Starting a US Commercial Real Estate Investment firm then investing globally
I want to start an investment firm to invest in commercial real estate I will create the firm in the US and start investing in the US and then I plan to invest globally.

For example I may name my US Commercial Real Estate Investment Firm Blue Estate LLC. This company will act solely as a holding company as it will have no operations other than creating subsidiaries to hold each property and get paid and the holding company would be 100% manager managed by me. I’m thinking to form the LLC in Wyoming to leverage the charging order protections.

If I want to perhaps buy Apartment Building A in a state such as Florida I would create Apartment Building A LLC formed as a Florida LLC that would take title to the financing and the property and be 100% Manager Managed by Blue Estate LLC. As I buy more properties I will repeat using a similar setup.

However, if I go global due to fluctuating currency exchange rates it may or may not be better for me to leave foreign currency in the foreign country and use to buy more property or repatriate profits to Blue Estate LLC in the US in dollars. 

Let’s say I want to expand to the UK. I’m thinking  two options.

Option 1: I create Blue Estate UK LTD which would be 100% owned by Blue Estate LLC and Blue Estate UK LTD would be a UK Holding company to oversee UK investments. Blue Estate UK LTD would form subsidiary property LTD’s for each property acquired. For example, if I wanted to purchase Office Building A I would create Office Building A LTD that would take title to the financing and the property and it would be 100% owned by Blue Estate UK LTD and further UK or other foreign properties I choose to acquire would follow a similar structure. Thus all my profits from my UK properties would go to Blue Estate UK Ltd which keeps the currency in pounds and keeps my money safe as it’s a holding company and separate from the properties. 

Option 2: I acquire Office Building A by creating Office Building A LTD to take title to the financing and the property and it would be 100% owned by Blue Estate LLC. This means all UK profits in pounds would be repatriated to the US Holding LLC in dollars. Would currency exchange fees be an issue and if so how would I deal with this?

Note: Yes I know it’s long but it’s my way of explaining and it gets straight to the point. Please state your opinions and suggestion please. I hope you read this far and thanks in advance.
[{"id": "fxv84bp", "text": "(1) talk to a tax attorney, you would need a lot of structuring advice. I\u2019ve never seen a wyoming LLC and def never seen a FL LLC due to their warm body SSN requirement for franchise tax\n(2) all of the international work I\u2019ve done (and I\u2019ve done it all - on shore / off shore, offshore / offshore) just has a currency hedge in place. It\u2019s like 2% of NOI. \n\n(3) looking at your posts you\u2019re clearly a super ambutious 18 year old. Grind to work for an institutional operator, this stuff only comes through a lot of experience, and if you want to do it on your own a lot of street cred and institutional connections. You\u2019re only getting that from working from a name brand PE shop / institutional manager. If I were in your shoes I\u2019d grind in college to get a job at one of the \u201cbig\u201d CRE I banks as an analyst then use that to jump off to a PE shop. My $0.002", "replies": [{"id": "fxv8l3r", "text": "Ok thanks. Regarding (3) yes I am a super ambitious 18 year old even my parents and friends say I\u2019m always talking about real estate and business etc and starting a business.\n\nI tell my parents it\u2019s a good thing to be obsessed with what you want to do I mean look at the late Steve jobs, bill gates or Elon musk both all were passionate about what they wanted to do and are faces of technology especially Steve jobs still relevant to this day and was the face of innovation.", "replies": [{"id": "fxvidau", "text": "Thats great, really. Stay ambitious but don\u2019t let it turn in naivety. Listen to with experience even if the advice doesn\u2019t sound glamorous.", "replies": [], "depth": 3}, {"id": "fxw7glf", "text": "Good for you young person. People may laugh at your lack of grammar and ignorance of life in general now, but it is that blind faith in capitalism that is the lifeblood of the American Dream. If your generation becomes jaded realists like the rest of us, then we old fat Karens would starve to death waiting in line at McDonalds with no one to serve us.