Real Estate Investor · Toronto, Ontario · Member since 2010 · 413 posts · 114 votes
13y
Tim C. Financing is still difficult. Personally all my financing is from the private sector. This allows me to continue to purchase without any road blocks or jumping through hoops with banks.
Now if you do want to go conventionally, Canadians can get financing through Canadian banks who have US Affiliates (Example:BMO bank and Harris Bank) There are restrictions and guidelines to obtaining financing this way, but if you do manage you can get a great rate. Also down payments can range from 35-50% depending on the situation.
90% of Canadians either use Cash or leverage off Canadian properties/Line of Credits. With low interest rates it makes it appealing but remember that you will be losing a few points everytime you have to exchange dollars to pay down Canadian Debt.
I suggest not to hold in your personal name, it's a invitation to disaster with liability. I have in the pass, but strongly suggest some kind of structure. Buying in an LLC can be done if you elect the LLC just as a holding company and not an actual entity which pulls income. Usually set up with a C-corp or other entity is best. The reason for this is Canada doesn't recognize LLC and it triggers double taxation.
I normally use the structure above or some form of Partnership. Partnerships are great but general partners are subject to liability, so proper protection is still needed.
At the end of the day you should definitely sit down with a cross-border specialist. Everyone's situation and net-worth is different. I am not a accountant and any info given is just for education purposes and should not be used as legal advice**
As for withholding, there are restrictions and you may be subject to withholding. You can be exempt if the value is under 300,000 and buyer is owner occupied. But if not you will have to file a 8288-B form. If no form is filed the IRS will kindly hold onto your money until Taxes are filed. They are just that nice.
Involved In Real Estate · Toronto, Ontario · Member since 2012 · 10 posts · 1 vote
13y
Im an investor in Toronto, both flips and income properties. The market in TO has become increasingly difficult due to low supply. This has forced most decent homes to end up going in bidding wars, which as an investor is a nightmare. Anyone else facing this problem and had success around it?
We have begun to look at investments in Phoenix, Austin and Atlanta, but on a recent trip we saw a lot of potential in flips. The idea of managing one remotely and the international struggles seem a bit daunting though....anyone have experience and advice on this?
Austin, TX · Member since 2011 · 119 posts · 46 votes
13y
The Austin market has really low inventory right now as well. Most properties are seeing multiple offers with bidding wars on the really good deals. Your best bet for remote flips is to partner with an experienced rehabber in the area and split the profits.
Real Estate Investor · Toronto, Ontario · Member since 2010 · 413 posts · 114 votes
13y
I live in Toronto. Been investing in Atlanta market for 2 plus years. I focus on flips and rentals in the Atlanta market. I handle most of my business from Toronto, but I like to make it out to Atlanta every 4-5 weeks. I like to be there on closing to oversee the rehabs.
At the moment I am trying to purchase an apartment. We'll see how it goes.
Atlanta, GA · Member since 2013 · 47 posts · 2 votes
13y
Hi Mike,
As a foreigner have you been able to get any financing for your properties and also do you buy in LLC or your own name? Are you subject to 10% withholding tax when transferring between titles between individual name and LLC?
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
13y
Canadians! I'm not in Canada, but I'd say most of the investors I talk to and work with are from Canada. The comment is true about having a trusted contact in the states to help you out. There are easy ways to take advantage of the US market, and more than anything make sure your tax and entity structuring is in place correctly. Canadians shouldn't use LLCs, oddly enough. Some weird quirks and twists with those, but easy workarounds.
Atlanta has definitely been a hot market, but Houston is probably the next biggest one for those hoping for warm-weather locations. Chicago is another, but some want away from the cold.
But the biggest place I run into Canadians...are you ready, are you ready?...Nicaragua. Investors' paradise, amazing emerging market, tropical weather.
Involved In Real Estate · Toronto, Ontario · Member since 2012 · 10 posts · 1 vote
13y
Im wondering...as you partner with the locals, how are you setting the partnership up. Are you just acting as a financial investor and splitting profits hoping for a certain ROI? Or are you more active in it and working things out in another way? Any advice? I know a great real estate agent in Atlanta, but she doesn't do reno's or property management, so I'm a little nervous to work on a partnership there.
Real Estate Investor · Toronto, Ontario · Member since 2010 · 413 posts · 114 votes
13y
Tim C. Financing is still difficult. Personally all my financing is from the private sector. This allows me to continue to purchase without any road blocks or jumping through hoops with banks.
Now if you do want to go conventionally, Canadians can get financing through Canadian banks who have US Affiliates (Example:BMO bank and Harris Bank) There are restrictions and guidelines to obtaining financing this way, but if you do manage you can get a great rate. Also down payments can range from 35-50% depending on the situation.
90% of Canadians either use Cash or leverage off Canadian properties/Line of Credits. With low interest rates it makes it appealing but remember that you will be losing a few points everytime you have to exchange dollars to pay down Canadian Debt.
