In conversations with agents, I frequently hear, “We don’t have international buyers where I live.” And while I will agree that some areas are more attractive destinations for foreign nationals, you would be surprised at the amount of global business taking place in the most unlikely of areas. Much of it begins with opening your eyes and your mind!
Each year, NAR Global produces Local Market Assessment reports, where we profile three “unlikely” states for finding global business. Current state profiles include Alabama, Arkansas, Colorado, Georgia, Kentucky, North Carolina, Ohio, Utah, and Washington.
Stay tuned – new reports are coming this month for New Mexico, North Dakota, and Virginia!
Below, you will find an excerpt from the North Carolina report. Please note, however, that you don’t have to live in North Carolina or the specific states profiled to benefit from this research. These processes can be followed in any state and can help lead you to undiscovered global business!
A vibrant state, North Carolina is a global player in research and development, technology, healthcare and manufacturing. It wasn’t always that way. Fifty years ago the state’s economy was dependent on tobacco farming, furniture manufacturing and textiles. The founding of Research Triangle Park in 1959 launched North Carolina’s rebirth, drawing investments and talent from across the U.S. and later from around the world.
Today North Carolina is an international powerhouse of innovation and a magnet for foreign-born workers and global investors. Over 750,000 North Carolinians, or about eight percent of the population, are foreign born. Latinos and Asians make up roughly two-thirds of these immigrants. In 2012, they pumped $12.9 billion into the state’s economy.
Immigrants include entrepreneurs, investors and professionals looking for opportunity. Their influence is felt across the state. They buy houses, invest in commercial property, start businesses, revitalize small towns and create American jobs. They are an engine of the state’s prosperity.
1. Explore your local demographics
Start by examining who lives in your market. NAR’s Business Data for International Real Estate Transactions in North Carolina, (along with similar reports for all 50 U.S. states and D.C.), provides a snapshot of recent immigration, country of origin, homeownership rates and naturalization patterns.
For demographics on your immediate area visit the website of your local Chamber of Commerce. For example, the Wake County Economic Development Program of the Greater Raleigh Chamber of Commerce has data on population characteristics and household income by city and town.
The Immigration Policy Center (the research and policy arm of the American Immigration Council) analyzes the impact of immigrants in every state. Searching for North Carolina brings up reports showing that foreign-born entrepreneurs started 33,120 new businesses in the state between 2006 and 2010. Those businesses can be found in both urban and rural areas and generated $1.7 billion in revenues in 2010, almost eight percent of the state’s business income.
In many rural communities, small Latino businesses are shoring up local economies and revitalizing aging downtowns. Explore foreign-owned small businesses in your market. Their owners may be key community leaders.
2. Get involved with other global agents
The quickest way to move up the global learning curve is to tap the knowledge and experience of others. “Agents in the Raleigh area have a terrific resource in the Triangle International Council of REALTORS®,” says Diana Braun, PMN, SFR, Broker at Real Living Pittman Properties and President of Braun Consulting, Inc. in Raleigh. “TICOR has bi-monthly meetings featuring how-to topics, such as taxation, loans for international buyers, cultural differences in business practices and even mobile apps for international business.”
The Greensboro Regional REALTORS® Association also has an international task force devoted to expanding members’ global opportunities. If your local association doesn’t have a global council, you can always participate in others or work with the staff at your local association to explore the possibility of forming one. (Learn more about Global Business Councils at realtor.org/global-business-councils.)
Braun also suggests networking at NAR conventions and expos. “REALTOR® Party Convention and Trade Expo in Washington, D.C. is an excellent opportunity to visit and introduce yourself at embassies.” Also, don’t forget NAR’s annual REALTORS® Conference and Expo each November to network with international agents from across the U.S. and over 50 countries.
3. Search out foreign-owned company locations in your area
North Carolina ranks third in the nation for jobs created by foreign direct investment. According to the North Carolina Department of Commerce at thrivenc.com, foreign-owned companies employed 206,700 workers in 2012, almost half in manufacturing positions. The state is home to manufacturing facilities from 39 countries.
To make inroads, get to know location specialists at the Department of Commerce (DOC). They work with representatives in the Department’s overseas trade offices in Canada, Germany, Japan and China to attract international investment. Identify the international businesses in your area and approach them about helping executives relocate to the area.
You may also want to get involved in the DOC’s efforts to bring new companies to North Carolina. Inbound and outbound trade visits offer excellent opportunities to introduce yourself to foreign executives and promote your area.
