Foreign investors are often quoted a surcharge for living abroad, either openly or through lower leverage and higher fees. Passy Capital does not do that. A loan to a foreign-owned US LLC is priced like a loan to a US-owned one, because the underwriting looks at the same things: the property, the leverage, the plan and the borrower's track record. There is no foreign-national rate premium and no reduction in leverage for living outside the United States.
Rates by loan type
The lender fee is 1% to 2% of the loan, paid at closing, with no upfront fees. Ranges move with the market; your term sheet, back in 24 to 48 hours, carries the actual number for your deal.
| Loan | Typical rate | Structure | Term |
|---|---|---|---|
| Bridge | 8% to 12% | Interest-only | 12 months |
| Fix and flip | 8% to 12% | Interest-only | 12 months |
| Renovation | 8% to 12% | Interest-only | 12 to 18 months |
| Ground-up construction | 8% to 12% | Interest-only on the drawn balance | 12 to 24 months |
| DSCR (rental) | From 6% to 6.5% | 30-year fixed available | 30 years |
What moves the rate inside the range
- Leverage: a loan at 65% of value prices better than one at the maximum
- Experience: completed flips or builds of similar size lower the risk the lender sees
- The exit: a resale or refinance that clearly works at today's numbers
- The property and market: liquid 1-4 unit and small multifamily assets in active markets
- For DSCR loans, the ratio of rent to debt service; see DSCR loan qualification
What interest-only means for your monthly cost
On a short-term loan you pay interest only and repay the principal when you sell or refinance. A $2,000,000 bridge loan at 10% costs $200,000 a year, about $16,667 a month. On construction and renovation loans interest is charged on the amount drawn, so the payment starts small and grows as the work is funded.
A DSCR loan is the long hold: 30-year fixed, sized on the rent. It is the usual exit from a bridge or a renovation once the property is let; see refinancing a bridge loan into DSCR.
How to compare offers as a foreign investor
A low headline rate can hide a higher total cost. Compare the rate, the fee, the leverage and the time to close on the same deal. A lender that charges less but lends 60% instead of 80% asks you for twice the equity on a rental. A lender that takes six weeks may cost you the property.
Ask, in writing, whether the quote would be the same for a US borrower on the same file. Through Passy Capital the answer is yes; the foreign national loans page sets out the structure.
Why there is no foreign-national premium
The loan is made to your US LLC and secured by the investment property. The lender can value the property, inspect the work, and enforce against the asset in a US court whatever the owner's nationality. What a premium usually prices is the lender's own discomfort with a file it cannot read: no US credit score, foreign bank statements, documents in another language. A lender set up for foreign investors reads that file routinely, so the cost does not appear.
Rate and fee together on a short hold
On a short-term loan the fee matters as much as the rate, because it is paid once on a loan that may only run a few months. On a $1,800,000 flip loan, a 1.5% fee is $27,000. If you sell after nine months, that fee is spread over nine months of interest, not twelve. When comparing two offers, add the fee to the interest you expect to pay over your real holding period, and compare the totals.