I have been looking into multi-family properties for the past 5 months in my area and have found a few interesting deals. I’ve come to the realization that I obviously can’t afford the downpayment for a 1-2 million dollar deal and have also been made aware that in my area if you personally own more than 4 doors you get taxed @ 50% rent income. Which is absurd if it is true. This leads me to the thought of: should I start an investment company to attract investors, and not be taxed as an individual but instead as a corporation. Also any tips from any other multi-family investors who have had success, and how did you start out? ( # of units first purchased, how you got investor money, how you came across the deal, etc...)
Rental Property Investor · Hamilton, Ontario · Member since 2016 · 285 posts · 181 votes
7y
@Joel Senko - Where are you located? I'm not sure if the tax think you heard is correct. Tax rates are generally based off your personal income vs how many assets you own.
@Jacob Perez I live in Saskatchewan, I would have thought so too but like I said that’s just what I heard so I’m not sure if it’s true, I only own 1 house right now also.
Real Estate Agent · Warman, Saskatchewan · Member since 2018 · 20 posts · 9 votes
7y
@Joel Senko I also live in Saskatoon and have about 20 doors now. All of my rental properties are held in a numbered company, my flips are in a different company and my commercial/industrial properties are in a different company. Some investors will go so far as to create a new company for every apartment building that they own. As a realtor in Canada I’m able to incorporate my business, so my professional corporation(Mark Neudorf Realty) owns 12344565 Sk Ltd.(which holds my rentals) I will get taxed at 11 or 12% on my profit, which usually isn’t a whole lot. If I ever want to pay myself personally I can pay up to $30,000 in dividends, there’s no personal income tax then.
My first couple properties were bungalows in Mayfair that I added suites to, then we found some 4plexs and I’ll be looking at an off market 12 unit apartment building on Saturday. It’s been about 10 years now and I feel like my real estate investments will provide an ample retirement but I’m still working towards full time real estate investing.
If you ever wanted to get together for a coffee let me know, I love talking real estate
@Mark Neudorf that’s awesome! I live in Prince Albert but am looking at investing in Saskatoon for obvious reasons, where exactly is the property your going to view? And if you don’t mind me asking how did You manage to get funding for a multi family complex or have you done it all solo.