If a foreigner has ownership of real estate in the United States, Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) will be applied. US Tax Treaty with Republic of Korea will be also applied if property owner's nationality is South Korea. Unlike Korea, both Internal Revenue Service (IRS) regulations and state property tax law (the state which property is located) will be applied. For instance, if Korean has ownership or leased a building or a plaza in state of California, the owner or the renter must pay taxes to the IRS and California State Government. If property is located in New Jersey, investor must follow the IRS regulations and New Jersey State Government property tax regulations. There are 8 states in the United States without property tax law such as Texas and Washington. US Tax Treaty with Republic of Korea restricts double taxation on Korean investors. Thus, Korean investors for American real estate properties will be allowed to pay single property tax in the United States for the lease profits and tax for the Korean government will be calculates.

Long as tax paid in Korea is less than the tax paid in the United States, there is no need to pay any more in taxes. U.S. property tax regulation applied to citizen is same as those applied for the foreign investors. If Korean national invests $2 million and make $70,000 profit, same Federal and State property tax law is applied as American citizen investing $2 million and making $70,000. U.S. tax system allows the investor to report depreciation as an expense to offset the profit, and usually there is no real tax applied on a profit from real estate property. However, foreign investors are subjected to tax withdrawal of 30% to the IRS.

This tax must be filed in annual income tax return to the IRS by October 15th of the year after (including 6 month extension). Actual tax paid and tax filed is compared: the difference is paid in tax return or paid to the government. Important thing to note is tax must be paid by the property manager. If property tax is not paid by the due date, property manger must pay the original tax, late fee and any accrued interest. This 30% tax withdrawal is for the IRS to hold in case lease profit from the foreign investor is unavailable to collect due to foreign expenditure. Also, profits from selling the property by foreign national are subjected to taxes. In this situation 10% property tax is applied on the price of the property sold and sometimes it is subjected to state property tax. However, like any American citizens, foreign property investors can defer or eliminate property tax using IRC Section 1031 Tax Deferred Exchange.

In U.S. there are number of tax breaks for real estate owners, mainly the IRC Section 1031 Tax Deferred Exchange. Internal Revenue Code (IRC) is the U.S. tax regulation, and 1031 defers tax if property owner sells a property and invest in a new property. If new property becomes an inheritance, tax may be exempt.

Inherited property or transferring ownership is subjected to different tax regulation. Most of rich property owners used 1031 Exchange Code to grow their wealth in the United States for a very long time.

Exchange requires:
(1) a search for a new real estate property to invest within 45 days,
(2) finish all the transaction process for the new property within 180 days, and
(3) must invest100% of the capital acquired from selling the previous property.

4 Main types of Mortgages

▷ 30 Year Fixed Mortgages

Borrower pays fixed payment for 30 years (360 month) which principal will be entirely paid off. Payment amount is fixed for each month, although amount of principal and interest paid every month is calculated differently: payment will cover mostly on interest in the early stage and decrease while payment on principal will gradually increase as time goes by.
Interest rate is fixed for the life of the loan even if interest rate in the market increases. This is the most simple and traditional type of mortgage. 30 years is a long duration for a bank to lend money, so bank uses higher interest rate to lower the risk involved in fulfilling the contract. 30 year mortgage maintains higher interest rates in order to maintain more stability.

▷Adjustable Rate Mortgage (ARM)

ARM, as name suggests, does not have fixed interest rates and interest rates adjusts to the market. ARM consists of margin and index: margin does not change during the life of mortgage loan while index adjusts accordingly to the market. Margin is usually 2-4%. Index involves number of factors such as LIBOR, MTA, COFI, Prime Rate, and etc.
Currently hybrid form of fixed and adjustable interest rate is popular in the market known as Hybrid ARM: interest rate is fixed for certain duration and remains adjustable for the rest of the term which utilizes advantage of fixed and adjustable rates to create stability and relatively low interest rates. Life of Hybrid ARM Mortgage is typically 30 years. In the early stage of the loan, interest rate is fixed for duration depending on the borrower's situation, and then interest rate is adjustable for the remaining life which bank is only responsible for far less than 30 years allowing this option to become more affordable. Hybrid ARM mortgage can be divided into 2: interest only which only interest is paid off in the fixed interest stage, and full amortization which pays off partial principal and interest for the fixed interest stage.

