Virtual Wholesaling: living in Canada and doing deals in the US

[Devon Rollison]

(Back ground on the situation before I show the lawyers response/conclusion) 

I am living in Canada and I'm trying to do my operational and legal due diligence before I go through with the disposition steps of virtual wholesaling which I have solely learned from people living in the US doing it state to state never personally being at the property. However my due diligence is purely focused on finding out what differs because I am in Canada trying to do it cross country and not living in the US doing it state to state... This is what a online attorney has told me (What do you guys think):

Lawyer: "It doesn't matter where you are. It matters where the property is".

Me: "it doesn't matter where you are. It matters where the property is" That is very very interesting... Are you telling me that being that I am in Canada across country, I can wholesale a property in Texas per say, the exact same as if I was living in Texas (and doing it all virtually without going to the property). 

There aren't any laws or anything I need to worry about because I am living in Canada doing it across country?...

Lawyer: There are no laws that I am aware of that would make any difference where you are, with the possible exception of tax laws that may require greater withholding or other documentation to complete the transaction. What matters, as I and others noted, is where the property is. The laws of the jurisdiction where the property is located are what matters, and you will need lawyer(s) licensed in the jurisdiction in which each property is located.

Me: Ok thank you so much that is the re assurance that I needed. So one final question to 100% clarify Teri. So the way I have learned to do virtual wholesaling is via people living in the US doing it state to state without ever personally being at the property and most time out of there state. So what you are telling me is that I can apply everything that they are doing/that I have learned and will continue to learn and get advice on, and I do not need to worry about ANY differences legally etc being that I am cross country not just cross state? (other then taxes of course)

Lawyer: If you've already been working remotely, I know of no reason why your personal location would change anything, other than, as stated, possible tax issues and additional documentation requirements.

[Bruce Lynn]

I think you face two complications.  One is getting documents notarized by a US notary.  You can do it in Canada at an Embassy and maybe a consulate if one is close to you.  If not that might present challenges.  We are starting to see some online notaries.  I think the law would state you have to be in the US to use one of them, but not 100% sure about that...you might check into that.   Don't need a notary to do the contracts, but for closings.   I guess if you 100% assign and don't double close you might be able to bypass this step.

#2 issue is FIRTA and withholding.   You're withholding might be more than your profit, so as a non-US citizen or resident you might have to pay to close and then file a tax return some time later to recover any excess tax payments.  The idea with this is as a non-tax filer normally, title company has to withhold X% of taxes based on the value of the property.  Total made up numbers, but let's say property is $100,000 so they withhold $25,000, but your spread is only $5000.  So you would have to pay the title company $20,000 to close, they send the IRS $25,000.  Maybe the taxes are only $1000 on your $5000 profit and you 6 months or a year later file a tax return the IRS would refund you at some point $24,000 for the over collection.   That doesn't make sense to me for most people.   I guess you could probably avoid this by just assigning contacts and not closing yourself if you can convince someone to send you the money for whatever fee you want to assign.