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fxv93uv", "text": "Dream big, but make sure you understand each market before you start investing. A good price in City, State, or Country A isn\u2019t necessarily a good price in location B. Unless you\u2019re doing very institutional deals you\u2019ll be much more profitable specializing in a single market starting out.", "replies": [{"id": "fxv9blf", "text": "Yes I know. Obviously I don\u2019t expect to have an international real estate portfolio in a single year. It\u2019s just that I believe certain things like company structures etc should be right from the get go or it\u2019ll really mess stuff up. I don\u2019t want to make unnecessary mistakes.\n\nAlso I\u2019ve learnt that certain tools can aid with market research such as government websites providing data relating to migration, population etc.", "replies": [{"id": "fxv9zti", "text": "I want to look back at this in 5 years and see 50M in acquisitions out of you. Best of luck!", "replies": [{"id": "fxvbl5a", "text": "Thanks. I have to say the internet is really valuable it allows you to learn so much and provides you with valuable opportunities such as the ability to make money from home.", "replies": [], "depth": 4}], "depth": 3}, {"id": "fxvcw4q", "text": "Corporate structure doesn\u2019t matter until you start raising OPM and need blockers set up for taxable / exempt US, ERISA clients, foreign, etc. until you get to that point it doesn\u2019t matter, you just need an individual holdco / propco structure. OPM changes it when you\u2019re now managing an OP / REIT structure. I wouldn\u2019t sweat structure, that\u2019s for the guys at Ropes to deal with.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fxvbs3k", "text": "Do you have lots of liquidity? If not, forget the complex structuring until you do. KISS principal. A simple system is generally the most lucrative.", "replies": [{"id": "fxvbwit", "text": "Nope haven\u2019t started investing yet or have job. I\u2019m 18 and plan to get a job in September. I\u2019m just thinking ahead as I like to plan for the future and want to heavily minimise mistakes that may be avoided.", "replies": [{"id": "fxvc775", "text": "Mistakes are the life blood of success. Make as many as you can until you can pay others to ensure more aren't made.", "replies": [{"id": "fxvcs0j", "text": "Yes I know but mistakes should also be avoided especially when they are costly. You can sometimes learn from others mistakes instead of making that mistake yourself.", "replies": [{"id": "fxwem7m", "text": "Sounds like you already know everything, why don\u2019t you go invest in a property already?", "replies": [{"id": "fxwfh9n", "text": "Well I recently turned 18 and don\u2019t have a job yet to save up to buy property. It\u2019ll be more beneficial to start learning as much as I can first.", "replies": [{"id": "fxwfsi2", "text": "I was being sarcastic. Here\u2019s my real estate advice: if someone gives you advice, say thank you.", "replies": [{"id": "fxwfv8z", "text": "Noted \ud83d\udc4d", "replies": [], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}, {"id": "fxwfctk", "text": "Here\u2019s a tip: when people are giving you advice. It is best not to reply with \u201cyes I know\u201d and then try to correct that advice. You\u2019ll get a lot less advice that way.", "replies": [{"id": "fxwfhpi", "text": "Ok", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fxvmkzx", "text": "How do you plan on raising millions of dollars? The truth about real estate is that it isn't hard, a little algebra, some legal understanding, some tax education, knowledge of construction. What it does need that can't be learned by a reasonably competent person is capital, lots of it.", "replies": [], "depth": 1}, {"id": "fxwp3xc", "text": "The ceiling to entry is quite massive for commercial properties. Typically, in the tens of millions. Most people won't save $1 million throughout their entire life. \n\nA few major concerns I have for you right out of the gate is you've spent a lot of time \"planning\" this seemingly extraterrestrial goal when the reality is your capital is at a flat zero. While most of the concepts you've discussed in your plans are very basic concepts in the real estate world. Knowing how LLCs work is barely 1% of what you'll need to do. \n\nNext, there's no mention of college or University in your entire post. This has the potential to bite you in the ass down the road. I don't mean to smother you, but here's my tip on getting a degree: it introduces you to a whole new social life which I wouldn't have traded for anything, it gives you a network to use which you didn't have before, there's probably some important learning/books involved but for me that wasn't the big factor, lastly, study abroad. Study abroad is a huge opportunity to learn a new language, culture and for you, scope out some commercial markets for the future. Not to mention a degree is a fall back if your entrepreneurial goals are ever detailed. \n\nThe degree will also