New member from Canada interested in the US Market!

[Francis Faucher]

Hi everyone, my name is Francis. I'm from Montreal, Canada. 

I've been investing in real estate for more than a decade now. Worked on most asset classes in Canada (ground-up dev, multifamily, single-family homes, hotels, commercial properties, industrial, etc). Even launched and managed several real estate funds.

I specialize in various aspects of commercial real estate investment, like market analysis, financial modeling, debt modeling, risk management, portfolio optimization, etc. 

Why the US market and not stick to Canada's market ? Well, the list is really long. Simply put, there's so much difference economically wise, politically wise (depending on states), financially wise and ease to operate, even remotely. 

For now, I sort of want to start "small" and I'm looking to build a portfolio of single family homes in areas with good price-to-rent ratio where there's good cash flow and low price. I've looked at several sectors like Birmingham AL, Memphis TN, and several other. I'd love to have your input on these market and other market you would recommend. Also looked for Florida's market (we did some land entitlement project in the past over there).

If you also have good direct lender for foreigners I would appreciate the referral. I plan to buy, rehab and refinance. The acquisition will most likely be 100% cash, as well as rehab (simply because I want to make cash offers and be able to close in a couple days). 

I would also like to have your opinion in terms of structure. I use to do business via a C Corp, but because of the FAPI rules, the tax deductions have been lowered to 1.9x instead of 4x. So, to reduce overall taxes and to avoid double taxation, I think I should do it via an LLC that flows through directly to me. But then, some would argue that instead of LLCs (costly), I should hop for an Umbrella Insurance.

I'm starting to build my network in the US, so feel free to connect, I'd be more than happy to chat! 

Thanks!

Francis

[Jordan Ray]

Quote from @Francis Faucher:

Hi everyone, my name is Francis. I'm from Montreal, Canada. 

I've been investing in real estate for more than a decade now. Worked on most asset classes in Canada (ground-up dev, multifamily, single-family homes, hotels, commercial properties, industrial, etc). Even launched and managed several real estate funds.

I specialize in various aspects of commercial real estate investment, like market analysis, financial modeling, debt modeling, risk management, portfolio optimization, etc. 

Why the US market and not stick to Canada's market ? Well, the list is really long. Simply put, there's so much difference economically wise, politically wise (depending on states), financially wise and ease to operate, even remotely. 

For now, I sort of want to start "small" and I'm looking to build a portfolio of single family homes in areas with good price-to-rent ratio where there's good cash flow and low price. I've looked at several sectors like Birmingham AL, Memphis TN, and several other. I'd love to have your input on these market and other market you would recommend. Also looked for Florida's market (we did some land entitlement project in the past over there).

If you also have good direct lender for foreigners I would appreciate the referral. I plan to buy, rehab and refinance. The acquisition will most likely be 100% cash, as well as rehab (simply because I want to make cash offers and be able to close in a couple days). 

I would also like to have your opinion in terms of structure. I use to do business via a C Corp, but because of the FAPI rules, the tax deductions have been lowered to 1.9x instead of 4x. So, to reduce overall taxes and to avoid double taxation, I think I should do it via an LLC that flows through directly to me. But then, some would argue that instead of LLCs (costly), I should hop for an Umbrella Insurance.

I'm starting to build my network in the US, so feel free to connect, I'd be more than happy to chat! 

Thanks!

Francis

Hey Francis! Welcome to BiggerPockets & SFH Investing! Thats pretty awesome you have experience investing in so many different asset types! SFH Investing is pretty awesome in Memphis TN because of how easy it is compared to other markets to land solid BRRRR deals! My local lender I use in Memphis is very familiar with lending to foreigners with hard money! They are Memphis's finest 100% purchase & rehab hard money lender and also WILL NOT let you buy a bad deal! Since your planning to pay cash, if you use hard money you can spread your money out to multiple assets in a short amount of time faster, however if you pay cash you can have better numbers and make higher offers and of course get better deals (just wont be as fast to scale since your money will be locked up for seasoning). As far as your tax questions, I would personally refer you back to your tax advisor or refer you one if you need it. I like to personally use an LLC for my investing but it can be different if you are in a higher tax bracket so you would probably need a tax professional for strategy! Let me know if I can help you with anything in Memphis or North Mississippi!

