Do the same strategies apply

[Randel V.]

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?

[Roy N.]

Randel:

Wholesaling, while it can be done, will be a hard business in Canada.  The principal reasons are:

1. 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;
2. 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);
3. 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.
4. 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.
5. 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]