Investing in Montreal from the USA
Investor · New York City, NY · Member since 2017 · 146 posts · 56 votes
I am exploring potential markets to invest in as I diversify my real estate holdings and I'm curious if it makes any practical sense to look into investing in Canada (specifically Montreal) from the USA? I'm unsure of the tax implications, how the language barrier would affect me, and whether that market is worth diving into.
Montreal is the nearest large Canadian city to me and I have a few friends there as well. I'm mostly interested in either BRRRR or Flips and I likely would buy cash - although I'm also unsure how I would refinance and cash out on a property.
Thanks for any info
I'm sorry guys, but I couldn't disagree more with what most of you are saying... Yes Montreal is very hot and pricey right now, but the key to being a successful real estate investor in ANY market is to find REAL deals. When I say REAL deals, I mean REAL ones... Not the ones that your typical broker is sending your way. You have to work hard to find good deals. My team and I are talking to about 500 people per month to find one good deal. How many sellers are you guys talking to on a monthly basis and how many offers are you making ;)!? Don't get me wrong, it is very difficule like it is in any sizeable market. If it were easy, everybody would do it. When people say that it's impossible to make a good deal in Montreal because it's too expensive, it's like saying that no good deals can be found in NYC, Los Angeles, etc... I've made over 40 transactions in the last 5 years in Montreal and I've never lost a penny, so it's hard for me to agree when people say there are no deals, and I also know a lot of people who succeed even better than my team and I. Hope this helps!
@Guillaume D. It would depend on multiple factors. I'm definitely open to learning more about the market to see where/if I can fit in someplace.
I'm also unsure of the implications of investing into Canada from "abroad" (i.e. higher taxes?)
@Account Closed is one of them and he might be able to get you a good deal if you still want to invest in Montreal for the other reasons you mention.
Alternatively, you might want to really diversify and do the same as I do, which is investing outside of North America in places like the Dominican Republic, Mexico, Costa Rica or Panama. The properties there are of better quality, much cheaper, you can get a much higher rental income and taxes are much lower. The local economies are growing much stronger there in the right places and you can get large capital gains by benefitting from the path of progress. So there is a legitimate reason why the prices are going up there, as opposed to places in North America where prices are fuelled by artificially low interest rates and too many investors chasing too few properties. It would be even better for you than for me because quality properties in these countries are traded in US dollars and your income would be in US dollars as well.
@Mike Lambert Thanks for your response. I'm really intrigued by what you're talking about with Central America, although like any rational investor while I am curious I'm incredibly cautious considering the political, criminal, and economic state of many of those countries. I'd be interested in talking further about it if you had the time.
In regards to Montreal, I definitely understand what you're saying. However, if I worked with someone experienced like @Guillaume D. who hypothetically is very involved locally and was finding deals and had the know-how to flip a profit then theoretically would it even matter if it was Montreal or any other place?
I'm not particularly interested in rentals as I have boots on the ground in another market where my ROI is 10% cash on cash
@Account Closed If you get offered a great return in Montreal it is another ball game. You'd just have to factor in the taxes and the foreign currency risk. What a great return is is subjective and depends on the investor. I'd personally never invest in real estate for a 10% return knowing that this is the long term average return of the stock market, which is less risky much more liquid and has more potential upside if you pick stocks yourself.
As for the political, criminal and economical state of these countries, it's much better than you think. Did you know that the murder rate in Cancun is lower than that in NYC or LA and that the murder rate for visitors is extremely low (hence the tourism has been growing by leaps and bounds over there). Personally, I feel safer shopping for my groceries in Playa del Carmen than anywhere in the US, where I could get shot by somebody mentally disturbed. The Dominican Republic and Panama have been growing at more than 5% every single year over the last 20 years, including during the Global Financial Crisis. That's several times the growth of the US and Canada year after year. Last year, the Dominican Republic's economy grew by an astounding 7.3%, well above China's growth rate. That country has been a stable democracy for 40 years with the sema political party in power since 2004 through undisputed elections without any violence. finally, I encourage you to fly to Miami from Panama City. I did it and, as I saw Miami's skyline I thought: Is that it?
I'm happy to talk to you about investing in these countries and some others. It's my passion so you might as well take advantage of it :-) So feel free to reach out in private.