let you potentially get a job at a commercial firm where you can learn what you need from seasoned professionals who have done this before. Which as you said, you want to learn from others' mistakes. \n\nIf you do pursue further education through a degree or not, I would recommend focusing on Research, Business, Marketing, Math (mostly finance math) and Law. \n\nPretty much every real estate document whether it's a lease, offering memorandum, sale agreement, construction schedule, etc. is chock full of legal language. \n\nResearch will help you learn local market trends, prices, laws and taxes. Zoning is also very important depending on your property type involvement. You can't just put industrial buildings next to schools for example or medical tenants in some retail areas.\n\nFinance math will help you evaluate the income, profit and price of a building to ensure it fits into your investment strategy (and help you keep from getting ripped off). \n\nTo be more specific on your questions posted here, be sure to look into what it takes to open your LLC in a different state. Several states require your business address (which must be able to receive postage) to be in the state you want to open your LLC. This complicates your issue quite a bit. \n\nNext, your conversion from foreign currency to USD is going to average around 3%... Of your profit that you bring home. Which honestly isn't that much all things considered. Let's say you pay $10,000,000 for a retail property in Europe. The annual profits are $20,000. Your conversion is $600. \n\nAdditionally, you still have to pay taxes on your foreign income in the US whether you convert it or not. And the IRS will use whatever exchange rate is the current average annual exchange rate typically posted by banks or major financial entities. This can obviously fluctuate in major world events such as Brexit or COVID-19. This is just part of the risk of doing business abroad. More on that here: https://www.greenbacktaxservices.com/blog/report-rental-income-foreign-property/\n\nHere's the question you should ultimately focus on when considering foreign real estate. Why? What exactly about that additional risk/headache is attractive vs. the extremely diverse investment opportunities we already have in the US? Make sure you have some good answers. I would say that the \"cool factor\" of owning off shore property is generally a stupid reason, but only if it ends up poorly in tend of your return on investment or *ROI*. \n\nReal estate is one of the few industries where you benefit greatly from knowing what's going on in the world. For example, a few years ago there was a killing of a reporter named Kashoggi in Saudi Arabia. This effected Saudi Investment into a Japanese investment firm called Soft Bank. In turn, this effected one of my largest clients WeWork and we were unable to rely on some anticipated cash injection from Soft Bank to lease more real estate here in the US. World events are more and more important as you're business scales up. So best start reading the New York Times, Wall Street Journal, etc. \n\nAgain this is all just the tip of the iceberg. Prepare yourself for long hours, at least a decade of learning before you gain any real traction and eventually you may actually reach your goals. You've chosen a fairly masochistic path, but it's not impossible. I say commit and go for it!", "replies": [{"id": "fxwtleo", "text": "Yes I know commercial real estate is expensive I plan to start with small apartment buildings 5+ units in the 6 figure range so that I can raise NOI, increase property value, refinance and buy more buildings and repeat essentially BRRRR which helps me build my capital.\n\nI\u2019m already going to university this September. I\u2019ve got an offer from an accredited university here in the UK. I plan to get two degrees. \n\nFirst is a BSC in Computer Science which is a 4 year sandwich course with a placement in the third year for internships or job experience etc. I\u2019ve got an offer for this course at an accredited university and I am expected to start in September 2020.\n\nSecond is a MBA(Masters In Business Administration) which is a course lasting roughly 2 years I think maybe 1 year and a half maybe.\n\nOh and just to clarify I plan to start multiple companies not just real estate. I want to start my career working in retail perhaps etc as I want to learn fashion and start my own luxury fashion company then eventually restructure and create a group structured as a holding company so I can branch into a variety of industries. \n\nThink Google how in 2015 they restructured and created Alphabet as a holding company to google and other companies such as Waymo etc so alphabet now comprises of many business and is a pure holding company. That\u2019s exactly what I want to do. \n\nYes I know all this takes money but sometimes you have to go in first and get things off the ground and gain traction before you can even raise money. Many entrepreneurs dive in first and actually focus on gaining traction then when investors come they invest if they see progress. It\u2019s easier to get investors when you actually have something rather than just an idea.