Investing in Canadian Property from the USA

[Melissa H.]

Hey Bigger Pockets :)

My brother is a Canadian resident living in Montreal and I'm a US resident living in Los Angeles. We're looking into buying our first rental property.
We've found a condo in Montreal that meets our criteria and we're considering a purchase. 

We have been negotiating with the the seller and it's looking like we will get in under market :)

I'm looking for advice on how to best structure the purchase considering our citizenship and living differences.
What would be the best strategy for buying the apartment together considering I live in the US and he's in Canada?
Is anyone familiar with the tax implications? 

I would essentially be an international investor. 

Our plan : my brother will apply as the primary buyer, and get a mortgage through a Canadian bank.

We will split the 20% downpayment.

My brother is planning on creating a holding company that will own the property. We're thinking it will have tax benefits, reduce liability and protect our assets. After 2 years he will add me as the second shareholder of the company. We are also going to prepare a document that protects my capital / interest in the property should anything happen to him during the next 2 years. He's young but we're just being careful. 

Any advice regarding investing internationally / setting up a holding company / LLC for real estate, and what tax benefits are available, or anything pertinent are welcome :)

Thanks ;)

[Mike Lambert]

Hi Melissa,

It'll always amazes me that Americans would invest in real estate in Canada when so many Canadians invest in US real estate because they find out it's more profitable. And kudos to your brother for finding a condo under market in my beautiful city of Montreal. It's not easy.

When it comes to tax issues, if you want to make sure you're doing the right, you might want to consult with a tax specialists who has knowledge on both sides of the border, whatever advice you get here. There are plenty of those in Montreal given that so many Canadians invest in US real estate. One of them is David Altro (altrolaw.com). I'm not connected to and I haven't used them so this is not a recommendation.