[Francis Faucher]

Quote from @Jordan Ray:

Quote from @Francis Faucher:

Hi everyone, my name is Francis. I'm from Montreal, Canada. 

I've been investing in real estate for more than a decade now. Worked on most asset classes in Canada (ground-up dev, multifamily, single-family homes, hotels, commercial properties, industrial, etc). Even launched and managed several real estate funds.

I specialize in various aspects of commercial real estate investment, like market analysis, financial modeling, debt modeling, risk management, portfolio optimization, etc. 

Why the US market and not stick to Canada's market ? Well, the list is really long. Simply put, there's so much difference economically wise, politically wise (depending on states), financially wise and ease to operate, even remotely. 

For now, I sort of want to start "small" and I'm looking to build a portfolio of single family homes in areas with good price-to-rent ratio where there's good cash flow and low price. I've looked at several sectors like Birmingham AL, Memphis TN, and several other. I'd love to have your input on these market and other market you would recommend. Also looked for Florida's market (we did some land entitlement project in the past over there).

If you also have good direct lender for foreigners I would appreciate the referral. I plan to buy, rehab and refinance. The acquisition will most likely be 100% cash, as well as rehab (simply because I want to make cash offers and be able to close in a couple days). 

I would also like to have your opinion in terms of structure. I use to do business via a C Corp, but because of the FAPI rules, the tax deductions have been lowered to 1.9x instead of 4x. So, to reduce overall taxes and to avoid double taxation, I think I should do it via an LLC that flows through directly to me. But then, some would argue that instead of LLCs (costly), I should hop for an Umbrella Insurance.

I'm starting to build my network in the US, so feel free to connect, I'd be more than happy to chat! 

Thanks!

Francis

Hey Francis! Welcome to BiggerPockets & SFH Investing! Thats pretty awesome you have experience investing in so many different asset types! SFH Investing is pretty awesome in Memphis TN because of how easy it is compared to other markets to land solid BRRRR deals! My local lender I use in Memphis is very familiar with lending to foreigners with hard money! They are Memphis's finest 100% purchase & rehab hard money lender and also WILL NOT let you buy a bad deal! Since your planning to pay cash, if you use hard money you can spread your money out to multiple assets in a short amount of time faster, however if you pay cash you can have better numbers and make higher offers and of course get better deals (just wont be as fast to scale since your money will be locked up for seasoning). As far as your tax questions, I would personally refer you back to your tax advisor or refer you one if you need it. I like to personally use an LLC for my investing but it can be different if you are in a higher tax bracket so you would probably need a tax professional for strategy! Let me know if I can help you with anything in Memphis or North Mississippi!

Hey Jordan,

Thanks for the info!

we will definitely talk next week. I’m wondering about your lender that is doing 100 acquisition and 100 rehab, first time I would see someone do that, but I’m curious. 

Also, for the structure, yes, I already spoke with several CPAs. Usual structure they recommend is the LLC and LP structure with a C Corp or LLC as the GP and myself as the LP to avoid double taxation. I’m wondering if it’s not a better idea simply to buy in my own name, have an Umbrella Insurance in case of lawsuit, then get a DSCR loan. 

Looking forward to our meeting!

Thanks,

Francis

[Mike Lambert]

Hi Francis, welcome to BP. I just sent you a DM because I think we have a few things in common. Mike

[Manny Vasquez]

Francis - Welcome to the BP community!  I would highly suggest you look into Southern California, specifically, the Palm Springs / Coachella Valley area of Southern California. Why?  We have a ton of great people from Canada that invest in this area.  Most of the Snowbirds hail from British Columbia, Alberta and Saskatchewan and they flock (no pun intended) this area from October - May (to escape the harsh winter months in Canada).  This is a great place to invest with many golf courses (over 100 golf courses here) and many other amenities that cater to Snowbirds.  I have a property in this area and I plan on continuing to invest here.  Good luck and let me know if you have any questions!