\n\nWhile building that company I want to also build the commercial real estate firm so my money would be put to use in something that pays me and it allows me to diversify etc.\n\nAs I said I\u2019m not in a rush to start my companies.  I want to start my companies either by my late twenties or early thirties. So basically 10-15 years from now that\u2019ll give me enough time to learn about fashion and real estate etc. I don\u2019t exactly have to be an expert but just know enough. I plan to work multiple jobs such as retail, e-commerce, real estate etc whether they are at the same time or I switch idk. I\u2019m really so excited to just learn I\u2019m not even focused about how much the job will pay me as long as it pays the bills.\n\nYes I know every real estate documents will use legal language well in my MBA we cover some business law and as I\u2019m learning real estate later on I would familiarise myself with the important documents such as lease agreements and tenant applications etc or I could always hire someone like a lawyer to help out. No one no matter how successful knows all these stuff they always have others who might.\n\nYes for research I\u2019ve been asking others and they suggest many websites such as https://datausa.io and many others.\n\nYes finance math is important. I\u2019ve been educating myself on stuff such as COC return which is the Free Cash Flow/Invested Capital (Downpayment + Renovation Costs and other costs upfront) then multiplied by 100% and it tells you the percentage of your annual pre tax income compared to your invested capital so the higher the better.\n\nWith foreign currency and taxes I think it\u2019s best I just talk to an accountant and lawyer when the time comes.\n\nLast of all, me wanting to own real estate globally is not for some \u2018cool factor\u2019 it\u2019s just that every market is different and I\u2019ll want my money to be spread out. For example, I may want property in London, Florida, Texas, Paris etc as every economy is different and it may reduce my risk as I won\u2019t have all my eggs in one basket. If all my property is in one market or one place and something bad happens then I\u2019m screwed.\n\nLastly, yes I know I plan to spend a decade/10 years of learning I am young and have time. As long as I am successful in the future I would be patient.", "replies": [{"id": "fxx2bgx", "text": "Couple of major holes in your statement. When I said 10 years of learning real estate that was 60-70 hour weeks. If you're spread across multiple industries including creative and financial, I guaranty your head will spin. There's maybe .001% of people in history who can do this, take Musk for example and he had a huge catalyst from selling PayPal. \n\nNext, it will be very easy for your competition to specialize in a single business line and perform you. Real estate investors compete for financing based on experience, credit and liquidity. Credit is probably the biggest factor. Being spread across fashion, programming and real estate isn't the best look compared to a fully dedicated real estate investor (unless you already have the liquidity to support your loans). Which... If you're paying off ~$150k to $200k in education plus life expenses, rent, food, transportation... I really don't see how you'll have the money to invest in several companies at once. Angel investors typically only give money to already profitable companies who need to expand and will benefit from expansion. \n\nNext, you mentioned a few US markets for your diversified plan. The thing is, these markets are totally isolated from each other except for extreme scenarios such as COVID or the introduction of Creative Office. And as you can see, these effect the global market if they effect markets within a national boundary. \n\nI think you would be very hard pressed to prove an international diversity-advantage, but I'm willing to be proven wrong... \n\nLastly, you're already not taking another user's advice of being grateful for advice which you said you took note of. Clearly you didn't. Above all else you won't be able to do any of this without strong relationships, people skills and understanding that the world can be unforgiving towards (even highly skilled) young people. After reading your response you come off as quite naive and arrogant.", "replies": [{"id": "fxx2dcl", "text": "RemindME! Ten years \"reply to this thread\"", "replies": [{"id": "fxx2f0v", "text": "I will be messaging you in 10 years on [**2030-07-13 10:57:27 UTC**](http://www.wolframalpha.com/input/?i=2030-07-13%2010:57:27%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://np.reddit.com/r/CommercialRealEstate/comments/hq1jwy/starting_a_us_commercial_real_estate_investment/fxx2dcl/?context=3)\n\n[**CLICK THIS LINK**](https://np.reddit.com/message/compose/?to=RemindMeBot&amp;subject=Reminder&amp;message=%5Bhttps%3A%2F%2Fwww.reddit.com%2Fr%2FCommercialRealEstate%2Fcomments%2Fhq1jwy%2Fstarting_a_us_commercial_real_estate_investment%2Ffxx2dcl%2F%5D%0A%0ARemindMe%21%202030-07-13%2010%3A57%3A27%20UTC) to send a PM to also be reminded and to reduce spam.