▷ 7 Years Fixed Hybrid ARM
Interest rate is fixed for first 7 years. Remaining 23 years is subjected to adjustable interest rates.

▷ 7 Years Interest Only Mortgage
Early fixed 7 years is similar to aforementioned Hybrid ARM, but only interest is paid off in 7 years and principal remains unpaid. Due to secure interest payment, monthly obligation is comparatively lower. After fixed duration, only principal is paid off for next 23 years. This is the most preferred Hybrid ARM among others. Reasons are following:
1. Income will be higher in 7 years which allows easier payment for the mortgage,
2. Price for the property will be much higher in 7 years which principal to property ration will decrease,
3. Paying of same amount of installments will be relatively less burden due to inflation,
4. Principal can be paid off during the fixed 7 year period if additional payments are made in separate
check with principal payment marked on the check, and
5. Interest rate is lowered due to lower remaining principal.

30 year fixed mortgage and 7 year fixed hybrid ARM does not lower principal even if borrower makes extra payments. However, duration is shortened as a result.

Most suitable investment tool for Korean private business owner is the 7 years interest only mortgage. It is best to have a good understanding of types and characteristics of different mortgages, yet due to busy life style most investors only have little knowledge of it and leave it the mortgage broker. Therefore, it is best to have reliable mortgage broker working on investors behalf with good insight of investor's situation.

▷ Cap Rate
Cap rate is a ratio of annual profit divided by property cost which measures the quality of the property. It is important value to consider, but it should not be the only factor to consider. Property around stable business area (nice neighborhood) has relatively low cap rate compare to dangerous and unstable neighbor. Area with unstable business properties has high cap rate. Therefore, cap rate is inverse measuring tool to compare a value of a property. Low cap rate means market value is higher. This indicates price is in favor of the seller. On the other hand, low cap rate means property is cheaper, indicating price is in favor of the buyer. This is the reason price of the property in a good neighborhood is pricier, yet it is worth the investment. Vice versa, property located in a bad area is cheaper, yet it will be more difficult to establish a business in this area.

▷Find out the reason for selling the property.

▷Appraisal
Appraisal is a must when purchasing a real estate. To receive a loan from a bank, appraise to assess the risk bank is taking for financing, contamination evaluation, survey the land and find out any disclosures, title search to see if seller has the right to property, and property inspection to evaluate the condition of the property. Even if investment is done by cash without any bank financing, appraisal is a must. Professional realtor with extensive experience will educate and recommend investors of the appraisal step at the same time assist and take responsibility during the process of a transaction, while some realtors fail to fully perform their duties. Therefore, it is crucial to research and find the right realtor to assist in a purchase.

▷Importance of a Realtor's Responsibilities.
Unlike business transactions, commercial real estate agents are mostly Americans. It is easy to run into a wall due to low fluency level. Communication barrier is a common cause for incomplete transactions. It is very difficult to hire a real estate agent suitable for multi-million transaction with insufficient English level. Agent must be bilingual, honest, and well-experience in this matter. In other words, success and failure of property investment depends on selecting the right real estate agent.

▷Check Current Residents Business Types and Its Qualities
Check if current residents business is necessary for the neighbor, if their business is doing well, if residents are consistently paying their rent.

▷Check if there is any road expansion plan
Check if road around the building is scheduled for any improvement or expansion plan, find out how long the construction will be, research and assess the effect this construction will have on your residents. This is difficult for even for experience realtors to find out.