[Jordan Ray]

Quote from @Francis Faucher:

Quote from @Jordan Ray:

Quote from @Francis Faucher:

Hi everyone, my name is Francis. I'm from Montreal, Canada. 

I've been investing in real estate for more than a decade now. Worked on most asset classes in Canada (ground-up dev, multifamily, single-family homes, hotels, commercial properties, industrial, etc). Even launched and managed several real estate funds.

I specialize in various aspects of commercial real estate investment, like market analysis, financial modeling, debt modeling, risk management, portfolio optimization, etc. 

Why the US market and not stick to Canada's market ? Well, the list is really long. Simply put, there's so much difference economically wise, politically wise (depending on states), financially wise and ease to operate, even remotely. 

For now, I sort of want to start "small" and I'm looking to build a portfolio of single family homes in areas with good price-to-rent ratio where there's good cash flow and low price. I've looked at several sectors like Birmingham AL, Memphis TN, and several other. I'd love to have your input on these market and other market you would recommend. Also looked for Florida's market (we did some land entitlement project in the past over there).

If you also have good direct lender for foreigners I would appreciate the referral. I plan to buy, rehab and refinance. The acquisition will most likely be 100% cash, as well as rehab (simply because I want to make cash offers and be able to close in a couple days). 

I would also like to have your opinion in terms of structure. I use to do business via a C Corp, but because of the FAPI rules, the tax deductions have been lowered to 1.9x instead of 4x. So, to reduce overall taxes and to avoid double taxation, I think I should do it via an LLC that flows through directly to me. But then, some would argue that instead of LLCs (costly), I should hop for an Umbrella Insurance.

I'm starting to build my network in the US, so feel free to connect, I'd be more than happy to chat! 

Thanks!

Francis

Hey Francis! Welcome to BiggerPockets & SFH Investing! Thats pretty awesome you have experience investing in so many different asset types! SFH Investing is pretty awesome in Memphis TN because of how easy it is compared to other markets to land solid BRRRR deals! My local lender I use in Memphis is very familiar with lending to foreigners with hard money! They are Memphis's finest 100% purchase & rehab hard money lender and also WILL NOT let you buy a bad deal! Since your planning to pay cash, if you use hard money you can spread your money out to multiple assets in a short amount of time faster, however if you pay cash you can have better numbers and make higher offers and of course get better deals (just wont be as fast to scale since your money will be locked up for seasoning). As far as your tax questions, I would personally refer you back to your tax advisor or refer you one if you need it. I like to personally use an LLC for my investing but it can be different if you are in a higher tax bracket so you would probably need a tax professional for strategy! Let me know if I can help you with anything in Memphis or North Mississippi!

Hey Jordan,

Thanks for the info!

we will definitely talk next week. I’m wondering about your lender that is doing 100 acquisition and 100 rehab, first time I would see someone do that, but I’m curious. 

Also, for the structure, yes, I already spoke with several CPAs. Usual structure they recommend is the LLC and LP structure with a C Corp or LLC as the GP and myself as the LP to avoid double taxation. I’m wondering if it’s not a better idea simply to buy in my own name, have an Umbrella Insurance in case of lawsuit, then get a DSCR loan. 

Looking forward to our meeting!

Thanks,

Francis

Awesome! I see you booked! Looking forward to it! Happy Easter in the meantime! Talk soon!

[Francis Faucher]

Quote from @Mike Lambert:

Hi Francis, welcome to BP. I just sent you a DM because I think we have a few things in common. Mike

 Thanks Mike! Perfect, let's chat soon!

[Francis Faucher]

Quote from @Michael Taylor:

Hi Francis!
I just sent a DM/Connect. We are a Direct Lender and process, underwrite, approve, close, and fund diverse DSCR programs.

Specialist in Foreign National DSCR. No seasoning in buying under a new LLC. First Time Foreign National Buyer in the US, No Problem!

We can issue a Buyer Certificate of Preapproval letter as a US or Foreign National DSCR Buyer upfront and Prequalify DSCR properties in advance.

Let's talk!  