@Account Closed If you get offered a great return in Montreal it is another ball game. You'd just have to factor in the taxes and the foreign currency risk. What a great return is is subjective and depends on the investor. I'd personally never invest in real estate for a 10% return knowing that this is the long term average return of the stock market, which is less risky much more liquid and has more potential upside if you pick stocks yourself.
As for the political, criminal and economical state of these countries, it's much better than you think. Did you know that the murder rate in Cancun is lower than that in NYC or LA and that the murder rate for visitors is extremely low (hence the tourism has been growing by leaps and bounds over there). Personally, I feel safer shopping for my groceries in Playa del Carmen than anywhere in the US, where I could get shot by somebody mentally disturbed. The Dominican Republic and Panama have been growing at more than 5% every single year over the last 20 years, including during the Global Financial Crisis. That's several times the growth of the US and Canada year after year. Last year, the Dominican Republic's economy grew by an astounding 7.3%, well above China's growth rate. That country has been a stable democracy for 40 years with the sema political party in power since 2004 through undisputed elections without any violence. finally, I encourage you to fly to Miami from Panama City. I did it and, as I saw Miami's skyline I thought: Is that it?
I'm happy to talk to you about investing in these countries and some others. It's my passion so you might as well take advantage of it :-) So feel free to reach out in private.
Wow very good post. I would love to learn more, any chance you could make a thread? How do you manage these properties? How do you find them? How is the banking system? Can you buy properties with no money down like in montreal/quebec?
I wouldn't mind writing a thread as you suggest but I have to make sure it's not an ad for my business, which is not allowed in the forums.
The link you mentioned is interesting, even though getting financing isn't as easy as they suggest it is, especially not when it's at 70%. Using a Panamian corporation might be good for asset protection purposes as they mention but that will make getting financing so much more difficult. You cannot borrow the funds for the down payment.
@Mike Lambert Hi Mark, I’m from Montreal aswell and couldn’t agree more with everything you said. I am just starting to invest so my knowledge and experience is not the best but the market in Montreal is very aggressive from what I am noticing and houses get sold in a matter of days. My wife and I just bought our second condo and renting the first one and that’s when we noticed market is not the easiest here and started thinking of investing abroad and you’ve peaked my interest with investing in central america.
@Account Closed, I have to agree with Mike that from an American's perspective it makes very little sense to invest in Montreal. There are probably a 100 american markets which would be easier to invest in. Every time I listen to a BP podcast I'm amazed at how easier it seems to be south of here.
@Account Closed
Montreal Market is on fire right now, prices are going up fast. It's a good idea for short term investment. Long term there's better return on some american market. Let me know if you're interested in investing here, I'm a full time flipper and I'm looking for investor.
Do NOT invest in Montreal. I had four properties between 2010 and 2019, and now currently have one left which I will continue to hold just because I’m tired of realizing losses in this city.
Between the taxes, poor building administration, heavily tenant-skewed laws, low influx of new residents, high supply and plenty of other avoidable and absurd issues, you will never have a piece of mind. Montreal, and perhaps Quebec as a whole, is not a good place for any type of investment. I never made a solid return there compared to the other properties in Toronto, NYC, Minneapolis, Atlanta and New Orleans ... nor has it been conducive on any level to accomplish projects or business initiatives there. You will either get stuck with a horrible tenant, disorganized/incompetent/borderline fraudulent building admin, useless lawyers, or simply laws that either work against you or a system that could care less about you as an investor.
Buy and flip if you want - with adequate research - but Montreal is not a place for the long game. You’re better off paying a premium in Toronto but most likely avoiding the incompetency, apathy and general lack of professionalism you will most certainly face if investing there. And I should caveat this whole post by saying I lived in Montreal for 8 years and love the city for everything else besides investing, settling or establishing a career in.
