Bank accounts, tax & legal entities for Canadian investors in US

[Suzanne P.]

After a number of Joint Ventures and gap lending deals in Canada and the US, my journey towards becoming an active flip investor in the US continues. I just completed an asset protection conference in the US and there are several key issues affecting Canadian flip investors in the states:

1. Proper entity selection for liability protection and to avoid double taxation

2. Ability to open a US corporate bank account

3. Access to HML financing

Regarding point 1: In our seminar we were taught that the proper legal structure for Canadians is a C-Corp, a Limited Partnership and a number of LLCs, each of which would hold one flip property. I am not quite sure how the C-Corp is related to the LP, but the LP apparently is supposed to hold the LLCs. Apparently, if the LLCs were owned directly by the C-Corp this would result in double taxation since the CRA (Canada Revenue Agency) does not recognize LLCs as flow-through entities for double taxation (if I remember correctly). What is the proper corporate setup for Canadian investors in order to avoid double taxation yet still have asset protection for multiple flip projects?

Regarding point 2: Many of my Canadian investor colleagues have faced the same issue when it comes to opening a US bank account. Through a real estate training academy we were set up with a Wyoming C-Corp with a nominee structure for privacy and asset protection. However, that appears to create a problem for bank accounts as BMO Harris does not like the anonymous nature of these accounts while Wells Fargo, on the other hand, has a problem with the Wyoming business address that was provided by the law firm that set up the C-Corp for us. What is the best and easiest way to get a corporate bank account set up for a Canadian investor?

Regarding point 3: Some of my Canadian colleagues have indicated that they are talking with US hard money lenders and initially hearing that it is not a problem that they are located in Canada. Once they move forward towards doing an actual deal some of these Canadian investors experienced serious issues in obtaining hard money loans and in some cases were unable to close the deal. What is the situation with Hard Money Lenders and out-of-country investors (particularly Canadians)? Are they less willing to extend HM loans to Canadians or at worse conditions? If so, what is the best way to find an HML that will extend good conditions to Canadians?

Any input regarding Canadian-based real estate investors, HMLs, legal / tax / banking issues would be greatly appreciated.