All Forum Posts by: Natasha Rooney

@Natasha Rooney@Natasha Rooney

just to be blunt:

1. OOS investing is much more difficult than advertised.  there are numerous recent threads on BP by folks who bought something because it looked nice, or an agent recommended it, and they didn't see it themselves and approach it with any skepticism.  they immediately got crushed.  examples:

Baltimore - a path to never-ending pain (biggerpockets.com)
Experience of OOS investing in Cleveland after 1.5 years. (biggerpockets.com)

so, if you're serious about a market - you need to go there in person. if you're not willing to do that, then don't invest there.

2. you're not going to cash flow in the first few years, in any market, period.  not in Alabama, not in California. think about a down payment, closing costs, light repairs, rent ready costs, commission to the property management company, then you fix a dishwasher, then in year 2 the furnace goes.  where is the cash flow?  i say this not to discourage you from investing, but to help set your expectations properly.

my recommendation is always to invest wherever you can be hands-on and in-person.  if your immediate market is too expensive, go a couple hours away.

hope this helps

What's up @Natasha Rooney!  What market are you currently in, and why no interest?

The main thing I am looking for in a market is the right team! Someone is making good money in every market. I am a biased fan of Chicago, Illinois, because of the awesome real estate community here.

Outside of just a good community, I love Chicago because:

1.  In the city, there is a plethora of old multi-family properties that need to be renovated at all different price points

2.  In the south suburbs, there are tons of great single-family cosmetic flips

We do have winter, high taxes, and crime, but like anything else there is pros & cons to everything.  

With the right team, you can be successful in any market...focus on networking and figure out where you might have a competitive advantage with some boots on the ground.

@Natasha Rooney How would having a map overview of a market, showing the average Property Class of each suburban city and urban Neighborhood help you with your decision?

The five most landlord-friendly states are:

1. West Virginia
2. Arkansas
3. Louisiana
4. North Carolina
5. Alabama

 Alabama

Alabama residents enjoy a low cost of living and a thriving economy. The state’s housing is also ranked as the fourth most affordable in the country.

Alabama currently has the second-lowest average property tax rate in the country at 0.4%, which helps investors keep more of the money they earn.

Hi Abdi, I have some friends I can connect you with, particularly a nationwide mortgage broker with great expertise on creative financing and investor dos and don'ts who could be good resources for you without pressuring you into anything.  Give me a shout and I'll connect you with Kyle.  Another business partner of mine is a marketing pro who helps investors anticipate which properties will book out well and which ones might struggle, provides some creative design tips too, if you're into STRs at all.  Both of them will answer any questions you might have without any judgment.  This is how we all learned!

Hi Abdi,

I am going to to try to hop on a call with you.  I was actually working in the investor real estate space for 3 years before I took the jump and did it myself.  Now I am on property #9 (that took 5 years).  

Follow Nathan Gesner's advice.  Break it down step by step and you will feel confident to move to the next decision.  

Do you want to Flip or Hold?

If you are holding, do you want to do Long term, Mid term, or Short term rentals?

What is your comfort level on construction - cosmetic, mid-level or gut to the walls?

I also agree with him that your Property Manager is the most important person on your team.  (And I am a realtor saying that).  They are the one that is going to protect your investment long term.

Depends on your deal! We want to have legal protection WHEN its applicable. For stock investments for instance, just invest directly. For partnerships, consider being a limited partner when you can. If your own real estate directly, a simple LLC will be more then enough to get started

Hey Natasha! 

In general if you are what is called a resident alien, you are going to be taxed on your world wide income. 

You want to be sure your classified for what is called a non resident alien. Basically means you live in Canada, but you invest in the USA. A non-resident alien for tax purposes is a person who is not a U.S. citizen and who does not meet either the “green card” or the “substantial presence” test as described in IRS Publication 519, U.S. Tax Guide for Aliens. 

Non-resident aliens are taxed only on their income from sources within the U.S. and on certain income connected with the conduct of a trade or business in the U.S, leaving your CA income alone! I work with a lot of foreign folks who invest in multiple countries or live abroad. If you have any more questions feel free to reach out! 

Hey Natasha,

That's awesome that you want to invest in the states!   I'm not a CPA but I have worked with a lot of out of the country investors over the years.  Here's an overview as well as my understanding of the tax implications.

I'll start with the US Tax implications:

A few other points to mention, a lot of the specifics here also depend on your legal structure e.g. LLC, sole member, direct investor, etc. There are a lot of attorneys/tax professionals that are familiar with Canadians investing in the states, so reach out to them and they'll be able to walk you through the process. If I can help with anything else, don't hesitate to reach out.

TL;DR:  You will likely need to pay taxes in both the U.S. and Canada, but the Canada-U.S. tax treaty provides mechanisms to avoid double taxation.  

Much success!

DG