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Buying House on Student / H1B VISA? Home Tour worth $200k!! Real Estate Business - YouTube
Channel: Singh in USA
[9]
It's amazing bro. In this road
it feels like we are in India!
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because we are driving on the left side
and on the right side, cars are coming.
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That is so cool!
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This is so cool bro!
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- This happens only in this road, right?
- Yes. It does... only for some time.
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Yep...
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After this, we will go back
to the right lane
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then we will feel like
we are back in the US!
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I mean, the road system.
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So anyways, today we are
going to visit one of our friend's house.
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Finally reached
one of our friend's house.
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Many people were asking
that if you want to buy a house in the US,
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because right now, the housing
market is on a boom!
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The prices are more
but the interest rates are pretty low.
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The interest rates nowadays
are 2-3 percent
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so if you take advantage of this
and buy a house
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at low interest and
convert this to a business.
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Let's say you have bought
a 2 floored house,
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One floor for yourself
and you give the other one on rent,
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through the rent, you
can pay the mortgage.
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(mortgage is basically
the loan payment)
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So won't you be creating
business with this?
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Won't you be creating AirBnb or
rental income by this?
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And that also on student visa
or H1B visa.
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We will get all those questions
answered by my friend. Let's go!
[92]
So let's start with the tour.
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First of all,
can you please introduce yourself?
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Hi guys, my name
is Prashank.
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And I am here since 2014.
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I came here to do my Masters
in the University of Florida.
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I am in Atlanta
since 2016.
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This is my house.
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I am a mechanical engineer.
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So, welcome into
my house.
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Oh! Thank you!
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So, by the way, you are
currently on H1B visa, right?
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- Yep.
- Okay. Awesome!
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So... Starting with the tour...
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Like... you can start from
anywhere you like.
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Basically that was the entrance.
And you enter this way.
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There is the kitchen here.
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These are my appliances
as you guys can see.
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Refrigerator...
And then...
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So, when you buy a house, is the
washer, dryer and the fridge included?
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- Yeah washer- What are the complementary
things you get when you buy a house?
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The stove, microwave, dishwasher
are included in complementary.
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Fridge may or may not
be included.
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- It's not always included.
- Okay.
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If you wanna sell,
then is it up to you
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to include the fridge or not?
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Yeah it's upto me.
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I can choose whether to
include the fridge or not.
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And in that way, I can manage
the prices of the house.
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Awesome! Okay,
so let's move on.
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Yeah, so basically guys,
this is my living room.
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There's TV here...
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Nice...
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Then this is the dining area.
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That's my bar and there's
a bit of music section there.
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And if you come back,
here is the backyard.
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Nice!
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- Hi Arpit!
- Hi!
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Come.
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It's going to rain.
The weather is great!
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Yep. It's been raining today...
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So doesn't this become noisy?
You have a highway in front of you!
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The houses here have one more good thing
that the insulation and isolation in great!
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So during winters, even if
it's 0 degree outside,
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the temperature is maintained
inside.
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Awesome!
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- We just saw a rabbit and snake here.
- Seriously!!
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Yeah.
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You will see rabbits here.
I have also seen snakes a couple times..
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Oh my God!
Weren't you afraid?
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What's there to be
afraid of?
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There were so many
snakes in the MSET hostel!
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Coincidentally, both
are from NIT Bhopal!
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- Yeah we both-
- It's not a coincidence..
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- We are college friends!
- Yep. We are college friends!
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The coincidence is that
we both met on Atlanta.
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Yeah! Exactly.
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- We missed the garage.
- So guys, yeah, we forgot one thing.
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We are gonna show the
garage as well.
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The garage is included in some houses
and in some it is not.
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So, this is my garage and
this is my car.
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And I bike as well.
So this is my bike.
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Nice! I do that as well!
How much did you pay for this?
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I took it for 500 dollars.
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- Nice! I took one for 150.
- This is a mountain bike.
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It's a mountain bike...
so it's different as I go for trail biking
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These are a bit expensive.
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Okay. Let's go upstairs.
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So all the bedrooms
are upstairs, right?
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My house setup is kinda...
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below, there's the living room,
dining and the patio.
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And for the bedrooms and stuff
you need to go upstairs.
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So this is the bathroom I guess.
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One bathroom...
This is like half bathroom, right?
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This is the half bathroom.
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It's not for bathing.
This is just your toilet.
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- Okay. Let me just show it.
- Yeah.
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Yeah. Half Bathroom.
Okay.
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And then, all the bedrooms
upstairs.
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So this is a three
bedroom house.
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- Ahan.
- Three bedroom two and a half...
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There are three bedrooms upstairs.
This is my master bedroom.
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So as you guys can see...
My bed, my TV over here, my dresser
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I think it's a 40..45 inch TV?
- 43. - 43? Awesome.
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- So this is king sized bed right?
- This is a Queen.
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- Queen size?
