I finally decided to stop investing in Canadian real estate

[Dan Crosby]

Strong statement I know, but bear with me. After more than a decade, tens of millions of dollars invested, and hundreds of doors, I've grown dissatisfied with my portfolio's performance as of late. As a result, my team and I have entered the United States real estate market as Canadian investors.

I'd be interested in hearing the perspectives of fellow Canadian investors.

[Dan Crosby]

Hey @Roy Cleeves thanks for the question. Allow me to address a few things I have seen thus far...

1) In the areas I have invested in the US I have seen comparable gains in large multifamily as I have in Canada, but no where near the same cash on cash returns. For example, I have a large multifamily that has increased in value conservatively by approx. 40% in the last 10 months being acquired mid January 2021.

2) Forced appreciation based on increasing rents thereby significantly increasing value faster than Canada since we are regulated with rental increase restrictions.

3) The areas I have property in are significantly more landlord friendly than Ontario/Canada therefore rarely have issues with delinquent tenants.

4) Access to scaleable properties. Upwards of 80% of large multifamily in Canada is owned by institutions willing to pay very low cap rates requiring very low leverage and minimal cashflow. The US is opposite with upwards of 80% of larger multifamily owned by private/corporate investors.

5) I operate my real estate like I operate my other businesses and that means they need to cashflow. Cashflow and cap rates in my area are being significantly compressed compared to the US.

6) I have an extremely favourable structure to allow Canadians to invest in US real estate easily without complications (legal or tax).

7) 1031 exchange

These are off the top of my head.

Open to hearing anyone else's thoughts?