Michael Taylor | SVP | www.NonQM123.com

 Great to connect Michael. We should definitely chat! Thanks, Francis

[Francis Faucher]

Quote from @Manny Vasquez:

Francis - Welcome to the BP community!  I would highly suggest you look into Southern California, specifically, the Palm Springs / Coachella Valley area of Southern California. Why?  We have a ton of great people from Canada that invest in this area.  Most of the Snowbirds hail from British Columbia, Alberta and Saskatchewan and they flock (no pun intended) this area from October - May (to escape the harsh winter months in Canada).  This is a great place to invest with many golf courses (over 100 golf courses here) and many other amenities that cater to Snowbirds.  I have a property in this area and I plan on continuing to invest here.  Good luck and let me know if you have any questions!

 Thanks Manny for the comment! I've looked at California's market, and it looks a lot like the Canadian market, where the laws are made to protect the tenants and are not landlord friendly. Correct me if I'm wrong of course!

I personally think it's an awesome place to visit and spend some time, but to invest, I've heard the opposite. Maybe you can share something I missed!

Thanks,

Francis

[Manny Vasquez]

Thank you Francis! You are right in that California is a “tenant-friendly” state. And yes, there are other states that are more landlord friendly and may offer cheaper prices and taxes. But as an experienced agent and investor (I own several properties across Los Angeles, Orange, Riverside and Kern Counties), I can tell you that no state beats California for appreciation and rental prices. I wouldn’t have invested here if this weren’t true. One big reason is the fact that if California were a country it would be the 5th highest economy in the world. This means a lot of opportunities rolled up into one state. I understand that California may not be for everyone, especially if it’s outside their affordability (careful with most of the naysayers, these are usually people who don’t own or can’t afford to invest here) I also understand that there are deals everywhere and one must feel comfortable in their chosen area of investment. Nonetheless, good luck in your investment journey!

[Francis Faucher]

Quote from @Manny Vasquez:

Thank you Francis! You are right in that California is a “tenant-friendly” state. And yes, there are other states that are more landlord friendly and may offer cheaper prices and taxes. But as an experienced agent and investor (I own several properties across Los Angeles, Orange, Riverside and Kern Counties), I can tell you that no state beats California for appreciation and rental prices. I wouldn’t have invested here if this weren’t true. One big reason is the fact that if California were a country it would be the 5th highest economy in the world. This means a lot of opportunities rolled up into one state. I understand that California may not be for everyone, especially if it’s outside their affordability (careful with most of the naysayers, these are usually people who don’t own or can’t afford to invest here) I also understand that there are deals everywhere and one must feel comfortable in their chosen area of investment. Nonetheless, good luck in your investment journey!

 Thanks Manny for your  input! If ever I'm interested in California's market, I'll make sure to contact you!

[Ugo O.]

Hey Francis, I am in a similar position, except I am just starting my investment journey after a lot of research and studying, but want to go straight to the US market. I am also a Canadian who is looking to invest in the US. 

Would love to reach out to you and see how you are progressing

[Andrew Syrios]

Welcome aboard Francis!

[Peter Mckernan]

Quote from @Francis Faucher:

Hi everyone, my name is Francis. I'm from Montreal, Canada. 

I've been investing in real estate for more than a decade now. Worked on most asset classes in Canada (ground-up dev, multifamily, single-family homes, hotels, commercial properties, industrial, etc). Even launched and managed several real estate funds.

I specialize in various aspects of commercial real estate investment, like market analysis, financial modeling, debt modeling, risk management, portfolio optimization, etc. 

Why the US market and not stick to Canada's market ? Well, the list is really long. Simply put, there's so much difference economically wise, politically wise (depending on states), financially wise and ease to operate, even remotely. 

For now, I sort of want to start "small" and I'm looking to build a portfolio of single family homes in areas with good price-to-rent ratio where there's good cash flow and low price. I've looked at several sectors like Birmingham AL, Memphis TN, and several other. I'd love to have your input on these market and other market you would recommend. Also looked for Florida's market (we did some land entitlement project in the past over there).

