All Forum Posts by: Stephen Preston

Hi, I am Canadian and invest exclusively in the USA. Have flipped over 20 houses in the last 2 years and added 8 to my long-term hold portfolio. I have a good enough team down in Texas now where I can buy, renovate and flip a house without ever seeing it in person - this took a while to build though.

A few considerations:

1. Make sure to get a good cross border accountant. In the beginning, I was fined $10,000 from the IRS for not filing the proper forms in my first year of operations (I was using an American CPA who didnt know foreigners had to file this form) and luckily I found a good accountant who challenged this fine and got it forgiven. Trust me when I say its better to start out with the correct structure and team in place before you make the leap.

2. Speaking of correct structure, there are many options available to you. LLC, C Corp, LP etc. There is no one size fits all and depending on what you want to accomplish (flip and bring cash back to canada, leave funds in USA) and the volume you plan on doing will determine the right structure for you.

I started with an LLC 7 years ago based on advice from someone who didnt really know what they were talking about. LLC's are not recognized by the CRA and can lead to double taxation. I now use a C corp in Texas (owned by my Alberta Corp) and Texas Limited Partnerships.

3. If you are planning on buying and holding a good property management company is so VITAL. This is one thing I was able to get right from the start. I found a real estate investor who was starting a property management company - we spoke the same language and I gave him a shot. His company has done a phenomenal job managing my properties and that has had such an impact on my business - knowing that someone has my back and is watching over my properties. They are now one of the fastest growing property management companies in Houston.

Anyways, I could go on and on. Let me know if there is anything specific I can help you with. You are making a great decision to get involved in USA real estate.

Hi Sergey:

This is very possible and (in my oppinion) is one of the best ways to utilize RRSPs for good consistent returns. Lets face it - there arent a whole lot of exciting options when it comes to using registered funds for investment purposes but self directing your RSP and lending it out on real estate can be very fruitful.

My advice: Make sure to do your due diligence on any deal, make sure there is enough equity in the property so that if you have to foreclose you arent going to be out of pocket and lastly get a good real estate lawyer who is familiar with these kind of deals to help you with the process.

Goodluck!

Texas is a great marketplace to be a real estate investor! You have a ton of options including Texas Tax Deed Auctions which is how I got my start in real estate. 

Keep in mind that property taxes can be pretty high in Texas (2-3% of assessed value) which can really eat into cashflow for long-term holds.

Best of luck and you have come to the right place!

Of course! You can definitely make this happen. It may seem like a daunting task but if you break your learning down into chunks and set aside time everyday to learn you wont have a problem.

I flipped 24 houses in under 2 years while working full-time in private equity. Its all about creating systems and getting a really good team on board (Property managers, contractors, realtors etc.)

Don't let anything stop you!

All I know is they bombard my 800 number and leave robo voicemails - pretty annoying!