new investor

[Robin Cepeda]

hello,

New to bp from vancouver canada, im very excited about this site and all the helpful resources, I also have a few questions,

Is a canadian able to obtain financing in the usa?

Where are the best proporties for flipping?

Is there any forclosure websites in canada?

Thanks

[Roy N.]

@Robin Cepeda

Welcome to BP!   

Not all Canadian markets are hyper-inflated.  Here on the other coast, things are just merely pricey, but there are still fair deals to be had if you are patient.

When it comes to foreclosures in Canada things progress differently than what we have witnessed in the U.S.A. recently.  In Canada there are two primary ways in which a lender recovers mortgage debt:

Judicial sale - this is akin to what you have heard about in many us markets over the past few years.  A judicial sale is conducted under the guidance and control of the courts.  The lender applies to the court to seize and sell the property and the process involves a lawsuit against the borrower and other liable parties.   In a judicial foreclosure, the lender takes possession of the property, typically in exchange for extinguishing the borrowers obligations to the lender.   Judicial sale is conducted in BC, Alberta, Manitoba, Québec and Nova Scotia.

Power of Sale - allows the lender to force sale of a property without involving the court system.  The lenders right to sell the property is embedded in the mortgage contract itself and supported under provincial legislation.  In the power of sale scenario the borrower retains possession of the property throughout the sales process (lender does not need to seize the property).  The lender also has an obligation to sell the property at fair market value.  If the property sells for more than the outstanding mortgage debt, the borrower retains the balance.  Conversely, if the proceeds from the sale do not satisfy the entire mortgage balance, the borrower remains indebted to the lender for the shortfall.

In practice, both power of sale and judicial foreclosure properties are sold using real estate agents and are typically listed on MLS. Due to small size of most Canadian markets and the additional obligations under Power of Sale, properties are rarely sold at a deep discount as one sees in the U.S.A. {though we did purchase an exception last week}.

When it comes to borrowing in the U.S.A., the easiest path for a Canadian is to borrow from the U.S.A. subsidiary of their Canadian bank (TD, BMO, & RBC all have U.S.A. banking subsidiaries) as you can use your Canadian credit history. Next would be borrowing from local/regional banks/credit unions in the U.S.A. are where you are investing. This will be easier if you have a U.S.A. partner, but not impossible on your own. The lender may, or may not, rely on your Canadian credit history and it quite possible you will only have access to commercial mortgages (at their higher rates) and at a relatively conservative LTV (50 - 65%). Your third avenue of borrowing in the U.S.A. would be private lenders, or, if borrowing short term, hard-money lenders (HMLs). Access to private money is relation-based. The better a lender knows you and/or your work product, the more probable s/he is to lend to you. Hard-money lenders are going to lend based on the asset (property) securing the debt (which may not be the same property for which the loan is being extended). Private money and {definitely} HMLs come at a higher cost.