Canadian Investing in U.S. Real Estate – Need Feedback on Structure (C-Corp + LP+LLC)

[Mihailo Rakic]

Hey everyone,

I’m a Canadian investor (Québec) actively wholesaling in the U.S. and now starting to transition into buying rentals. I want to make sure I’m setting up the right structure from the beginning, especially from a tax + liability + scalability standpoint.

🧱 Current Setup

• 🇨🇦 Canadian HoldCo (federal)
• 🇺🇸 U.S. C-Corp (Ohio) → used for wholesaling

From my understanding, the C-Corp seems to be the best fit for active income (wholesaling/flipping), since I can keep profits inside the company and reinvest.

🏘️ Planned Rental Structure (Where I need help)

What I’m currently considering for rentals:

• Limited Partnership (LP)
  • Canadian HoldCo = 99% Limited Partner
  • U.S. LLC = 1% General Partner (GP)

Goal with this setup:

• Flow-through taxation (avoid double taxation issues)
• Liability protection (LLC acting as GP)
• Clean separation from wholesaling activity

❓ Questions

1. LP + LLC Structure
   • Is this still considered the “best practice” for Canadians investing in U.S. rentals?
   • Any major downsides I should be aware of?
2. LLC as 1% General Partner
   • I understand the idea is to isolate liability at the GP level
   • But:
     • Does the LLC create tax complications for Canadians?
     • Is the 1% ownership structure actually clean in practice?
3. LP Location
   • Should the LP be:
     • Formed in the U.S.?
     • Or in Canada?
   • What have you guys seen work best from a cross-border tax perspective?
4. Financing
   • Have lenders had issues lending to:
     • LP structures?
     • Especially with a Canadian entity as LP?
5. Profit Flow
   • When profits flow from LP → Canadian HoldCo:
     • Any unexpected tax leakage I should anticipate?
     • Any strategies to optimize this?

🧠 Overall Strategy

• C-Corp = generate active income (wholesaling)
• LP = hold long-term rentals
• Canadian HoldCo = sit at the top and control everything

Trying to build this the right way from day one instead of fixing it later.

Would really appreciate input from:

• Canadians investing in the U.S.
• Anyone using LP + LLC GP structures
• CPAs / cross-border tax professionals

Thanks in advance 🙏