top of an already outstanding deal.
In the meantime, now is your chance to secure high-ROI rental properties before the possible shortage and higher prices as the stock becomes more “accessible” to those who’ve positioned themselves to ride the wave in advance of it arriving. I’m personally looking forward to the chance to triple, quadruple, or maybe even quintuple my portfolio in a very short time should we achieve some sort of finance deal with the Mayor’s or City Hall’s assistance.