I suggest not to hold in your personal name, it's a invitation to disaster with liability. I have in the pass, but strongly suggest some kind of structure. Buying in an LLC can be done if you elect the LLC just as a holding company and not an actual entity which pulls income. Usually set up with a C-corp or other entity is best. The reason for this is Canada doesn't recognize LLC and it triggers double taxation.
I normally use the structure above or some form of Partnership. Partnerships are great but general partners are subject to liability, so proper protection is still needed.
At the end of the day you should definitely sit down with a cross-border specialist. Everyone's situation and net-worth is different. I am not a accountant and any info given is just for education purposes and should not be used as legal advice**
As for withholding, there are restrictions and you may be subject to withholding. You can be exempt if the value is under 300,000 and buyer is owner occupied. But if not you will have to file a 8288-B form. If no form is filed the IRS will kindly hold onto your money until Taxes are filed. They are just that nice.
Property Manager · DeLand FL · Member since 2012 · 860 posts · 243 votes
13y
I was surprised how many canadians are looking to invest in the states, and their always surprised at how much cash flow certain areas can get them vs canada. Being so close to the border, I've talked with quite a few.
Investor · Toronto, ON · Member since 2013 · 29 posts · 2 votes
12y
Toronto here, I'm pretty much in the same situation as @Allison Shepstone Properties in Toronto are increasingly difficult, it requires a lot of capital. I currently have 2 properties in Toronto, but I'm now looking into in the Florida market while there are still a few properties left that can make decent revenue. While I do have a local contact there and a potential partner, I'm still apprehensive about managing a project that I cannot visit anytime I want/need to.
Investor · Brooklyn, NY · Member since 2013 · 254 posts · 28 votes
12y
Is is really worthwhile for Canadians to invest in the US?
FIRPTA Withholding - Withholding of Tax on Dispositions of United States Real Property Interests - it sounds like you lose 10% right off the top when you sell.
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
12y
@Mary Joe:
This is true, but some of the taxes withheld by the IRS are rebated on our Canadian taxes due to tax treaties between the two countries. You would receive similar treatment as an U.S.A. Citizen investing in Canada.
Now ... is it really worthwhile ... in some instances, yes.
We are looking at a 6-unit property in Texas with scheduled rent of $3150/mth, {claimed} operating expenses of $1484/month with an asking price of $180K.
We just purchased a 5-unit property here at home with scheduled rent of $3390/month {$4250/month once we get rents to market and bring a 6th unit on-line}, operating expenses of $1584/month; and the asking price was $389,900
Homeowner · surrey, British Columbia · Member since 2013 · 98 posts · 8 votes
12y
I live in surrey BC. I currently have a house with a rental suit and sold my rental property on Vancouver Island. looking to do a few fix and flips to raise capitals for buy and hold in surrey & maple ridge but its not an easy market to find properties or at least for me.
Real Estate Broker · Puerto Vallarta, Jalisco/Nayarit · Member since 2013 · 75 posts · 5 votes
12y
Hi Shahriar,
I'd love to talk to you about your goals. I am also interested in investing in Surrey - and am licensed - so I may be able to help with searches etc. I look forward to connecting with a fellow Canadian!
I agree, the numbers are attractive, the distance is the issue. I have family in the area who are willing to help guide us w/r to neighbourhoods and would check on a property periodically for us (to keep the PM on her/his toes). I just have not made piece with owning property 2000 miles away ... but 15+% cash on cash will help me get over that.
Investor · Stouffville, Ontario · Member since 2011 · 213 posts · 65 votes
12y
I live just north of Toronto in Newmarket. I invest in Durham Region, areas in York Region, Hamilton and Barrie.
Note: When I look at the numbers it only tells 50% of the story. The rest is determined by the area and local governments. When I have bought strictly on the numbers it is usually when the area is not great. The local Government is doing nothing to attract new business, new infrastructure and new transportation. I want an area where jobs are being created and people are moving to.
Los Angeles, CA · Member since 2013 · 66 posts · 18 votes
12y
@Gary McGowan have you looked at the student housing market in London? It's an area I became interested in while living there for about 8 months and would be interested to hear any thoughts on it.
toronto, ON · Member since 2013 · 27 posts · 4 votes
12y
I live in Toronto and I feel that Canada is one of the best places to invest in RE. We can take more value of our property and this is also a very nice place to live. I have recently made a deal in Condos in Burlington and looking forward to take the possession.
Investor · Stouffville, Ontario · Member since 2011 · 213 posts · 65 votes
12y
@Greg Rulfs I have not looked too deep into student rentals. I do know a few investors that do. Note: It is very difficult to get financing for students rentals at the moment as there are only a few lenders that will do it.
There is one larger building in London that is for sale. It is close to Fanshawe College and has 56 beds with a cap rate of approx 7.5%
Vancouver, British Columbia · Member since 2014 · 10 posts · 2 votes
12y
i live in vancouver b.c and own 2 sfh's in atlanta. We're fortunate to have a good contractor in atlanta. We feel very fortunate because we were ripped off many times by contractors and realtors until we found her. Our problem now is that we need financing to purchase more homes. Does anyone in here know of a person or group of people that offer financing at a good rate to canadians.
Looking for small multis that need some rehab to fix and hold.