I live in London and pay taxes in the USA as well as the UK. In other words, I have some experience with cross boarder issues.
How you own the property in the USA will depend on a few things. First, you want the right structure and the right agreements as if both investors lived in the USA and paid taxes in the USA. Liability protection, management agreement between the parties so everything is clear. Assume that someone gets married and then later gets divorced so their assets are split. Will the agreement be clear so when the ex-spouse becomes the new partner things still work. Or one of the two investors is run over by a bus so they no longer can do the work or make decisions. What happens then.
The tax status of the overseas investors is largely their problem. You want a clean transaction. Expect that there will be extra paperwork when you go to sell the property. More so if the seller is not registered with the IRS. Not like it would stop things. Just that there could be some serious cash withheld at the close until the tax bill is paid.
The overseas investors should get independent tax advice.
- Depending on how the ownership is handled, there could be a requirement that the person in charge is liable for making sure the withholding and tax filings are handled correctly.
A tax attorney, not a CPA, will be able to deal with all of the above.