Foreign Investment Incentive In US Real Estate : S.1746 VISIT-USA Act
S. 1746: Visa Improvements to Stimulate International Tourism to the United States of America Act
Recently, the bipartisan team of Senators, Chuck Schumer (D-NY) and Mike Lee (R-UT) have proposed an interesting foreign investment incentive in their new immigration bill that is titled, “Increasing Home Ownership by Priority Visitors.”
“Priority Visitors” is a euphemism for wealthy individuals from foreign Countries. This Senate Bill would offer non-immigrant visas to foreigners who buy at least $500,000 worth of residential US real estate. The crux of the plan is that it will offer visas to individuals who purchase residential US real estate.
· Before Anti-Immigration proponents scream about lost American jobs, look at the fine print of the bill, and notice that these are not work visas.
The Bill should be re-titled: “United States Close-Out Sale: Wealthy Foreigner Vacation Home Assistance Program”
Jokes aside, I am all for Investor incentive programs that will help stabilize distressed neighborhoods and communities, and bring the Highest and Best use out of more properties. I just had to chuckle when I first heard about this legislation, because I thought to myself, isn’t there already a tremendous incentive to purchase US real estate:
1. US Real Estate Market is off 40% to 50% from peak in certain areas;
2. Interest rates are historically low;
3. Rental pool will continue to increase with decrease in American Home Ownership percentages (foreclosure/short sale/higher loan qualification standards/credit debacle/ lack of savings and down payments by US Buyers);
4. The US Dollar is weak;
5. Global and US Stock Markets are extremely volatile and lack transparency;
6. Banks are paying yields below inflation levels, and so holding cash in a bank is costing you money;
7. Foreign Cash Reserves are massive and growing.
SOUNDS LIKE A GREAT TIME TO INVEST IN US REAL ESTATE!
The US should offer incentives to all Investors including foreign and non-foreign born to help in the real estate market recovery, but the banks should also remember, when the market does in-fact recover, and equity positions change to the positive, do not offer vulnerable and falsely secured cash-out refi’s and HELOC’s to individuals with little or no skin in the deal. That position led to the biggest heist and fleecing of the American real estate market our Country has ever seen.
It would be interesting to have a data chart, table, or statistical report that showed properties owned in foreign countries that were paid for or paid off by Cash-Out Refi’s and HELOC’s that were originated between 2000 and 2006 on American soil.
I am all for directing incentives to individuals with work ethic, proven credit worthiness, and financial intelligence. I am also all for pro-active immigration policies that will bring good minds, capital, and diversity to our Country, because that is what makes our Country great.
What I am not for, is offering any foreign investor incentives to any individuals who have strategic foreclosures on American soil in their recent past.
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