All Forum Posts by: Oren K.

Just to add another brand to the list; Peerless. When I purchased a MF ~ 7 years ago, it had a old inefficient 1.2MM BTU system  that was falling apart. Replaced it with 2 x 399K BTU 4 stage Purefire boilers; More efficient heat exchanger, multiple burner stages and redundancy so if one boiler goes down, the other one still keep the property warm. There is much less possibility of freezes and pipe bursts. Turns a true emergency to something urgent but manageable.

As well, I very much agree with the comments that the installer is at least (if not more) as important as the equipment. As I have heard from many plumbers, electricians and other trades; An excellent tech / installer can do good work with less then great equipment, a bad tech / installer can take the best equipment and screw it up.

One final note, it may be worth checking where replacement parts can be sourced. Had to deal with 4 year old 10 ton Lennox AC evaporator coil replacement due to damage (i.e. not covered). Lennox are the only source and price accordingly.

It very much depends on if you have 1 - less then 10 units or more than 10 units and if they are in a single building / all near each other or spread out. The spread out, 10 or less units  manager legitimately charge more (time is money) and are basically doing house maintenance. Over ten units and in one or two buildings charge a bit less and are dealing with more commercial level of infrastructure (e.g. boilers, roof, drains, fire systems, etc.).

At the smaller end, there all kinds out there that are more or less reputable. Never worked with any of that type.

At the larger end, I have been quite happy with the company I have worked with for the past 7 years. Contact me with how many units your have, where they are (generally) and your direct email. I would be happy to make an email introduction to the owner.

Just another thought.

Not clear if you are starting with a vacant (or nearly vacant) property. If so filling it is a high priority. Having said that, you don't want to water down the qualification process. A tenant that qualifies at $700, may not qualify at $1,000 (nearly 50% increase!).

I would do one year leases and offer the graduated scale up front so you can qualify them based on the top amount, they understand the 'discount' they are getting as a 'move-in special'. They save $1,000 (making it up) in the first year and you get to fill the property more quickly.

Good luck.

Hi All,

To all you accountants out there - My understanding of the implications are basically as follows;

From the buyers side, they avoid some of the costs (e.g. conveyance) as there are just legals. Still need to do all inspections / normal DD. The additional risks are things like pending legal actions that you need to do more DD on

From the sellers side, again potentially some avoidance of costs (e.g. Point of Sale inspection) but also on the tax side (assuming the property is in an Entity), do not get to use the un-depreciated value or if there are any income loses to shield any capital gains.

Do I have this about right or are there other important considerations.

Oren

Sam,

Again - Despite the expense, urge you to at least have a consultation with an expert. Your tax rate assumptions are way LOW.

In Canada, rental collections is considered a passive income and is taxed at a higher rate then an 'active' business income.

You either need to do a lot more reading or spend the $ to speak to someone knowledgeable.

Oren

Sam,

You will find any number of posts on BP with Canadians buying in the US and asking for advice. Not so often, the other way around.

I would urge you to find / hire a good CA that knows both US & Canadian taxes. Not only are you buying across an international borders but you also have partnership issues to consider. There may be multiple reporting / filing (CRA & IRS) requirements.

This is not something that you want make a mistake with upfront and find the problem later. It can get very expensive.

Oren

@Clarence Gong - As has been mentioned a couple of times, you do not need an ITIN to get an EIN. An EIN application is a single page application for which you will need your LLC or C-Corp info. May take a couple of weeks or a month, but nothing terrible. Just remember to plan ahead of when you actually need it. Your US accountant / lawyer should be able to guide you.

Also, you do not need an ITIN immediately. The IRS will issue you one automatically when you file your first tax return. So, just get the accountant to file return at the appropriate time. Why spend the extra $ to get one early if you don't need it.

Oren

@Chris Green,

As a Canadian you do not get an SSN. When you file your first US tax return, you will be issued an Individual Tax Identifier Number (ITIN). Unfortunately, the US credit rating companies (e.g. Transunion, Equifax) do not provide a credit score for people with an ITIN. You can have credit cards, residence, phone lines, etc. for years with no lates or defaults but still no credit score.

Unfortunately @Mike Lambert is correct that while there are Canadian banks that do provide loans for US investing, they come with significant limitations. Similarly, US lenders are very restrictive even if they are willing to consider lending to Canadians since they  are Non-Resident Foreign Nationals. Basically, they don't want to take the risk that if things don't go as planned, having to chase you across the border.

Smaller more local banks may be more flexible if you are buying 'small' properties but if you are looking for a mid-sized (250K - 2M) commercial loan - it can be extremely difficult.

Good luck - Oren

It also depends on what kind of product you want managed. If you are holding a few single family homes, some PM's will not touch it (even if they are Class A).

The company I work with in Cleveland runs ~1000 units so qualifies as 'big' as defined by the OP. Having said that, they focus on mid size (>10 units) multifamily or clustered single family. They will NOT take on a client that has 1 or 2 single family home.

Even though they are 'big', when I first started to work with them, I was not satisfied with the level of monthly reporting and asked for some customized weekly reports. Now 4 years later, they are still producing these reports for me. As well, I can and do speak to both the feet on the ground PM responsible for my property regularly. Also, if I have any questions regarding expenses, rent roll, etc - I can and do speak to the controller and other staff without any problem.

They are responsive (to tenants and me), flexible but not magicians.  Anyone that wants a referral can DM me for more information.

Oren

There are several challenges to building US credit score as a non-resident foreign national. 

The primary one, I think, is that the simple fact that the agencies (Transunion, Equifax, etc) simply don't track you as a person unless you have a US S.I.N. You can file tax returns for as many years as you like, get US based credit cards, US consumer credit (e.g. Macys, LOC, etc), even own a home but an ITIN simply is not tracked in their systems.

So lets assume that you find a lender to lend on a commercial property (retail, multifamily, etc) and you agree to personal guarantee (there are programs / lenders out there). All goes well and everything is paid on time. At best, the LLC / C-Corp gets a credit rating but not you personally since 'you' did not take out the loan.

If there is anyone on BP that as a non-resident foreign national has found a way around this or has found any way to successfully built a US credit rating, I would love to hear that story.

Perhaps this market segment is an opportunity for one of the rating agencies but it would be such a small portion of their business, I don't think it would be worth their time / effort.

Oren