Canadian Investing in the US

12 Replies

Hello everyone.

My husband and I are new to real estate investing, and plan to use the BRRRR method. We've made a few offers and even had one accepted (exciting!) but walked away when we realized that it wasn't a good deal, after all. We've now decided to abandon our idea of investing in Canada and have decided to refocus our efforts into the US, specifically Memphis, TN.

Are there any professionals in Memphis experienced with alien non-resident investors? 

Are there any other Canadians experienced in investing in the US? What advice can you give? 

Thank you!

Jenner Birukow

Hi @Jenner Birukow .  Nice to see a fellow Canadian taking the long distance leap into the US market. In my experience, success will be directly related to the team that you develop in your market. Third party oversight is critical. Trust but verify. 

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Two other adages when it comes to long-distance investing:

1) Trust-but-verify ... until your partners/team have proven themselves, do not assume your best interest comes first.  Even once they have proved their value, periodically verify to ensure your interest are coming first.

2) Be patient  - never be in a hurry to ink a deal.  Run your numbers conservatively - assume things will take longer and cost considerably more than you estimate (particularly while you are newish).  If the deal does not meet your hurdles, let it go ... do not revise your numbers to justify making the deal.

Originally posted by @Jenner Birukow:

@Stephen Fryer @Roy N.

I appreciate the advice. 

Have either of you used a lender for your US investments? 

Jenner:

In our case, our U.S.A. investments were made at a time when the CAD was at/above par with the USD and interest rates were sufficiently lower in Canada that we simply borrowed funds from our {corporate} line of credit here at home.

Originally posted by @Seth Ferguson :

@Jenner Birukow Keep in mind your structure, if you're creating an entity. LLC is not favorable for Canadians tax-wise; go with LP instead. You'll find the majority of people will suggest an LLC without knowing the tax implications with CRA.

Or better yet, collect your near, mid and long-term U.S.A. investment goals in point form and sit down with a {Canadian} accountant - and possibly an attorney as well - with cross-border business/real estate experience and determine the ownership structure which makes the most sense for you (and how it will evolve as your business grows).

A Limited Partnership (LP) is not always the best fit. Sometimes you may actually want a U.S.A. corporate entity - in which case an LLC that elects U.S.A. tax treatment as a corporation will often do - to provide you with control on when retained earnings are repatriated to Canada {you may want to hold them in country for re-investment}.

Hi @Jenner Birukow

I am an active investor in Memphis from Calgary, AB.  Heading down to check on our OH and TN properties next week actually.

Have you had an opportunity to meet with an accountant yet? There are several things to consider before setting up your structure; your business plan and growth trajectory being paramount. Feel free to reach out to me on DM to discuss further; I don't want to put that onto the forums in the event someone should take it the wrong way or as a best-fit path to follow blindly.

Have a great weekend!

@Jenner Birukow

I actually took on a US lawyer. You'll want a lawyer who has a service agent that can do your annual filings and mail handling. I've founded cheaper that way.

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