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How it works

Buying process

Buying Process

The typical buying process and timeline is set out below

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Reservation

A property is reserved by putting down a US$2,500 reservation deposit (which is deducted from the purchase price) and by signing our internal reservation agreement.

Purchase agreement

Once the reservation stage is completed, we shall request the seller’s purchase offer contract, which you will need to sign to make your offer formal and allow us to arrange inspection.

Inspection – Day 1

Once the seller has signed their acceptance of your offer, (if applicable) a full property inspection will be arranged for your approval prior to you committing to purchase. Should you decline the property on inspection, then your reservation will be transferred to an alternative property of your choice.

Title searches – Day 7-10

The appointed title company will search the property history to ensure that there are no debts or encumbrances and that you can close on the property with full clear title and title insurance where requested.

Closing – Day 10-14

At closing you will be given all necessary closing documents for your review, including a full financial breakdown, seller’s documents and transfer affidavit. You will be required to sign using electronic signature to complete the purchase.

Closing documents – Day 12-20

PCG Invest will forward your closing documents, including warranty deed in your name as your proof of ownership.

Completion – Day 14-30

If your property has tenants or new tenants are to be placed, we shall hand you over to your appointed management company who shall look after your tenants and your property.

Property Inspection

Property inspection

A home inspection is essential to ensure that you approve the condition of the property before you commit to buy it. Sellers often only allow an internal inspection once a buyer makes a formal written offer to buy the property, subject to its condition. Although not compulsory, once a property is reserved we recommend that you have a home inspection to determine the overall condition. We can help you to find a suitable inspector or you can choose your own.

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What is a home inspection?

A home inspection is a limited, non-invasive examination of the condition of a home, often in connection with the sale of that home. Home inspections are usually conducted by a home inspector, who has the training and certifications to perform such inspections. The inspector prepares and delivers to the client a written report of their findings. The client then uses the knowledge gained to make an informed decision about the purchase. The home inspector describes the condition of the home at the time of inspection but does not guarantee its future condition, efficiency, or the life expectancy of systems or components.

Although not all states or municipalities in the U.S. regulate home inspectors, there are some professional associations for home inspectors that provide education and training. A professional home inspection is an examination of the current condition of a property. It is not an inspection to verify compliance with appropriate codes such as Section 8, which is a separate inspection and needs to be conducted by an appointed regulated body.

What will the inspection look for?

To make sure your property is safe for you to purchase inspections. This will include a check of all the major components including:

✓ External building

✓ Internal rooms

✓ Basement

✓ Signs of damp or infestations

✓ Living conditions

✓ Structure

Legal preparation

Legal preparation

Getting you legally prepared is an important step of the process. In this section you’ll learn about the procedures and companies involved when you invest in overseas property.

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Protecting you with an LLC

An LLC, is a Limited Liability Company. We recommend that you establish an LLC to purchase your property and that the LLC shall hold the title of the property rather than in your personal name.

We recommend this as it protects your personal liability with regard to your property. This is particularly important where a foreign investor owns more than one property in the US. Should there be any litigation, a tenant may hire a US lawyer to sue the title holder of the property and if this liability is not limited (by owning through an LLC) they may be able to seek compensation not only from the property in question but any other properties owned by the same owner – even ones outside the US. Due to this, we always recommend using an LLC to hold the title of your property. It can also offer tax benefits to overseas investors.

Deposits and sending funds – how safe is my money?

A deposit is required once you have selected a property to reserve. This deposit is not paid to the seller until the property inspection has been approved by you and you have confirmed that you are ready to proceed to completion.

Before completion, you will receive a HUD statement. This is an itemised statement for both the buyer and seller detailing the funds required for your purchase. You will approve and sign this document before sending the final funds for closing.

The final funds will not be sent direct to the seller. You will be given the escrow account details of the title company and will be required to send the final amount to them. An escrow is a third party account. The title company will disburse these funds as per the HUD statement at completion.

Title companies

A title company is there to oversee completion of the property purchase and will conduct the searches on a property. They will check to make sure there are no debts or any outstanding title issues to resolve. The title company will perform extensive searches to check there are no mortgages, judgements or unpaid property taxes. Their job is to ensure that the property purchase is legitimate and that the buyer becomes the rightful owner of the property and title.

The title company will also issue title insurance on the property, if applicable. Title insurance protects the buyer against any claims against the property that result from disputes over the title.

Title companies mostly have an escrow account. You will transfer the final funds to complete to the title company’s escrow. Using this method ensures that the funds are used only for settlement and closing costs. After the closing has taken place the title company will ensure that the new title, deeds and other documents are filed with the appropriate entities.

