Canadian's buying cash-flowing properties in the US - help a beginner!

[Harry White]

Hi,

I own 4 two-bdr units in Vancouver BC. Our market here is purely appreciation/principal pay down strategies for investors. Now I want to invest for cash-flow so my wife doesn't have to work anymore, I am looking in the US because CAP rates in BC are quite low.

There is so much information on this site that I don't know where to start looking for people who are Canadian and have done what I want to do.  I really want to find the discussions the real risk factors, and the issues like legal, tax implications, etc.  

Is it a good investment to buy a $40k house in Kansas City with a 15% CAP rate? Sounds crazy to everyone here I talk to. They think I'm insane.

[Hattie Dizmond]

I think the real lesson learned here is, as Bob pointed out, learn the market...learn to do the analysis...and, then DO IT. Don't ever take someone else's analysis or opinion of a property & investment and simply jump. There are people here on BP who advertise "wholesale" properties right here in DFW with fictionalized ARV's and understated rehab costs. When I challenge them on what they are offering as a smoking hot "deal", they can't even counter the issues I have with their valuations. Why? Because they don't understand the market. I don't know much of anything about KC, but I know DFW. The DFWA MSA, which is entirely covered by the North Texas MLS, is over 9,200 sq miles. It can't even be addressed as a "market". If you want to even start understanding it, you have to pick a definable "sub-market" and learn that first. My partner and I build our sub-markets around school districts, which is the driving desirability factor in DFW. Within the sub-markets we have targeted, we have identified specific "micro-markets" that further define and drive RE sales. You have 2 real options, if you don't want to either end up with properties in a war zone or with properties that will never cash flow...do your homework or go with a reputable turnkey provider.