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A Practical Guide for Latin American Investors Buying U.S. Real Estate—And How an Attorney Helps Mitigate Risk

Why the U.S.—and Why Miami-Dade?

• Strong tenant and visitor demand (long-term leases and, where permitted, seasonal/short-term)
• A deep ecosystem of banks, property managers, contractors, and inspectors
• High liquidity compared to many regional markets
• A large Spanish-speaking community that eases cross-border transactions
•  

Set Your Investment Goal First

• Income focus: Steady cash flow from long-term tenants or a blend of seasonal rentals (only where allowed)
• Appreciation focus: Submarkets with infrastructure growth and constrained supply
• Hybrid: Balanced rent plus long-term value growth
• Personal use: A Miami pied-à-terre or vacation home that can also rent

Build a Small, Trusted Team

• Broker experienced in your specific submarket and product (condo vs. single-family vs. multifamily)
• Licensed inspector familiar with Florida-specific issues (humidity, roofs, impact windows, concrete restoration)
• Insurance broker who understands windstorm, flood, and association master policies
• Lender with a proven foreign national program (if financing)
• Accounting/tax professional for U.S. federal, state, and cross-border reporting
• Florida real estate attorney to structure, negotiate, and close with risk controls (details below)

Choosing the Right Ownership Approach

• Personal title: Simple but may be less efficient for privacy, liability separation, and succession
• U.S. LLC: Popular to separate business risk from personal assets and streamline operations
• Holding companies or trusts: Sometimes used for multi-asset portfolios or succession planning

Financing as a Foreign National

• Many lenders offer 60–70% LTV for foreign nationals; expect stricter documentation and reserves
• Condo loans scrutinize building reserves, litigation history, and owner-occupancy ratios
• Build extra time for international notarizations/apostilles and document translations

Property Due Diligence: What to Verify Every Time

• Title and liens: Clear ownership, recorded liens, and association balances
• Inspections: Structure, roof, HVAC, plumbing, electrical; in coastal areas, verify impact glass and flood risk
• HOA/condo associations: Budgets, reserves, special assessments, leasing rules, and litigation
• Insurance realities: Premiums in South Florida can be significant—obtain quotes, not estimates
• Rentability: Confirm city rules and HOA restrictions; verify licenses for short-term rentals if applicable
• Operating costs: Taxes, HOA dues, utilities, management, repairs, and realistic vacancy.

How a Florida Real Estate Attorney Helps You Mitigate Risk

1) Pre-Offer Strategy and Structure

• Ownership planning: Evaluate whether personal title, a Florida LLC, or another structure better separates liability, supports banking, and aligns with succession goals.
• Offer design: Select the right form contract and add tailored riders that protect you (clear inspection exit rights, financing outs, appraisal clauses, association approval timing, and document delivery deadlines).

2) Contract Negotiation With Targeted Protections

• Inspection contingency: Expand the scope and define “material defects” so you can cancel or renegotiate if reports reveal structural issues, moisture intrusion, or building system risks.
• Financing and appraisal outs: Calibrate deadlines and documentation so a delayed foreign-national underwriting does not automatically waive your rights.
• Association risk: Require timely delivery of condo/HOA documents, budgets, reserve schedules, pending assessments, and litigation disclosures—with the express right to cancel if they are unacceptable.
• Insurance and flood: Condition the deal on obtaining insurable coverage within defined premium limits; if quotes exceed caps, you retain the right to exit.
• Title and closing funds: Tighten wire-fraud procedures in the contract (dual verification, call-back protocols, no changes by email alone).

3) Deep-Dive Due Diligence

• Title and survey: Cure title defects, confirm easements, and verify that improvements sit within boundaries; require association estoppels showing all sums due.
• Condo/HOA health: Analyze reserves, minutes, engineering reports, and special assessments; spotlight cash calls or delayed repairs that could crush cash flow.
• Building-specific risk: For coastal or older buildings, request available engineering, concrete restoration, and roof reports; evaluate timelines, permitting, and potential unit owner obligations.
• Leaseability audit: Translate marketing promises into contract terms; verify minimum lease periods, annual lease caps, and any short-term rental bans or permitting hurdles.

4) Coordination With Tax and Cross-Border Issues

• Withholding and reporting touchpoints: Coordinate with your tax professional on items like buyer/seller withholding, ITIN needs, and year-end statements.
• Banking/KYC readiness: Ensure entity documents and authorizations match bank expectations to open accounts and close on time.