U.S. Federal Government passed the Taxpayer Relief Act in May of 1997. The law provides a universal exclusion that should benefit most, but not all, homeowners. Under the new law, tax exclusion for gain of up to $250,000 is available to individuals. Married couples filing a joint return can claim a tax exclusion of as much as $500,000. To qualify for the exclusion, you must use the property as your principal residence for a total of two years, not necessarily consecutive, out of the five years preceding the sale. Only one sale or exchange every two years is permitted, but sales prior to May 7, 1997, do not count. For instance, individual seller buys a property, lives on the property for a year; lease it for the following 3 years, and return to live the following year. Since the seller lived on the property for 2 years, the seller qualifies for the exemption. Let's assume the property was $250,000 during the time of purchase and became $500,000 in five years. Even though the property has increased its value by $250,000, seller does not have to pay a cent in taxes. This provision is allows exclusion without an age limit or number of usages. Theoretically, person may buy and sell a property every 2 years for an entire life with profits in every transaction with paying any taxes. Before this act, person with age of 55 and up was allowed for one exemption with limit of $125,000 in profit for life. There is no need to worry if investor is planning to live 2 years on the property, but tax must be paid if duration of residency is less than 2 years. Two taxes will be applied if seller stays less than 2 years on the property. First, State Estate Tax applicable from January 1st of 2003. Tax is 3.33% paid to the state government in prior to buying the property through an escrow if property is sold before 2 year period. For example, Young Kim-Commercial, Residential, Property Investment & Management sold at $600,000 will require $20,000 tax which should be filed with State Government the following year. State Capital Gain Tax maximum is 9.6% depending on the profit margin. If property was bought for $500,000 and sold for $600,000 with cost of $30,000, profit is calculated as $70,000. 9.6% from $70,000 is $6,720. If $20,000 was paid in prior, tax return of $13,280 will be made.

Second is the Federal Capital Gain Tax. This tax is not paid in prior, but it will be filed by the following year: 10% if property is sold in between a year or two, 15% if property is sold within a year. Using previous example, if residency is less than a year with profit of %70,000, $10,500(15%) tax must be paid; and $7,000(10%) must be paid if residency is between a year and two. Overall, if residency is less than a year, seller must pay total of $17,220 in tax for $70,000 profit. It is strongly recommended to consult with an accountant over tax matter.

Escrow is an arrangement made under contractual provisions between transacting parties, whereby an independent trusted third party receives and disburses money or documents for the transacting parties, with the timing of such disbursement by the third party dependent on the fulfillment of contractually agreed conditions by the transacting parties. Use of escrow enables secure transactions between the two parties: seller receives secure payment, and buyer receives secure transfer of ownership.

▷ Transaction can be fulfilled only by an escrow!
Agreement can be made when buyer accepts sellers offer. This is known as closing the transaction. It has nothing to do with an escrow. Escrow is only an option.

▷ Supplemental tax is paid by the seller?
Supplemental tax must be paid by a buyer. For example, seller pays tax for buying $400,000 Young Kim-Commercial, Residential, Property Investment & Management, and if this Young Kim-Commercial, Residential, Property Investment & Management is sold for $600,000 the new buyer must pay the tax according to the new price of the Young Kim-Commercial, Residential, Property Investment & Management.

▷ Home warranty plan is valid for life?
Seller provides 1 year worth of insurance. This is called home warranty plan. The insurance take effect the day ownership transfers to the new owner. This means any damage to the property prior to buying the Young Kim-Commercial, Residential, Property Investment & Management is not covered by the insurance.

▷ Opening an escrow allows entry for the buyer?
Technically, prospective investors are given allowance for two entries: inspection and final walk-thru inspection. There are a lot of buyers entering the property after opening an escrow like there Young Kim-Commercial, Residential, Property Investment & Management to measure the dimension of the property for renovation. However, new owner must get an approval from the seller through the broker only under unavoidable circumstances.