If you also have good direct lender for foreigners I would appreciate the referral. I plan to buy, rehab and refinance. The acquisition will most likely be 100% cash, as well as rehab (simply because I want to make cash offers and be able to close in a couple days). 

I would also like to have your opinion in terms of structure. I use to do business via a C Corp, but because of the FAPI rules, the tax deductions have been lowered to 1.9x instead of 4x. So, to reduce overall taxes and to avoid double taxation, I think I should do it via an LLC that flows through directly to me. But then, some would argue that instead of LLCs (costly), I should hop for an Umbrella Insurance.

I'm starting to build my network in the US, so feel free to connect, I'd be more than happy to chat! 

Thanks!

Francis

 Great seeing you on the site! I would make sure look at markets are not over-saturated and that the rents are strong. Lately even in my market rents have been even or somewhat declining. The rentals will sit on the market for longer than expected and capturing the actual rent you want is harder than it used to be... Run numbers on the last 30 days of rents, or comps. 

You need the people who are servicing those areas with a good knowledge of what is going on in that market before you commit to a market. There are a lot of people not in just my market that have stated the change in the market for rents is extreme to some saying it's minor. Work with a professional and someone who can help with the rehab process too if need be! 

[Lindsay Davis]

@Francis Faucher,

Welcome to BiggerPockets (and the U.S. market!)

Don’t know much about entity structuring but I can offer a few details about Birmingham and Alabama. On the state level, laws are fairly landlord-friendly—definitely friendlier than California’s laws are, as @Manny Vasquez noted. Property tax rates are low as well.

In Alabama, property taxes hover between 0.3% and 0.4% of the home’s value per year. (In Tennessee, this figure is about 0.6%; in Florida, anywhere from 0.6% to 1% is common, depending on the county the property is in.)

As for Birmingham, you can find single-family homes in B/B+ neighborhoods here for between $120,000 to $150,000. On the other hand, rents between $1,000 to $1,300 are common, so rent-to-price ratios in the city are pretty favorable.

Let me know if there’s anything specific you’d like to know about Birmingham!

[Francis Faucher]

Quote from @Lindsay Davis:

@Francis Faucher,

Welcome to BiggerPockets (and the U.S. market!)

Don’t know much about entity structuring but I can offer a few details about Birmingham and Alabama. On the state level, laws are fairly landlord-friendly—definitely friendlier than California’s laws are, as @Manny Vasquez noted. Property tax rates are low as well.

In Alabama, property taxes hover between 0.3% and 0.4% of the home’s value per year. (In Tennessee, this figure is about 0.6%; in Florida, anywhere from 0.6% to 1% is common, depending on the county the property is in.)

As for Birmingham, you can find single-family homes in B/B+ neighborhoods here for between $120,000 to $150,000. On the other hand, rents between $1,000 to $1,300 are common, so rent-to-price ratios in the city are pretty favorable.

Let me know if there’s anything specific you’d like to know about Birmingham!

 Appreciate the input! Thanks!

[Colin McMahon]

Hi Francis! 

Great strategy in terms of BRRRR. Have you heard of Doorvest? They handle the renovations and property management for you. All the homes in their marketplace have a modest starting point, great for those just dipping their toes into the U.S. real estate market. In terms of foreign national financing - I can definitely help there, it's my specialty. I'll send you a DM so we can connect!

[Lawrence Briggs]

@Francis Faucher - welcome to the community! 

[Drew Sygit]

@Francis Faucher most of our Canadian clients set up an LLC, which I beleive offers better tax options than a C-Corp. Some also buy in their name and use form W-8ECI.

We have a document that covers all this.

Couple of other thoughts:

1) Recommend you pick a Property Class first, as that often impacts where you decide to invest. Most of BP is geared towards buying Class A, but high rates now make it difficult to cashflow, so investors are now looking at Class B and C.

2) Start with a PMC instead of an agent. PMCs have to deal with what you buy on a daily basis, agents are transaction based.

3) Many OOS investors are buying in the Midwest due to attractive entry numbers. A plug for Detroit - check out all the positive feedback from NFL Draft attendees:)

PM us if we can answer any other questions.