- Hmm.
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I get lots of confusion.
Do you know all the bed types?
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So basically there are twin, full
and then Queen and King.
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So there are
four types of beds.
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- This is the Queen bed.
- Awesome!
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I have a Queen as well.
I think.
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So this is like attached bathroom?
No.
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- No this is my closet.
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The closet is there and
the attached bathroom is here.
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Okay.
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I have tub and Jacuzzi.
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And what about the pricing?
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What was the price when you
bought the house?
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And what was the price
during selling?
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The price was around 170-180
when I bought the house.
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It's 3 years old.
I bought it in 2018.
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The prices have now jumped
to 30% more.
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Just because the housing market
has been very strong.
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So the prices have hiked up!
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This is my second bedroom.
This is sort of a guest bedroom.
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It can occupy
a complete bed.
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This is also Queen.
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By the way, this bed is going to be mine.
We just bought it from him.
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Maybe he had bought it for 300-400 dollars?
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But we got it for 200 dollars.
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- Thank you so much!
- Yep! No worries.
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- This, I think is the closet.
- It's an additional closet.
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So basically this is another bedroom
with its own closet.
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Got it!
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Another third bedroom which I
have made my office basically.
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So I work out of here.
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So there's another closet
over here.
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It's the same yet another bedroom.
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- So you can keep a twin sized bed here?
- You can fit in a Queen here..
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because its size is the same as
the previous bedroom.
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Ohh! The size is the same!
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And there must be common bathroom
which is full.
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This is common bathroom which is
a full-fledged bathroom.
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Awesome!
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And that's it guys.
So this is my home sweet home.
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Yeah. It is beautiful.
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So let's sit together and then
we can talk about
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how you bought it and what about
the profit. - Sure
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So finally, the first question
I want to ask you is...
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If you consider it as a business,
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then how much profit
you make generally
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after 5 years.
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And how much profit did you make?
If you would like to share...
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Okay, sure.
I mean, yeah...
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It depends on a lot of things because
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the location where you are
buying the house matters
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So, if you are buying a house
in a already developed area,
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because it is already developed,
so it's not gonna develop that much.
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So the profits
won't be much.
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But if you buy in a already developed area
then the renting chances are easy there.
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Because everyone wishes
to live in a developed area.
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But, if you buy a house
in sort of a developing area,
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then you will get
the houses cheap
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rentals would be a bit difficult
but you will get for sure
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But the biggest advantage is that
the property upraise is higher!
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Because the development that's
gonna happen in 5 years
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if you see the property
percentage wise
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then it will raise more as compared
to a developed area.
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Okay, like if you see in Austin,
Austin Texas has become so famous
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for the profit people have made
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because I have seen that people
have made around 100-200 dollar profit
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on a property which is 500k!
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It wasn't that much here.
Right?
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Atlanta is actually booming as well.
Like Atlanta is not behind!
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In terms of... Yeah Austin
is obviously far ahead but...
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Atlanta is catching up as well.
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Recently Microsoft said that they
are gonna come to Atlanta
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They hop in the 16 acre campus.
So there are lot of jobs.
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Google is here.
All the big companies are moving!
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If you see in mid town all the time
construction is going on...
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Because California, Silicon Valley
has become so saturated
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that a lot of people are moving
to different avenues.
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So the prices in Atlanta
are pretty high as well.
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So, recently because of
house market right now,
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houses are going off the market
in two days!
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They are selling very rapidly.
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People are paying 20k-30k
dollars over the asking price.
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So Atlanta is an amazing place
right now to buy real estate.
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And invest in real estate market.
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So now, let's talk about students.
Would you recommend a student
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on F1 visa...
Whether they be on OPT
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(like if he has just got a job
and the money has started to come)
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Or...
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Even if he hasn't got a job,
would you recommend buying a house?
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I would not recommend on OPT
personally,
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because what happens is..
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if for example,
you didn't get selected in H1B lottery
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and you have to go back to India
while selling the house,
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then your capital gains there...
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you have to pay
taxes on that
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and that's quite
a hefty tax
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as a non-resident alien
for tax purposes.
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But once you get your H1B done,
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then you become resident alien
just for the tax purposes.
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So at that point, if you actually
sell your house, then
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you won't have to pay taxes
on those capital gains.
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- I see...
- Yeah.
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That is interesting... But I would
like to add an information.
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I am on F1 visa but I am still a tax resident
because I have been here for 5 years now.
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If you have spent 5 years,
then you become a resident as well.
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Just imagine, if I had bought
a house last year,
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I was on on F1 visa..
(I am currently a resident after 5 years)
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Then I don't need to
pay taxes, right?
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I am not sure about that.
That needs some research
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because there is another thing
called substantial presence test.
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You can calculate that substantial test
from the IRS website.
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It tells you the number of days you
have spent in the last 3 years in the US
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as a resident alien.
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So that's when you become a resident
for the tax purposes.