▷ Seller can take installed goods from the Young Kim-Commercial, Residential, Property Investment & Management?
Any installed goods on the Young Kim-Commercial, Residential, Property Investment & Management are in ownership of the buyer regardless of the price of the Young Kim-Commercial, Residential, Property Investment & Management. For instance of a chandelier, seller must get have a prior agreement before selling the Young Kim-Commercial, Residential, Property Investment & Management if seller wants to keep it, and all seller has to do is replace the chandelier with a cheaper one. It would be problematic if buyer bought the Young Kim-Commercial, Residential, Property Investment & Management because of the chandelier and seller does not give it up. This is most common reason for a lawsuit.

▷ Higher offer is the best?
It is normal for a seller wanting a higher price on the property. If multiple offers are available for the seller, seller will say "why not the better offer?" but this does not always mean better. Seller must overlook the duration and terms of the loan agreement. This is to avoid problems in the future. Investor should consult with a professional listing agent and make an informed decision.

▷ Auctioned property is always cheaper?
Not always. Brain cannot be bigger than the skull, and the price on the Young Kim-Commercial, Residential, Property Investment & Management cannot be higher than the original price for an auction. Often a buyer ends up buying the Young Kim-Commercial, Residential, Property Investment & Management for the original price due to high competition. This is truer for seller market.

▷ Young Kim-Commercial, Residential, Property Investment & Management facing south is better?
Koreans consider the direction of the property exposure. For Koreans, south is used as entrance for the Young Kim-Commercial, Residential, Property Investment & Management. In this case, backyard or family room ends up facing the north. Young Kim-Commercial, Residential, Property Investment & Management with entrance on the north has more natural light coming in through the Young Kim-Commercial, Residential, Property Investment & Management, cooler during the summer, and warmer in the winter. Americans do not consider any directions for their Young Kim-Commercial, Residential, Property Investment & Managements.

▷ There is no need to worry about financing if it is pre-approved.
Pre-qualification letter or pre-approval letter only indicates buyer is qualified for finance if loan process is completed. This does not mean there is any loan commitment.

Anybody fairly new to the real estate game often mixes up condominium, co-operative, and townYoung Kim-Commercial, Residential, Property Investment & Managements. Unlike detached Young Kim-Commercial, Residential, Property Investment & Managements, these types of property create confusion. Complex comprised of multi housings are called Common Interest Development (CID) which has number of common traits.

▷ Condominium:
Condominium (Condo) is an ownership of a unit in a complex. Owner and investor can sell and buy the property as they please as well as leasing the unit. Likely, the owner has to pay individual tax on the property. It is often confused as apartment in Korea, but this is lawful application on the ownership of the unit property. Unit can be in a skyscraper, townYoung Kim-Commercial, Residential, Property Investment & Management, luxury apartment, or a hotel. Palisade Park duplexes in New Jersey populated by Korean residents are main example of condos. Condos are maintained, operated, and regulated by Home owners Association (HOA). Lobby, pool, gym, walkway, office, party room, library, and etc are common elements shared by residents and maintenance fee is required: condo fee or HOA fee.

▷ Co-operative:
Co-operative (Co-op) does not give private ownership of the property. Co-op is owned by real-estate Company or an investment company. Company buys the capital and becomes the owner of the unit. Resident is not burden with any taxes. Leasing is prohibited for co-op and inspection process is more rigorous. Board can be formed to manage the property. Poor management funding by the board can lead to financial bankruptcy. Board can refuse to have an individual to become an executive owner. Due to strict screening process of employment, income, capital, and credit, many Koreans fail to obtain a residential approval. This is the reason co-op is unpopular among Koreans for it is difficult to buy and sell the property.

▷ TownYoung Kim-Commercial, Residential, Property Investment & Management
Any Young Kim-Commercial, Residential, Property Investment & Management sharing a wall with its neighbor is considered a townYoung Kim-Commercial, Residential, Property Investment & Management. Technically it can be a condo or a detached Young Kim-Commercial, Residential, Property Investment & Management. Commonly the structure is 2 floored with kitchen and living room on the first floor while all the rooms are located on the top floor. Condo and townYoung Kim-Commercial, Residential, Property Investment & Management with unit ownership is regulated by Covenants, Conditions, & Restrictions (CC&R): shape of driveway, paint color, curtain type, occupant limits and etc.

