Calgary , Alberta · Member since 2017 · 10 posts · 2 votes
Hello,
I'm an investor in Calgary, AB, Canada and looking into the BRRRR strategy to diversify.....I'm sure most of you know the cap rates in my area are minimal at best. Just wondering if anyone out there knows of Canadians investing in the US markets?
The cap rates in the US are very appealing but there are several disadvantages such as, CAD vs USD, higher interest rates for foreign buyers...Just curious if this balance could still be favorable for a Canadian investor even with the disadvantages?
Or if there are any established JV partners who think we could arrange a win/win, shoot me a message.
Rental Property Investor · Dallas, TX · Member since 2013 · 38 posts · 5 votes
9y
Hi Justin, I live in Calgary and am currently in Dallas, investing in real estate stateside. I agree with you. The Canadian market was too pricey for me, but I've made it work in Texas. Cal Ewing, another Bigger Pockets member also does the same.
Maybe we can have another BP meet up for those of us in Calgary and exchange ideas and things we've learned. From what I understand there are quite a few of us... Just hope it's scheduled after June 1st... so I have the chance to attend. :)
Du Bois, PA · Member since 2017 · 134 posts · 16 votes
9y
@Justin Currie Im a wholesaler in Ohio markets of Cleveland, Dayton, and Cincy, @Linda Labbe is correct the rates are very good in these markets. If you ever think about venturing into these markets let me know we always have properties for sale in these areas
I'm an investor in Calgary, AB, Canada and looking into the BRRRR strategy to diversify.....I'm sure most of you know the cap rates in my area are minimal at best. Just wondering if anyone out there knows of Canadians investing in the US markets?
The cap rates in the US are very appealing but there are several disadvantages such as, CAD vs USD, higher interest rates for foreign buyers...Just curious if this balance could still be favorable for a Canadian investor even with the disadvantages?
Or if there are any established JV partners who think we could arrange a win/win, shoot me a message.
Thanks everyone,
Justin
Have you been looking into the Turnkey strategy? it might be a good answer for someone outside the US.
Calgary , Alberta · Member since 2017 · 10 posts · 2 votes
9y
Thanks @Jason Weible, Ohio has definitely been on my radar and if I head that direction I will be in touch.
Yes @Tom Ott, the cap rates in the US are impressive for turn key properties...I don't have a huge amount of cash to start out so I was hoping to flip and build a solid base before I started into turn key. Definitely something I'm interested in. Thanks
Investor · Calgary, Alberta · Member since 2016 · 69 posts · 49 votes
9y
@Justin Currie Hi, I also live in Calgary and have invested in properties in Phoenix and Ohio. I agree the prices and going rental rates in Calgary generally do not work well for new investors here. I woipjld be happy to discuss experiences if you like. Cheers!
Schell City, MO · Member since 2017 · 5 posts · 1 vote
9y
Is prices in Ohio is that much good then I also want to explore this market. But as I am a newbie I just want to now that is it fine for me to invest in this happening market or refer me some other low investment market to start with.
Investor · Scottsdale, AZ · Member since 2016 · 1k+ posts · 885 votes
9y
@Justin Currie Be aware that the U.S. Govt has a recent tax law change that requires Canadian (foreign) investors have a Tax ID number or they will with hold a big chunk on any money you invest here until the tax issues get settled. Talk to an American C.P.A. that does cross-boarder taxes or your local Chartered Accountant.
Lots of Canadians invest in Arizona. That's how I became aware of it.
I have a local guy who specializes in those issues if you choose to invest in Arizona.
Wholesaler · Calgary, Alberta · Member since 2016 · 35 posts · 33 votes
9y
Hi Justin:
I live in Calgary and have been investing in Houston for the last 7 years. A few pieces of advice:
- if you intend to hold onto these properties for any length of time your property management company will become one of the most important components of your team. You can't always be on the ground so you need a property management company that has your back.
- make sure to get good cross border advice from an accountant/lawyer on how to best structure your purchases to minimize taxes and reduce liability.
Best if luck! I think you are making a good decision in venturing down to the USA.
Is prices in Ohio is that much good then I also want to explore this market. But as I am a newbie I just want to now that is it fine for me to invest in this happening market or refer me some other low investment market to start with.