I'm sorry guys, but I couldn't disagree more with what most of you are saying... Yes Montreal is very hot and pricey right now, but the key to being a successful real estate investor in ANY market is to find REAL deals. When I say REAL deals, I mean REAL ones... Not the ones that your typical broker is sending your way. You have to work hard to find good deals. My team and I are talking to about 500 people per month to find one good deal. How many sellers are you guys talking to on a monthly basis and how many offers are you making ;)!? Don't get me wrong, it is very difficule like it is in any sizeable market. If it were easy, everybody would do it. When people say that it's impossible to make a good deal in Montreal because it's too expensive, it's like saying that no good deals can be found in NYC, Los Angeles, etc... I've made over 40 transactions in the last 5 years in Montreal and I've never lost a penny, so it's hard for me to agree when people say there are no deals, and I also know a lot of people who succeed even better than my team and I. Hope this helps!
I'm sorry guys, but I couldn't disagree more with what most of you are saying... Yes Montreal is very hot and pricey right now, but the key to being a successful real estate investor in ANY market is to find REAL deals. When I say REAL deals, I mean REAL ones... Not the ones that your typical broker is sending your way. You have to work hard to find good deals. My team and I are talking to about 500 people per month to find one good deal. How many sellers are you guys talking to on a monthly basis and how many offers are you making ;)!? Don't get me wrong, it is very difficule like it is in any sizeable market. If it were easy, everybody would do it. When people say that it's impossible to make a good deal in Montreal because it's too expensive, it's like saying that no good deals can be found in NYC, Los Angeles, etc... I've made over 40 transactions in the last 5 years in Montreal and I've never lost a penny, so it's hard for me to agree when people say there are no deals, and I also know a lot of people who succeed even better than my team and I. Hope this helps!
@Guillaume D. gets it. Know what I do at night? I walk neighborhoods with my gf, I talk to people out on their porches, I knock on doors of ****** looking properties and leave them my card. If you THINK for a second deal flow will come your way, news flash it won't. Like any market worth investing in, money is flowing in, the investments are not though so you need to find the deals the hard way. Hell if you find anything that needs under 500K cash investment and mortgage the rest, call me or @Guillaume D. and watch how fast well close :) You don't build doors sitting back and buying a few triplexes over a decade.
Want to see what happens when the PERFECT deal gets put out there for everyone to see? 5 plex in the Sud West
Asking price, 850K, heard it sold in multiple offers at 1.5M :)
Hi BP members
After reading the posts, I’m confused
I’m interested in investing in rental properties, but again couldn’t find a good deal that generates positive cash flow, unless short term rentals
So , what do you guys advice, look for another market, or can someone assist in finding cash flow generating properties
Thanks
I am exploring potential markets to invest in as I diversify my real estate holdings and I'm curious if it makes any practical sense to look into investing in Canada (specifically Montreal) from the USA? I'm unsure of the tax implications, how the language barrier would affect me, and whether that market is worth diving into.
Montreal is the nearest large Canadian city to me and I have a few friends there as well. I'm mostly interested in either BRRRR or Flips and I likely would buy cash - although I'm also unsure how I would refinance and cash out on a property.
Thanks for any info
If your from New York City I am sure most cap rates across the board are much higher being the reasoning why you want to explore abroad. Instead of making things complicated you should just explore other states in the US. Just the hassle with taxation and potential foreign tax. Evening try Buffalo which is still in NY state. Cap rates are in the 7-8s.
Its usually the opposite with Canadians investing in the US and not the reverse unless its a cottage where STR may come in play for income and land development.
Why Montreal and why not Toronto? In any event, if you're from NYC look within in NYC; close to NYC (tri-state area) or another state. I wouldn't go foreign unless i'm looking for a family vacation place like the Amalfi Coast in Italy where it can easily be rented or used as an AirBnB. NYC real estate appreciates and being from there, as I am too, you are familiar with the 5 Boroughs. Now, you may not find a high cash flow unless your down payment is large or you buy in cash but even if you break even each month you'll be ahead due to the appreciation.
Why Montreal and why not Toronto? In any event, if you're from NYC look within in NYC; close to NYC (tri-state area) or another state. I wouldn't go foreign unless i'm looking for a family vacation place like the Amalfi Coast in Italy where it can easily be rented or used as an AirBnB. NYC real estate appreciates and being from there, as I am too, you are familiar with the 5 Boroughs. Now, you may not find a high cash flow unless your down payment is large or you buy in cash but even if you break even each month you'll be ahead due to the appreciation.
Toronto is an automatic no no because there is a 15% foreign tax. So many opportunities in the US. No need to venture abroad