5) Closing-Table Controls

• Funds security: Implement multi-step wire verification and safe escrow practices to prevent cyber-fraud.
• Document accuracy: Confirm deeds, entity authorizations, and lender documents match the negotiated terms; no last-minute “gotchas.”
• Final walk-through leverage: Tie defect cure or seller credits to documented findings so issues don’t become your problem after funding.

6) Post-Closing Risk Management

• Compliance calendar: Track association renewals, local rental licenses, business tax receipts, and any periodic inspections.
• Contract templates and addenda: Provide compliant lease templates (long-term or seasonal) and disclosures aligned to local rules.
• Operating playbook: Clarify who can sign on behalf of the entity, vendor approval thresholds, and recordkeeping for clean audits and smooth resale.

Quick Risk Matrix: Common Pitfalls and Attorney Mitigations

• Special assessments surprise: Require timely delivery and review of budgets/minutes; add cancel/credit rights if assessments are adopted or increased before closing.
• Insurance shock: Make insurance a contingency with premium caps; obtain binding quotes during inspection period.
• Wire fraud: Contractual verification protocol; title office call-backs using known phone numbers; no wire instruction changes by email.
• Unrentable unit: Hard contingencies tied to written HOA/city confirmations of lease rules and licensing.
• Title defects: Cure requirements with seller obligations to resolve liens/judgments and deliver marketable title or allow termination with deposit return.
• Building litigation: Mandatory disclosure and the right to cancel or renegotiate if litigation materially affects insurability, lending, or reserves.

Attorney-Led Clauses That Often Matter (Examples)

• Inspection Period: “Sole and absolute discretion” cancellation rights within a defined window; automatic extension if third-party reports are delayed.
• Insurance Contingency: Buyer may cancel if wind/flood premiums exceed specified thresholds or coverage terms are unacceptable.
• Association Document Delivery: Seller must deliver full and current budgets, reserves, rules, minutes, and pending assessments within X days—or buyer can extend or cancel.
• Financing/Appraisal: If loan is denied despite good-faith efforts or appraisal comes in below price, buyer may cancel or renegotiate.
• Title Cure: Seller must cure identified title defects within Y days; otherwise, buyer may terminate with full deposit refund.
• Wire-Fraud Protocol: Funds released only after dual verification via pre-agreed phone numbers; no email-only changes to wire instructions.

Managing the Property From Abroad

• Professional management: Expect 8–12% of monthly rent for long-term leases; more for short-term management where allowed.
• Tenant screening and compliance: Use standardized applications and background checks; rely on local managers to comply with fair housing rules.
• Maintenance reserves: Florida climate demands HVAC service, pest control, and moisture prevention.
• Reporting: Monthly owner statements and year-end summaries matching your accountant’s requirements.

Cash Flow Modeling That Matches Reality

• Use rent comps from the last 3–6 months.
• Vacancy: 5–8% for long-term; higher for seasonal/short-term.
• Operating expenses: Insurance, taxes, HOA, management, landlord-paid utilities, routine maintenance.
• Capital expenditures: Roofs, windows, elevators (condos), and major systems over time.
• Financing costs: Rate, points, escrows, and reserves. Stress-test with higher insurance and interest rates to preserve returns.

Practical Compliance Notes for Foreign Buyers

• Bank/KYC: Passports, source-of-funds letters, and entity documents must align with bank requirements; build time for notarizations/apostilles.
• Cross-border wires: Confirm beneficiary details with the title company by phone using known numbers.
• Local registrations: Some municipalities require rental licenses, business tax receipts, or periodic safety inspections—calendar these.

Exit Strategy and Resale

• Hold vs. flip: Short holds are sensitive to transaction costs and market swings.
• Value-add: Cosmetic updates and impact windows can improve rentability and resale.
• Marketability: Parking, hurricane protections, HOA health, and “no special assessments” are persuasive selling points.
• Timing: Seasonality affects showings and pricing; monitor inventory and days on market.

Updated Quick Checklist (With Attorney Risk Mitigation)

• Define your investment goal and holding period
• Shortlist neighborhoods by rentability, HOA rules, reserves, and risk profile
• Engage a Florida real estate attorney before making an offer
• Obtain lender pre-review if financing as a foreign national
• Get binding insurance quotes and flood data during the inspection window
• Order thorough inspections; read the complete reports and negotiate repairs/credits
• Review HOA budgets, reserves, minutes, litigation, and pending/special assessments
• Confirm local rental rules and required licenses in writing
• Build a conservative pro forma; stress-test insurance and rates
• Implement wire-fraud safeguards with your attorney and title company
• Final walk-through: document any issues and tie them to credits or cures before funding

Final Thoughts