The prices in Ohio are pretty great. You can see some amazing ROIs since the rent isn't really too low in the suburbs.
Investor · Tampa, FL · Member since 2016 · 334 posts · 215 votes
9y
Ken Min
"@Justin Currie Be aware that the U.S. Govt has a recent tax law change that requires Canadian (foreign) investors have a Tax ID number or they will with hold a big chunk on any money you invest here until the tax issues get settled."
What law are you referring to and what do you mean by "recent"?
AFAIK having a tax ID has always been the case and personal gross income is subject to 30% withholding. Having a tax ID doesn't waive the withholding requirement.
Investor · Scottsdale, AZ · Member since 2016 · 1k+ posts · 885 votes
9y
CRA’s Bad News for Canadians Investing in US Real Estate
Two popular vehicles for investments in US real estate are limited liability limited partnerships (LLLPs) and limited liability partnerships (LLPs). However, the CRA’s announcement at the May 26, 2016 International Fiscal Association (IFA) round table that it will consider many of these entities corporations for Canadian tax purposes has sharply increased their effective tax rate. As a result, restructuring that requires forgoing limited liability may be necessary. The restructuring will have to be done by 2018 in order to take advantage of administrative relief provided by the CRA.
For investments in US real estate, US legal counsel often recommend the use of disregarded limited liability corporations (LLCs), which offer both legal liability protection and flowthrough treatment for US tax purposes. However, for the reasons discussed below, LLCs are not tax-efficient for Canadian investors, because LLCs are treated as corporations from a Canadian tax perspective
Investor · Scottsdale, AZ · Member since 2016 · 1k+ posts · 885 votes
9y
AND:
Moreover, most Canadians will be required to report the TFSA to the US Department of Treasury on an annual basis, as it is mandatory to submit the Report of Foreign Bank and Financial Account Form TD F 90-22.1. If you are a Canadian, living in the US as a resident, you may have to pay penalties for failing to disclose the TFSA account, which is termed as a foreign bank account.
Again, there are additional concerns regarding whether or not the TFSA will be considered as a foreign trust under the US tax law. There is considerable confusion regarding this, as the Internal Revenue Service (IRS) has not revealed their official position on this issue yet. In the circumstance that the IRS decides to consider the TFSA as a foreign trust, the Canadian, who is a U.S. taxpayer, will be termed as an owner of a non-resident trust. As a consequence, the Form 3520-A, titled “Annual Information Return of Foreign Trust With a U.S. Owner,” will be required to be filed within two and half months once the trust’s year ends. Any failure to submit the Form 3520-A with the IRS will be subjected to a penalty greater than $10,000 or 5-percent of the gross value of the trust, which is the total amount left in the TFSA at the end of the tax year.
Vancouver , Bc · Member since 2017 · 73 posts · 13 votes
9y
Hey everyone. I'm in Vancouver BC and invest in Arizona as well.
Looking for some more I on having a tin. Are you guys referring to the firpta withholding (not a tax) on a sale of real estate over 100k and to a non primary resident buyer?
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
9y
Just be careful about investing with someone in Georgia with the initials JS. I'm in touch with several Canadian investors that have been scammed by this 'turn key provider', who's been concentrating on Canadian investors and even started an REIA organization in Canada.
This guy sold them 'turn key', but the houses were never finished and are now sitting boarded up, while he took their funds.
Calgary , Alberta · Member since 2017 · 10 posts · 2 votes
9y
@Account Closed Good to hear, keep in touch and maybe we can help each other out with the buying/tax process. I'll let you know if I track down any helpful info.
Santa Ana, CA · Member since 2016 · 15 posts · 5 votes
9y
Buyer caution on Linda Labbe, she works with a company Sierra real Estate Investments in Toledo and Steve Haight. We were newbies and lost a lot of money, work was promised and never completed.
Investor · Fort Myers, FL · Member since 2015 · 292 posts · 278 votes
3y
Hi I am a Canadian investing in the US. I have lived my entore adult life here. We started investing in real estate about 15 years ago but greatly accelerated our journey in the last 5 years. I would be happy to be a resource for any Canadians that want to collaborate or just want a contact stateside. Please feel free to reach out and connect.