Property Management

Managing your property

When you’re nearing completion of your purchase, it’s time to introduce you to your management company. They’ll need you to sign a few documents before they can take over and begin their services.

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It will be their job to take care of your property, look after your tenants and collect your rent, which will be paid to you every month.

Once they have received the paperwork, they’ll make sure new locks and keys are fitted and if your property is not already rented they’ll begin a marketing campaign to place a tenant. On average, this takes just three weeks.

You’ll get your own property manager and access to an online portal so you can receive instant updates and track any incoming or outgoing financials related to your investment.

After Care

Aftercare

We continue to provide you with a professional service after completion of your property investment. Once you’ve completed we are still here to look after you as part of our original promise to help you invest safely and securely. Not only that but more than 60% of our business is repeat and referral. Ensuring that you are looked after is what we promise and is essential to the success of both you and us.

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Our UK offices are at your service during normal office hours and our ground staff in the US are also on hand to provide help and information when you need it. Many investors decide that they need additional services from us once their initial investment is completed,. We offer the following services post sale that you may wish to consider.

What else can we help with?

We’ll cover everything for you as part of our services including

✓ LLC company formation

✓ US bank account set up

✓ US account filing/attorney

✓ Premium management services

✓ Resale services

✓ Property contractor quotations

FAQ's

FAQs

How do you choose investment properties?

Our exclusive listings are checked by our on ground licensed real estate brokers who give them a clean bill of health. We then get copies of the current lease agreement and rent payment histories to ensure regular payments are being made. Our due diligence is stringent and we ask that the management companies looking after these properties provide a rental guarantee and maintenance warranty to demonstrate their confidence in their services and their commitment to providing our clients with only safe and performing properties. If a property doesn’t pass this criteria, we don’t list it and that is that.

Why are the property prices so low?

When the sub prime lending market issued mortgages to many who couldn’t afford them, the banks were left with many thousands of repossesed homes that they needed to sell at sometimes 10c in the $1. This created a situation where those losing their homes still needed to rent but only cash buyers could get into the market. This pushed prices down further. Now we are seeing signs of recovery as prices start to rise and mortgages may be available again soon. So, this is a limited time opportunity so get in now, but do it safely with PCG Invest.

Is the $2,500 reservation deposit fully refundable?

Yes it is. We ask for a $2,500 reservation deposit as proof to the seller that we are holding a financial commitment so that they will agree to remove the property from the market. This is held by PCG Invest for the very reason that it can be refunded in full should you cancel. It can also be transferred to another property. It is used against the property price at completion.

What is a section 8 property?

A section 8 property means someone on Housing Benefit currently rents it. In the US this would be called ‘a property with a section 8 tenant’. The benefit of this is that you have a guarantee that the rent is being paid by the section 8 department in the US.

At which point do I pay the full purchase price?

You will pay the full purchase price at closing and closing happens ONLY once you have approved the property inspection, lease agreement and rent roll, if applicable. At closing we will send the HUD for you to sign, which are the closing documents. Once done, we will ask you to transfer the full amount due to the title company.

What is an LLC?

An LLC stands for a Limited Liability Company. An LLC is not a corporation; it is a legal form of company that provides limited liability to its owners throughout America.

Why do you recommend I buy property through an LLC?

In the US there is a great deal of ill-founded litigation, encouraged by the contingent fee practice, whereby lawyers can take on a case in return for something between 35% and 50% of the damages recovered.

What is an addendum?

An addendum is generally a one-page document that would need to be signed by both the seller and the buyer when something minor is to be edited, instead of changing the whole previous document.

What is an EMD and why is it necessary?

An EMD stands for an Ernest Money Deposit and is paid after an inspection is approved and will be taken off the purchase price at completion.

How long do tenants stay in a property on average?

On average a tenant will stay in a property for around three years.

Can you assist in opening a business or personal bank account in the US?

We can set up a bank account for you in the US. Please contact us. There will be a cost plus you will need to provide a $1,000 deposit.

What happens if the tenants move out? Who finds new tenants?

If your tenants decide to move out, your professional management company will find new tenants for your property and then collect the rent etc. as normal.

Do you offer the opportunity to sell my property if I decide to?

If you would like to sell your property we can assist you in doing this by organising agents and title companies etc.

Do you offer property management?

Yes, once you have completed on your property we will hand you over to your professional management who will collect and pay your rent as well as arrange maintenance etc.

At which point do I get introduced to the management company?

On completion, you will be introduced to your professional management company.