There’s always something to howl about.

Author: Phil Hodgen (page 1 of 1)

International Tax Lawyer

BHB-style lawyer marketing – from the trenches

This is a long-delayed post. A thank you to BHB. A clue for others to see, use, follow. This post is about marketing techniques. A case study. A “you can do this, too.”

Apology in advance

Gregg, please pardon the backlinking to myself. I don’t like to pee in the pool by hyping myself, but the project I’m backlinking to is almost over, and will be worthless by the 15th of October, so I have no long term benefit from this. I’m deliberately not linking to my main website.

The world we live in

BHB is interesting to me. The philosophy (treat your customers like humans, get ’em smart, treat ’em right), the approach (use the tools that Teh Interwebs give ya), the people.

The real estate world is hidebound and burdened with useless historical debris. But the law world is worse. Lawyering is a closed shop industry and the State Bar is hellbent on protecting union members. Using ideas imported proudly from Elizabethan England.

BHB-style thinking and action to me is what the individual can do — constructively — to rage against the machine. (Hmmm. Good name for a band, I think.)

The opportunity

First, background. The IRS announced a voluntary disclosure program in late March, 2009 — people with money hidden offshore could Come to Jesus and avoid criminal prosecution for tax evasion.

I’m an international tax lawyer. Ding-ding-ding.

Seizing the opportunity

With help and coaching (ha! Chris hates that word!) from GenuineChris I launched www.foreignbankaccountamnesty.com. Simple WordPress install, various plug-ins, no biggie.

With me so far? Yep. All of you have launched blogs. Ain’t but a few of you who have made money on them. Listen up.

Get to work

Here’s what happened next. Chris Johnson harangued me. “Write!” he commanded. I wrote like an SOB. I remember one time when he said “It doesn’t matter what you write, just write.” As if content doesn’t matter. My “A” student overachiever feelings were hurt. But I wrote. Brute Force SEO. That’s what we Read more

The mortgage situation for nonresident buyers

Tom Vanderwall chimes in here on BHB regularly and helpfully about the mortgage situation. I look forward to his interpretation of the spins we get from DJ Bernake and crew.

I handle foreign real estate transactions and here’s what I’m seeing right now. What follows is all buyer-side stuff, because of course they’re the ones looking for financing.

War story. (In progress).

I have a buyer from the Middle East. Extremely solid person, extremely *ahem* solid balance sheet. Wants to buy a house in the $5 million range. No one that I have found (and I have tried mortgage brokers from Florida to California) can put an offer on the table for a sane mortgage. Even at 50% loan-to-value.

He banks with one of the brand name international banks and ordinarily you’d think that they would do something for him, if only to protect their customer relationship. (Considering the other business the bank gets from him and the family business, you’d think . . . .) But no.

So we keep looking. Most likely solution is either an all cash purchase or my buyer will do a margin loan against an investment account outside the U.S.

War story. (In progress).

Family from outside the U.S. is busily buying up rental properties by the handful somewhere in a State that isn’t touched by ocean. Let’s just leave it vague like that. Putting in enough money so the properties will be cash flow positive. Can’t get a single lender interested in taking a look at the portfolio of properties. At any “reasonably close to market” terms.

Again they will leverage offshore assets, borrowing short term. They’re buying all cash, basically lending to themselves (via a nifty “Bank of Me” structure I set up for them), and hoping that in 6 – 12 months they can find a bank that is willing to look at lending against 25 properties all cash flow positive.

War story. (In progress).

Right now. East Coast. Condo purchase, around a quarter million. Same thing.

War story. (In progress). Read more

Swiss Accounts, Condo Developers, and an Open Door

Americans who hide money offshore have a almost mystical belief in foreign bank secrecy laws. Whether it is Switzerland or the Carribean they believe that these countries’ laws and bankers will protect them from the U.S. government’s investigators and tax collectors.

Secrecy has crumbled. You wouldn’t know it from the people who come to my office looking for advice. They have faith that their bearer shares and banking arrangements will stay invisible to the IRS. They believe that the U.S. government is pursuing the Swiss bank UBS. They don’t have their money in UBS, so they think they are safe.

There is no such thing as secrecy. The likelihood that the IRS will find Americans with hidden offshore bank accounts increases with each passing day. Let’s look at recent history.

In early 2008 it was revealed that the German government had paid an informant 4 million euros for stolen information about “safe” accounts in Liechtenstein. This information was passed on to other governments. Including the USA. One hundred U.S. taxpayers were caught in this net…so far. Bribery by the German government put U.S. taxpayers in the cross-hairs of criminal charges.

What about resentful ex-employees doing dumb things? Rudolf Elmer worked at Bank Julius Baer, a prominent Swiss bank. He lost his job. The normal legal back and forth followed. Except that in a fit of pique Mr. Elmer released hundreds of internal bank documents on the internet. Including the names of bank customers.

Now the elephant is dancing. The U.S. Department of Justice is pursuing UBS, trying to get UBS to turn over the names of as many as 50,000 names of U.S. account holders. A UBS executive was arrested, pleaded guilty, and is cooperating with the U.S. government.

I’m guessing that more than a few of BHB’s readers have clients with offshore bank accounts. Asset protection trusts. Etc. People whose tax strategy is “How will the IRS ever find out?” Especially condominium developers. 🙂 As sure as night follows day, construction defect litigation by homeowners associations will follow the successful completion of that condominium project.  And Read more

Handling a deal with a foreign buyer or seller

I am an international tax lawyer. I handle lots of real estate transactions with foreign sellers and buyers. I don’t have a real estate license, and I don’t ask for a piece of the commission. Got that out of the way for ya, didn’t I? Here are a few things to keep you sane when you handle a deal like that

Two mothers

“When Mama’s happy, everybody’s happy.” And in a real estate deal with foreign players, you have two mothers. Keep them both happy and you’re likely to close your deal on time.

Mama number one is your title officer. Ask a simple question. Demand a yes/no answer. “Have you handled a real estate transaction with a foreign seller/foreign buyer in it before?”

Don’t say “Can you handle one of these transactions?” Because of course they CAN. Right? And they will.

Right up until 5 days before closing and they figure out that the seller is a Bahamas corporation and they start insisting that you register the corporation with the Secretary of State and get a certificate of good standing from Sacramento and the Bahamas and oh, who are these people who claim to be the officers?

Mama number two is escrow. Especially for a foreign seller. Call up your escrow officer and ask the same question: have you done one of these transactions before?

Loyalty matters. But business is business. You don’t want your deal to be the crash test dummy. Let them learn on someone else.

War story: two summers ago, I handled two very similar deals in Southern California at the same time. Different title companies. One inexperienced title officer, one experienced. The novice title officer cost the buyer an extra $5,000 in legal fees to get the deal done.

Foreign seller

If your seller is a foreigner, here’s your checklist:

Tax ID number

The seller needs a U.S. tax identification number. More often than not they don’t have one. Go to the IRS website and pull down Form W-7 for a human seller. Get in Read more