All Forum Posts by: Huong Luu

@Spencer Downing Suggest you prepare the breakdown of what the partnership will look at: ie 50-50% who puts in what, and who does what. How the rental income will be treated, expenses will be paid, and how cashcalls will be treated. Also prepare a sheet showing the return on investment by year 1-10. With this being your 1st and his as well, it is the blind leading the blind. Have a clause of '1st right to buy', how the value of the house will be determined if 1 of you want out, how much reserve will be kept back, etc. I would also suggest you look at what other assets you have that may be in harms way should something go wrong.

side question to this: Do you think rent control encourages renters to stay renters, thus making more houses on the market for investors? 

@Ashish Acharya Thank you for the reply. You are correct on the 1st point. 100% taxable. 

@Bjorn Ahlblad Thank you for the reply. This is Canadian taxes. 

Looking for some clarification on this. I was recently told by a financial adviser (who is not an active RE investor) that the capital gains on my rental property would be taxed at 100% and would not qualify for the capital gains exemption due to the fact that the property is under my personal name and is my primary income, thus active (or earned) income. Would appreciate any advice (besides talk to your accountant). Has anyone dealt with this before?   

Can someone who has experience or knowledge of Section 85 give insight to the effect of the heloc segment? If my existing mortgage has a heloc segment and the property is under my personal name, when I move the property to a corp under Section 85, will the bank (in this case, it is an A lender) still give me an heloc, or will that be moved into a 'new' mortgage segment under the corp or will I have to pay it off. Thanks in advance.   

@Daniel Rosa I know this is an old post and perhaps your question doesn't exist anymore. Is the property in Hamilton On? 

With my recent relocation to BC, I found a potential loophole (if you are in BC) that may allow you to make this transfer without the taxes. It doesn't sound easy to do as there are several conditions to meet. Here is the link for you to get some info about it.  ppt 05 exemption

I haven't spent any time looking for a similar loophole in Ont, so if you find 1, please share. 

See page 4 of 6, point 6:

The biggest learning for me was not understanding the difference between the mortgage options when I started out. I would sign up for and renew at the 5yr fixed. It was only years later that understanding the variable rate, that I knew I left money on the table. 

The other big learning was not increasing the rent by the allowable amount per year. The 1-2% adds up over time. 

Another big learning was thinking family would help/be at the same mindset about money, risk and work ethics. 

Everyone who commented gave you great advice. Just a few points for you to consider, as every coin has 2 sides:

1. Scale at your risk level, that means leverage at your risk level too. 

2. Having a great relationship with your tenants (if you are a small operator) can be a good thing. They are your customers. 

Good luck

If you are only looking to analysis, then you don't need to brother agents for that. You can find the property listing on MLS. You can contact the sellers agent directly for proformas.

If you are reaching out to agents, some may ask you to sign an 'exclusive work contact'. So you will have to be prepared to tell no.

To find out about those markets, there are many reports available on-line.

Good luck

@Gurjot Grewal A post like this will get you alot of attention. I will message you directly. 

Good luck.

Great for you to get into RE at 55. Many investors are going east as the price point is a lot more affordable then GTA. A few words of caution: Have you reviewed where you will be if your RE investments don't work out the way you want? Meaning the LOC still has to be paid back and could potentially mean you have to work longer. Prices are high due to COVID, and many people are buying with the "I have to get in now" without considering the time horizon.

Talk with your accountant to make sure you set up the Smith Maneuver properly. Learn how to analysis.

Good luck.