- Category: Entrepreneurs Stories
Owning an overseas property has been made easier thanks to one-of-a-kind Melbourne lending firm Loans USA.
The Sandringham-based company was founded by entrepreneur Stephen McClatchie in 2010, supplementing multi-property investment lending firm Loans Australia.
Loans USA provides finance options for purchasing American properties, which are now increasingly affordable after a dramatic drop in the US market.
A former mortgage broker, McClatchie said he was frustrated by the Australian market’s limited options, which inspired him to look at property investments on another continent.
“Loans USA was created in 2010 after I decided to try and diversify my own investments,” he said.
“I’d bought a lot of negatively geared properties, which means you’re losing money through them – if you have a lot of them, you’re losing a lot of money, so you have to pay a lot of money out before you can break even.
“I wanted to try and even out my negative gearing and buy something positive. After having a look at the mining sector and rural property, I decided that I didn’t like either and looked at the US market instead, because there was a bit of talk about it at the time.
“I started by researching the US and saw there were lots of opportunities there. The figures looked good, and I didn’t know what could go wrong.”
After initial hiccups in the first 18 months, McClatchie purchased an American property through a buyer’s advocate in Melbourne in early 2010.
He soon learnt that securing a loan from US banks was close to impossible and set out on sourcing a solution for future buyers in his situation.
“When I wanted to finance the property, (the advocate) told me that banks in the US aren’t lending, even though my property was only a cheap one worth about $31,000,” McClatchie said.
“I started researching the market to understand how their system works and went back to my background to speak to a few mortgage brokers.
“Soon, I learnt that I had to find a lender who doesn’t deal with Fannie Mae or Freddie Mac, as most banks over there don’t use mortgage brokers any more. Now, Loans USA has about 30 or 40 lenders we can use.”
Having grown to include four organisations, McClatchie’s stablemate of companies has now expanded to take property buyers through the entire process from start to finish.
As interest in the US market increased, he founded American Property Partners to source sustainable properties for interested
“We’ve never advertised Loans USA but people started to go on forums, found out about us, and asked if we could finance their clients,” he said.
“The sorts of properties they were looking to buy they weren’t financeable, which is a problem as there’s no exit strategy and you don’t know the true value of the place.
“American Property Partners was started earlier this year and sources properties in specific areas which are financeable – we only present properties that we can get a loan against.”
Completing the end-to-end service is McClatchie’s first American-founded company, International Portfolio Group, which opens bank accounts and provides an accountant and attorney for new property owners.
In addition to that, International Portfolio Group has located an attorney who can provide nationwide wills and estate planning for Australian clients, and also just had its first US based credit card approved for a foreigner, which helps build a US credit score.
Completely sourced in America, the in-house process cuts costs by half and streamlines the process for clients.
“It is really important to work quickly because you have to settle a property no later than 30 days in America, which is difficult when paperwork is flying all around the world,” he said.
“Having everything sorted in America certainly gives us a worldwide capability with this service. Generally, you have to be in the US in person to set up a bank account, but we’ve got some very good relationships with the banks so a client doesn’t have to be there in person.
“It’s not just property, there’s massive potential for people who want to set up bank accounts and companies in the US.”
With years of experience under its belt, the Loans USA team sets itself apart from competitors through its risk management record and has also undergone the rigorous procedure of becoming a credit representative of QED Credit Services P/L , ACL number 387856. Loans USA P/L Credit Representative number is 405460. Loans USA also has its own professional indemnity insurance, placing the company in a unique position.
McClatchie believes the company has no serious competitors, saying that his imitators were or low calibre.
“One of our frustrations is the number of companies in Australia which are dispersing a lot of incorrect information,” he said.
“Loans USA basically has almost no competition in that sense – there are a few around, but most of them are one-man shows and are pretty crude.
“We also put together a risk matrix for people so they know the sort of risk that they’re buying into.”
If you are interested in updates from Loans USA, visit http://loansusa.com.au/