Traditionally, condo has lower investment value compare to detached Young Kim-Commercial, Residential, Property Investment & Managements until recent popularity of condos and dramatic increase value. It has been popular among newlyweds and retired couples for its convenience, privacy, and security. Especially Manhattan in New York has been populated with multi-million dollar condos and pentYoung Kim-Commercial, Residential, Property Investment & Management. Florida, New Jersey, and Las Vegas has been experiencing high volume increase in demand for condos

To start real estate investment, first thing to consider and research is the profit margin. How much profit can be made for certain amount of investment must be calculated. Investor must take into account of several factors: rent payments, maintenance fee, depreciation expense, taxes, insurance, and value change of the property. Most basic way is to calculate how much profit can be made with given capital investment in percentile.

First, rent profit must be calculated. Real estate broker will have rent roll available upon request which will list renters, rent amounts, and rental period. Prospective investors should check if all the residents are authorized personnel or not, and if there is any co-signers in the contract. Rental escalation must be checked. If there is no tenant or there is contracts expiring within a year, rental amounts can be collected through 3rd party broker to find proper rental amount. Collected information can be used to calculate vacancy ratio to find out more realistic projection of rental profit. Vacancy ratio varies on market conditions and type of real estate. Most reliable ratio is available in real estate sections on local newspapers.

Maintenance fee given by the seller or real estate brokers must be evaluated by the buyer upon purchase to see if see categories and amounts are appropriate. Property tax information must be overlooked. Insurance information should be researched thoroughly to check if fee is appropriate for its coverage and check if any special insurance has been denied. Young Kim-Commercial, Residential, Property Investment & Management or commercial building must consider utilities involved and check if all the payments are cleared, elevators and/or furnace must be working properly, any area in need of professional consulting must be maintained, and agreement and contracts information regarding listed things must be checked. If maintaining the property is difficult by investor, hiring a manager or professional management company can be an option. Hiring a manager has many advantages.

For short term investment, utilizing apartment for investment is enough. However for long investment with little capital, 4 unit or less unit apartment, detached Young Kim-Commercial, Residential, Property Investment & Management, townYoung Kim-Commercial, Residential, Property Investment & Management, and condos are recommended. Professional realtors demand thorough research to acquire information on different types of buildings and lands to make good investment. For example, if investor wants to invest in detached housing, few factors are fixed for 5-7 years such as mortgage payments and maintenance fee. Higher interest rate is applied for purchase on Young Kim-Commercial, Residential, Property Investment & Management for rental than condo or townYoung Kim-Commercial, Residential, Property Investment & Management. Unlike residential home, investment purpose property should have different standard during selection. Investor must purchase lowest priced Young Kim-Commercial, Residential, Property Investment & Management in area with good education system, safe neighborhood, and clean environment. Investor must utilize tax exemptions. Utilities, maintenance fee, mortgage and interest payment for investment properties qualifies for tax exemptions.

▷ Financing Cost
Financing cost only applies to the buyer. There is no financing cost for the seller since there is no need. Financing expenses are calculated in percentage, so more the loan, more the expense. Processing fee is applied by each agent. Credit report is relatively low, but it is categorized on its own.

▷ Escrow Expense
Escrow can be looked as basic and minimal expense. Korean Escrow Company ranges from $200-300. American escrow will typically charge $2-3 per $1,000 of Young Kim-Commercial, Residential, Property Investment & Management's price. Processing fee will be added to the buyers financing package. This will vary by companies.

▷ Title Insurance Fee
Title insurance fee varies depending on the price of the property and it varies depending on the broker. This fee is listed on the fee schedule.

