Real Estate Investor 路 Toronto, Ontario 路 Member since 2010 路 413 posts 路 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.
@Owen Brown yes I am. As a matter of fact, I just locked down a project馃コ. On a related note, I'm looking for private financing at 70% of ARV. Any pointers anyone?
@Arthur Abreu why not set it up within a Corp, and have net income taxed considerably lower. You can also structure it to pay yourself from you business as dividends or payroll. On the personal side it is considered self employment income but I would recommend speaking with an accountant, they are usually very familiar with situations like this and can best provide you tailored advise
@Arthur Abreu Check out the CRA website. For rentals, there is a specific form you fill out. You are taxed on all the income after expenses (utilities, interest, property taxes, repairs, etc). How much you are taxed, depends on your tax bracket.
Specialist 路 Kelowna, BC 路 Member since 2018 路 34 posts 路 15 votes
7y
@Yinka Abraham If you do not find a lender let me know and I may be able to help. It is harder to find private lenders in Sask and Man than Ont, BC or Ab though
Hi! I am Canadian but currently living in Connecticut. I have partners in Toronto and Nova Scotia. Financing has been a challenge and I have not been able to find lenders who will finance multi-family properties for a non-resident so I have had to pay cash. I would love to do more deals!
Hi! I am Canadian but currently living in Connecticut. I have partners in Toronto and Nova Scotia. Financing has been a challenge and I have not been able to find lenders who will finance multi-family properties for a non-resident so I have had to pay cash. I would love to do more deals!
I know people who lend to foreign nationals like us.. PM me