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Would you recommend for H1B holders?
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Sure! I mean after getting my H1B,
the next thing I did was getting a house
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because my dad is also
into real estate.
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And his first suggestion was that
as soon as I have some savings,
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to buy a house then I should buy it.
Because...
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renting... what you are doing is
throwing away money.
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That money, you are never
gonna see back.
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But with buying a house,
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when you are paying your mortgage,
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then a portion of yours
is going towards the principle
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and some are going
towards the interest.
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And the ones who are going towards
interest are building their equity
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because when you sell the house,
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then you are going to
get your money back.
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Right?
For example, this house
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when I bought this house...
Now I am planning to sell this
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So the amount of money
I am gonna get back
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... the amount of money I invested
in the mortgage of this house for 3 years
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I am going to get
all of it back!
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Just because the house
was appraised
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along with that, I was moving
towards the equity.
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The money that I
will get now
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will be equal to the money
that I have spent over the three years.
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Basically I have lived in this house
for 3 years for free in a way!
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That's amazing!
That's actually a profit as well, right?
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- Exactly!
- Awesome.
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And...Because if you
count the inflation,
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you are even paying the rent..
you are not getting any asset
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and due to inflation you are
having a double kind off loss.
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So you were beating that
while buying a house.
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And what about renting? Is is legal
on H1B to rent rooms
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to students... and is AirBnb
legal as well?
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Sure!
I did it!
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When I bought this house, I had a
roommate from my company
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and I used to rent a room to him
and that is completely legal.
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No problems whatsoever.
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Wow! And from that
you pay your mortgage?
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Yeah it will help you with the mortgage and
will become an additional income basically.
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It's nice... you will get a roommate
as well.. you know.
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So somebody to
spend time with. - Yep.
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And what about interest rates?
What are the rates nowadays?
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The interest rates nowadays
are quite less
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Because of the pandemic, the federal
government have reduced the rates
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so in 30 years... (it also depends on your
credit score and credit history)
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but it's 2.5% nowadays for 30 year loan.
That's amazing
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And if you take for 15 years,
it goes down to 1.7-1.8%
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If you compare from 2-3 years ago,
then
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it was 4% for 30 years at that time
and now it's 2.5% so...
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1.5% matters a lot!
- Yes! That is really good.
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Like you saved 200,000 dollars
by doing your job,
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so better than buying
a house worth 200,000, you
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buy on a loan.
That is better.
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Because if you are investing the same money
on S&P 500, you will get 7% annual return!
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So you are actually making free money
buy buying a house on mortgage!
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Exactly. And buying a house
on mortgage is important
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because the system
in America is that
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you have to show that
you are a good borrower.
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Like when we open credit cards
or take car loans
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by that they know that we are a good borrower
when we give the money back to the bank at time.
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By that our credits are also improved.
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So if in future we want to
buy a bigger house,
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or if we want to take a bigger loan
then the interest rates increase a lot!
[847]
Now lastly, what were the steps
that you took
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like... was your loan approved first
or did you buy the house first?
[856]
So what were the steps
to buy this house?
[857]
The steps would be...
First, contact a mortgage broker
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Mortgage broker helps you analyze
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...Firstly they will take all your information
about the assets and savings you have...
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On that basis they will tell you that you
can be approved for this amount of loan.
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For example if they say that based on
your savings and everything
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you can be approved for
a 300,000 dollar house loan.
[880]
So you get that pre-approval letter...
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You tell the bank and they contact the
lenders and you get a pre-approval letter.
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Once you have a pre-approval letter,
you contact a real estate agent.
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Then you start looking out for
houses along with the real estate agent.
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If you even clear for
the 300,000 loan
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it isn't mandatory to
buy such a costly house.
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You can choose your amount
because
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you want to save some of your credit
for something else.
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I will also like to add that you
should not pick an expensive house.
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Look at your expenses and decide
the amount you can spend on a house.
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If you are starting off, I would
suggest to get a starter home
[920]
because if you are single, living alone
or even if you have a small family,
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a three bedroom house
is good enough, right?
[926]
You don't need to buy
like a 4-5 bedroom house
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until you are
planning to start a family
[931]
So I will surely speak of that.
[934]
Awesome.
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And this has one more catch
that...
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when you buy, do you have to
pay the fee of the real estate or..
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the seller has to buy?
[943]
Yes, the biggest thing is,
when you are buying
[945]
you don't need to pay any fees
to the real estate agent
[948]
The seller needs
to pay that.
[950]
Since the agent is free, it's always advisable
to hire a real estate agent when you are buying.
[955]
Awesome!
[957]
So.. Thank you so much Prashank!
It was lovely having you
[960]
You knowledge will definitely help
students and H1B holders a lot!
[965]
- Sure! Thank you!
[970]
So we are here at Lowe's
[976]
Since Prashank is leaving the house
so these boxes
[980]
will help in packing.
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