▷ Miscellaneous Expense
In order to receive a loan, appraisal document is required. Appraisal cost depends on the size and type of the property. Buyer must keep in mind of the home inspection cost and proration. If seller already paid property taxes, buyer must pay for the seller's credit at the time of escrow closure. Fire protection insurance is also applied at the closure. Condos or townYoung Kim-Commercial, Residential, Property Investment & Management are tied to HOA, so buyer and seller should pay and receive according to the principle of proportional distribution at the end of the escrow. There is an additional cost of document delivery fee. In buyer's perspective, closing cost is about 3-6%. During time of real transaction, escrow will typically demand little more. If $10,000 is needed than escrow will ask for $11,000 cashier's check. This is to cover any shortage. In the end any excess funding will be refunded.

▷Commission :
During closure of real estate contract in the U.S., real estate commission must be made by the seller and it is 5-6% of the listing price.

▷ Property tax due date
Property tax will be collected twice a year: December 10th and April 10th of the following year. November 1st and February 1st can be seen as the due date but it will state December 10th and April 10th as the payment due date without occurring any fine.

▷ Water expense for Condo/TownYoung Kim-Commercial, Residential, Property Investment & Management
HOA will be formed when condo or townYoung Kim-Commercial, Residential, Property Investment & Management is built. Here they will decide complex maintenance fee and collect them accordingly. Residents will be paying monthly payment of water expense, insurance, pool and public maintenance fee. Home owner does not have to pay any water expense since it is included in the maintenance fee. Although there is some complex with individual meters for each unit, HOA usually pays for the water expense.

▷ Financing Cost
Financing cost is about 1% of the entire principal.

▷ Escrow
Escrow is place for preceding a real estate transaction. They are neutral 3rd party. Buyer's offer is sent to seller through escrow. If there are any changes to the procedure, escrow must contact seller and buyer for agreement and cooperation.

▷ Property Inspection
Property inspection takes place when escrow is opened. Inspector is chosen by buyer and buyer must pay for any incurring fees. Seller has nothing to do with home inspection.

▷ Title Insurance
Title insurance is insurance securing the ownership of the property. Unlike any other insurance, title insurance does not seek any future incidents. Title insurance overlooks the incidents prior to the new ownership such as unclear border issues between the neighbors or any document forgeries the buyer might have missed. Title insurance only occurs once without needing renew every year. Only time title insurance is renew is during a transaction to transfer the ownership of the property. Insurance is paid by the seller. If buyer is financing through a loan, buyer must pay for the title insurance on lender's behalf.

▷ Down Payment for Purchase of a New Property
There is no extra transaction closing cost other than down payment. Only payment to foresee is the financing cost and escrow title insurance fee.

▷ Zero-down Payment Deposit
100% loan is available long as appraisal is processed. Therefore, any deposit by the buyer can be used as closing cost.

▷ PMI
PMI (private mortgage insurance) is insurance demanded by the lender when down payment is less than 20% of the finance. This is to protect lender and is typically around 0.5% of the loan.

▷Things to do in Korea

-Wire transfer
Buyer must wire money from Korean banks to purchase real estates in the U.S. Buyer can choose any commercial banks which deal with all currencies. There are required documents for wiring. First, a buyer should provide identification. Secondly, a buyer should submit written pledge, real covenant, real estate appraisal, mortgage related documents (In case of a buyer take out large loan from local), and documents relating to credit and proof of tax payment. Also, to prevent any delinquent borrower siphons off money to abroad, a buyer should send their credit rating documents and pay any unpaid taxes in full to invest real estate internationally. Only an investor with a good credit score and tax record is able to invest in real estate internationally. Once a buyer submits the documents above, the buyer can remit any time. An investor should present confirmation of purchase agreement to the bank within three months after buying real estates in the U.S., then bank-related tasks ends.

▷▷Things to do in the U.S.

- Finding an agent
A buyer should find an agent that deals with real estate brokerages through relatives in the United States. However, it is not difficult to find an agent without acquaintances in the United States.

