Montreal, QC · Member since 2016 · 8 posts · 1 vote
Hello
Most material I come across on the Web for wholesaling and flipping are geared toward US investors - is there much of a difference when applying a strategy in Canada? What are the key differences?
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
10y
Randel:
Wholesaling, while it can be done, will be a hard business in Canada. The principal reasons are:
Sourcing off market properties is more work. Unlike south of the 49th, privacy laws here do not make lists of property owners (in mortgage default, probate, etc) readily available;
Market size - The entire Canadian market is 1/10 the size of the U.S.A. housing market. Outside of a few major centres (Vancouver, Toronto, MTL, Calgary, etc) you do not have density to sustain a wholesaling business (if it is your only source of income);
Mortgage arrears/delinquency - Mortgage arrears in Canada are historically far lower (<1%) than in the U.S.A. and delinquencies are less than half the amount of arrears. Combine this with the smaller overall market and your pool of motivated sellers is smaller.
Canadians seem conditioned to use real estate agents. Getting Dick and Jane to sell you their house privately, let alone let you tie it up to try and sell it at a mark-up, can be quite a challenge here.
In most jurisdictions in the country if you are not taking possession of the property (i.e. owning it), you would be brokering without a licence which can get you into trouble.
[Note: I though I had posted the above at lunch time today, but I see it is still sitting in the compose box. Sara has already covered some of the above]
Rental Property Investor · Oakville/ Brantford, Ontario · Member since 2015 · 147 posts · 91 votes
10y
Hi Randel V. There are some differences to note but some similarities as well.
It is a lot easier to get lists in the US but due to privacy laws Canada doesn't offer the same level of lists you can get in the USA. Wholesaling is definitely not as prevalent in Canada and there are certainly not as many foreclosures / bank owned homes as the USA
As for flipping, strategies those can be fairly similar such as the 70% rule
Taxes and legal stuff is different as well
The concepts are similar and the strategies can also be similar
Montreal, QC · Member since 2016 · 8 posts · 1 vote
10y
Hi Sarah Larbi wholesaling seems to be the best strategy for US investors with no money or much of a credit to start. If wholesaling is not that prevalent in Canada do you know of anyone that started with no money and what they did? Can Canadians wholesale US properties?
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
10y
Randel:
Wholesaling, while it can be done, will be a hard business in Canada. The principal reasons are:
Sourcing off market properties is more work. Unlike south of the 49th, privacy laws here do not make lists of property owners (in mortgage default, probate, etc) readily available;
Market size - The entire Canadian market is 1/10 the size of the U.S.A. housing market. Outside of a few major centres (Vancouver, Toronto, MTL, Calgary, etc) you do not have density to sustain a wholesaling business (if it is your only source of income);
Mortgage arrears/delinquency - Mortgage arrears in Canada are historically far lower (<1%) than in the U.S.A. and delinquencies are less than half the amount of arrears. Combine this with the smaller overall market and your pool of motivated sellers is smaller.
Canadians seem conditioned to use real estate agents. Getting Dick and Jane to sell you their house privately, let alone let you tie it up to try and sell it at a mark-up, can be quite a challenge here.
In most jurisdictions in the country if you are not taking possession of the property (i.e. owning it), you would be brokering without a licence which can get you into trouble.
[Note: I though I had posted the above at lunch time today, but I see it is still sitting in the compose box. Sara has already covered some of the above]
Investor · Toronto, Ontario · Member since 2014 · 320 posts · 125 votes
10y
@Randel V. - I can't speak to wholesaling, but I can speak to the flipping part. Renovation costs are higher here in Canada compared to the US. Labour is higher, there is more demand for contractors in the major areas, and materials cost is also higher. Tax rules are different as well - so understand the market you'll be doing the flips in. Land transfer taxes in Toronto limit some of the more creative strategies that I can use.
Rental Property Investor · Oakville/ Brantford, Ontario · Member since 2015 · 147 posts · 91 votes
10y
@Randel V. if you find a great deal not on the MLS the money will find you, if you are looking at starting and don't have much money my recommendation is to try and find a great deal, put 5% down on something where you can live in part of it and rent the rest out .... Or slowly start renovating as you are living there.... My personal belief is if you can't at least come up with 5% you should keep saving and learning ...but that's just my opinion... You can use OPM (other people's money) but you should be bringing then something like experience or skills ....
Montreal, QC · Member since 2016 · 8 posts · 1 vote
10y
OK possible but hard(er). No problem. Let's say I have a motivated seller and also have a buyer, a house flipper for example, that wants to buy the property at my desired price. What is my next step? What is the process here in Canada? How similar is the process to the States?
OK possible but hard(er). No problem. Let's say I have a motivated seller and also have a buyer, a house flipper for example, that wants to buy the property at my desired price. What is my next step? What is the process here in Canada? How similar is the process to the States?
You contact me and I will buy your contract from you as long as it is a deal. Or if you don't have a contract I will pay you a finder s fee.
Hi Sarah Larbi wholesaling seems to be the best strategy for US investors with no money or much of a credit to start. If wholesaling is not that prevalent in Canada do you know of anyone that started with no money and what they did? Can Canadians wholesale US properties?
I started with no money by wholesaling but I would recommend becoming an agent as an easier way to get started in real estate than through wholesaling. Wholesaling takes a lot of decision. Least to own can be good too but I am still plugging away at that strategy.