Foreign-owned companies can be a nexus for many different types of global transactions. You may be able to connect with relocated executives looking for homes or overseas employees scouting for commercial property or industrial sites. Company executives may refer you to others abroad who want to invest in North Carolina property.
4. Identify corporations in your market hiring foreign workers
North Carolina companies stay competitive by drawing on an international pool of highly-skilled workers. In order to hire foreign workers, companies must apply for temporary work visas including H1-B, H2-B and green cards.
There is a steady flow of visa workers into research and development, technology, science, healthcare, hospitals and universities. If these types of industries are in your area, you’ll probably find incoming foreign nationals working in STEM (science, technology, engineering and math) jobs.
In 2011, over 7,400 H1-B visas were issued to immigrants coming to work for North Carolina companies. Their average annual income was $68,113—significantly higher than the median household income for native-born citizens ($46,450). Many of these immigrants will stay and apply for permanent residency, making a long-term impact on the economy. Identify companies in your market who are sponsoring workers and explore ways to assist them in finding housing.
5. Look for overseas investors
International real estate expos offer one avenue for networking with agents from other countries and prospecting for foreign investors. (Visit NAR’s Global Meetings Calendar for a constantly-updated list of upcoming meetings.) The North Carolina Department of Commerce is also a good starting point for networking with international investors.
“I have had many Latin American buyers interested in the Triangle area,” says Jose Serrano, CIPS, ABR, CRS, GRI, SFR, SRES, Broker at RE/MAX United in Raleigh. “Prices are very high in Chile, Venezuela and Argentina, plus some people are concerned about political and economic stability. The exchange rate is very favorable now and they see the U.S. as a place to safely invest in income property and get a decent return.”
Latin Americans are buying residential property in the Raleigh area, where the airport has good connections to major South American cities through Miami, Atlanta and Dallas. Condominiums, in particular, are a bargain. “A condo in Raleigh selling for $300,000 is comparable in features to one in Santiago selling for about $500,000,” explains Serrano.
Serrano recommends traveling to major cities in your target countries and giving seminars on your market for local agents. He warns that you’ll find some cultural challenges. Referrals are not part of Chilean business practices, so you may have to strike individual agreements with agents and follow through with referrals from your end. “They are always pleasantly surprised when I send them American buyers,” he says.
6. Become familiar with EB-5 Regional Centers
The EB-5 visa program encourages high-net-worth foreign nationals to invest in U.S. projects that create new American jobs, frequently through corporate entities called EB-5 Regional Centers which have been approved by the United States Citizenship and Immigration Services. Upon successful completion and proof of job creation, an investor can then apply for permanent residency for himself and his family. The funds are invested in a commercial project for a five-year period.
“EB-5 investments are considered registered securities, so most agents cannot become directly involved in those transactions,” says Sid Bhatt, CCIM, co-founder and CEO of the Carolina Global Regional Center (CGRC). He adds that agents can benefit in other ways. “Wealthy EB-5 applicants may be looking for other higher-return commercial investments. Once they get temporary residence status, they will want a nice home. Later, when their EB-5 project is complete, they may want to reinvest those funds in other real estate opportunities.”
Shashin Patel, CCIM, and Chief Operating Officer of the CGRC, emphasizes that job creation is key. “Projects must be solid and pass rigorous government formulas in projecting the number of jobs created. The applicants’ visas are riding on real results, not just rosy projections. We believe conservative projections lower applicants’ risks.”
7. Leverage your knowledge and experience
Depending on where you do business, you may come across other global activity. For instance, in the academic year 2011-2012, North Carolina colleges and universities enrolled 13,770 foreign students who contributed $338.8 million to the economy. Wealthy overseas parents sometimes purchase homes/condos for their children, either selling them upon graduation or keeping them as income property. If there are universities in your market, consider exploring these opportunities through the school’s Student Housing office.
Braun also recommends keeping an eye open for foreign-born sellers. Immigrants who have built successful careers in the U.S. often wish to return to their home countries later in life. “I had a client who moved here in 2001, but has now retired and is moving back to Japan,” she says. “In many cultures it is customary to live near family as you grow older.”
Whatever niche you choose, you will encounter new and different global opportunities the more you get involved. For example, that foreign-born executive you helped relocate to the state may later decide to purchase a vacation home or to invest in income property. Leverage your expertise against whatever new international business you encounter—in North Carolina, those opportunities are increasingly growing.
As mentioned above, no matter where you live, this information is paralleled in other markets. Follow the processes in these reports to identify global opportunities in any global market! Realtor.org/global/local-market-assessment-case-studies