- Checking real estate
After choosing an agent, the following step is viewing real estate. It would be better that a buyer checks real estate, such as housings, apartments, or buildings with their own eyes rather than observing them through pictures, so that a buyer can have certainty in investment.

- Choosing lending institutions
Getting a loan is necessary unless a buyer buys real estate in cash. Korean visitors are able to get a loan in the U.S. Interest rate is applied almost the same as Korean visitors and people who lives in the U.S legally. Visitors will be asked to pay more down payment than local people, but there is no limited amount for commercial Loans. A buyer should have a valid visa, which is valid for five to ten years and issued from embassy of the United States in Korea before coming to the U.S to get a loan. E-2 visa is also allowed. It would be more effective if a buyer asks the same person who managed loan business in Korea to deal with the tasks for choosing lending institutions.

- Opening a bank account
Opening an account is necessary to get a loan in the U.S, and valid passport is needed to open an account. Investors who want to buy real estate in the U.S should have an American bank account, even though they do not get a loan. This is in a case of TIC (tenant in common) investment: investors get proceeds by check or through their accounts.

- Real Estate Management
Management is very important for real estate investment, because poor management devalues buildings. If investors stay in the U.S as visitors, then they can only stay for six months. Also if they have their own businesses in Korea, they cannot stay in the U.S for a long time to manage the buildings they purchased. If the purchased real estate is an apartment which has many units or commercial building, choosing a real estate management agent is recommended. Investors can ask the same agent that helped real estate purchasing, if they bought a Young Kim-Commercial, Residential, Property Investment & Management for renting or small building which has few units.

▷Qualifications and outlines

①A person who has E-2 visa must return to country of origin
②E-2 visa is for small investors, and it can be extended every year as long as the investor run a business.
③With E-2 visa, running business in the U.S is allowed and taking spouse and own children are possible, but the spouse and children cannot work in the U.S unless it is stipulated in visa that they can get jobs.
④A person with E-2 visa can access to the U.S freely.
⑤Both an individual and American company which belongs to head offices can invest. An investor should be an important manager, and he or she should obtain qualifications as a manager in the U.S.
⑥Must create a new business or invest enough funds to pre-existing business ($50,000)
⑦ Over $20,000 is enough investing amount in most of the successful cases, but less than $20,000 can be enough amount depending on area.
⑧ Possibility of success for obtaining E-2 visa depends on professional business plan, and investing amount should be reasonable to the investment company.
⑨ An investor should show active business, and enough ability, like English skills, for the business.
⑩ Hiring at least more than one American citizen or permanent resident is required.

▷Process procedure and process period
① Making a field survey and contraction: an investor visits the U.S and makes a contract with a business he/she want to run. It would be better, if the capital which is contracted to Escrow account is wired in advance.
② Appoint lawyers for immigration works and business tasks.
③ Make out a business plan and submit documents.
④ Getting permission within two weeks to two months: In this case, interviewing is not required except the case that there are questions. Therefore, E-2 visa can be processed within 3 month.

▷Required Documents

[Application Documents]
①Unexpired passport (must be valid more than 6 month during the time of applying), any other passport (if there is prior record of receiving a visa)
②DS-156 form / DS-157 form
③ DS-156Eform
④certified record of family history/certified record of social security number
⑤verification of employment or verification of past employment
⑥business license/financial statements(most recent 3 years)/verified record of tax payment
⑦income verification/income tax record
⑧job description and organization table
⑨verification of enrollment
⑩resume
⑪copy of cash balance and investment finance
⑫certified copy of real estate register
⑬verification of country departure and arrival
⑭receipt of Korea-U.S. bank and visa application service fee

[U.S. Business Documents]
①copy of certificate of incorporation
②copy of stockholder subscription agreement
③copy of share certificate
④copy of US internal revenue letter assigning employer identification No.
⑤copy of federal tax deposit coupon book
⑥business license
⑦bank statement/relationship agreement
⑧copy of lease agreement-commercial premises
⑨organization chart
⑩ vendor invoices, customer contracts, brochures
⑪ business plan
⑫ employment agreement, IRS form W-4's and Form I-9's for all employees