\n\n^(Parent commenter can ) [^(delete this message to hide from others.)](https://np.reddit.com/message/compose/?to=RemindMeBot&amp;subject=Delete%20Comment&amp;message=Delete%21%20hq1jwy)\n\n*****\n\n|[^(Info)](https://np.reddit.com/r/RemindMeBot/comments/e1bko7/remindmebot_info_v21/)|[^(Custom)](https://np.reddit.com/message/compose/?to=RemindMeBot&amp;subject=Reminder&amp;message=%5BLink%20or%20message%20inside%20square%20brackets%5D%0A%0ARemindMe%21%20Time%20period%20here)|[^(Your Reminders)](https://np.reddit.com/message/compose/?to=RemindMeBot&amp;subject=List%20Of%20Reminders&amp;message=MyReminders%21)|[^(Feedback)](https://np.reddit.com/message/compose/?to=Watchful1&amp;subject=RemindMeBot%20Feedback)|\n|-|-|-|-|", "replies": [], "depth": 5}], "depth": 4}, {"id": "fxx3bg0", "text": "Ok I understand. Yes it\u2019ll be hard but it\u2019s possible to do multiple things. For example, Elon Musk with Tesla and SpaceX as his main businesses.", "replies": [{"id": "fxx54yr", "text": "No, it\u2019s literally impossible to do that. I work probably 70 hours a week as an executive at an institutional CRE PE firm - I barely have enough time for my family - let alone running a 2nd or 3rd company! Pick one thing and be good at it. I mean I occasionally look at side direct investments in CRE but the opportunity cost of my time is far too great to even do that.", "replies": [{"id": "fxx5itd", "text": "Literally impossible but still possible. I won\u2019t give up. \n\nYou said you look at side direct investment in CRE so you invest in commercial real estate. I suggest you devote your spare time towards that so you can build up investment income to retire on. \n\nYou can\u2019t always rely on a job you need investments. As an executive you should be able to have a good amount of money to start investing.", "replies": [{"id": "fxx7vgk", "text": "This is someone in the industry giving you sound and practical advice. Instead of listening you are trying to give them retirement advice as an unemployed 18 yr old. Sounds like you already know everything, not sure why you made this thread", "replies": [], "depth": 7}, {"id": "fxxd25h", "text": "Are you trolling? I\u2019m a portfolio manager for a large fund series, I have plenty of exposure to CRE and the value of my promote is A+ OK. I\u2019ll do a lot better with that then I would flipping like 10 unit apartments or small office buildings hence the opportunity cost of wasting time looking at individual investments for my personal account. I Can assure you that we\u2019re doing just fine, thanks for your advice on my retirement.", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}, {"id": "fxx7i49", "text": "Those businesses began after he had already gotten an enormous amount of capital from PayPal and had proven his worth to investors. Unless you are ridiculously independently wealthy, you are not going to be able to successfully run two businesses in different industries with little to no experience. Rather than correcting the people you are asking for advice, take a moment to actually listen to what they are saying. If you want to successfully work in real estate you are going to need to put in a lot of time learning from someone with experience in the industry before you go out and try and do it yourself.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fxwzrcz", "text": "Going off tangent here but are there some re investment firms that focus heavily on overseas transaction? Are there any compAnies that are hiring by any chance ?", "replies": [{"id": "fxx391j", "text": "Maybe", "replies": [{"id": "fyinyiw", "text": "Ok....", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fxydarf", "text": "Hope you're a money raising whizz at 18. I just financed a cross border REIT IPO and the lawyers alone were over $5M. You're not going to get financing, so better have the cash. Even then, a seller will probably pick someone else who has the surety of execution, unless you're making offers way over market and/or waiving contingencies with full offer $s in escrow.", "replies": [], "depth": 1}]