▷Proof of Investment
①copy of outgoing cable and foreign currency receipt from bank confirming transfer of funds
②copy of confirmation from US receiving bank funds receipt

EB-5 visa is granted for investors seeking for immigration while contributing to American economy by creating a business with minimum of 10 employees. Usual capital needed to receive this visa for immigration is minimum 1,000,000 U.S. dollars. After failure of immigration program initially launched in 1990, EB-5 Pilot program was introduced in 1993. Most distinguishable characteristic of EB-5 Pilot program is 10 employees does not have to be hired directly by the business. In other words, investor can create a job indirectly and receive permanent residency for increasing regional productivity. 2 year temporary residency is granted on approval of EB-5 visa petition with terms and conditions. This type of investment grants opportunity for investor's family members to acquire temporary residency. At the end of 2 years, investor and family members can petition to terminate conditions. If investor has satisfied all the terms and conditions, investor and family members may receive permanent residency.

- Limited Partnership

Any investors with little to no investment experience can utilize limited partnership. Limited partnership is operated by a member with more experience in the involved field. Profits are divided among partners.

HOA(Home Owners' Association makes the rules and regulations resident must comply with during their occupancy of the condo or a town Young Kim-Commercial, Residential, Property Investment & Management. Even though the rules are only applied within the property it can be more strict than a normal building regulations. Consequences of disobeying HOA rule can be severe such as getting a lien on the property. HOA makes number of regulations to manage and maintain the property.

Example:
▲visitor parking is limited to 24 hours.
▲resident must fill a HOA schedule form.
▲pet allowance is limited to 2 and weight must be under 20 pounds per pet.
▲vehicle parked in the wrong parking spot or unauthorized vehicles will be towed on the owner's expense.
▲patio area must be cleanly maintained and drying laundries in patio area is prohibited.

Not all HOA regulations are the same. HOA varies depending on complex features and residents preferences. Maintenance fee is also different in amount as much as HOA rules have its variations. 20-30 year old building maintenance fee averages around $200 while new complexes demand average maintenance fee of $500. Maintenance fee is decided by HOA. If HOA members feel maintenance fee is burdensome, they can lower the fee as they please which result in lower maintenance fee can compare to its neighboring complex. However, quality of building maintenance will decrease. Aging of the building will be accelerated if any necessary painting or construction is put-off. Small complex such as building with only 4 units will have weak HOA. It will be difficult to collect maintenance fee from 4 units and hire a management company to take care of the complex. In this case, one of the residents takes on the duty of the president and collects and pays any incurring gardening or insurance fee. This is the reason lender might have more rigorous loan approval process for 4 unit townYoung Kim-Commercial, Residential, Property Investment & Managements. Recently detached Young Kim-Commercial, Residential, Property Investment & Managements have HOA to maintain public pool and park.

TIC stands for Tenant-in-Common with multiple investors purchasing a large commercial building to receive profits in dividends: joint-venture form of investment. Collective investment is made and dividends are calculated in proportion of individual investment. In 2002, IRS passed a law to apply 1031 exchange on TIC. Unlike partnership, corporation, or LLC, TIC grants deed and title for each investor. This means investor has right to exercise ownership accordingly with proportion of the investment. Advantage of collective investment is capability of purchasing a large commercial building with lower capital, financing terms are beneficial for borrower, and maintenance is done by a maintenance companies.

▷ TIC Outline

- Investment items: Luxury apartment, shopping center, buildings, and high expense real-estate properties
- Investment Unit: Approximately $10 million ~ $100 million (Average of $20 million~$40 million)
- Investment amount: Minimum starting from $200,000 without a limit
- Dividend amount: Annual average 6~8% payments in installments
- Advantage of TIC: Professional management company will handle all the transactions, building management, and dividend installments. Provides title deed and title insurance to transfer inherited property. Average escrow closure is 10~15days. Secure low interest rates on the loan.