All Forum Posts by: Account Closed

I appreciate everyone’s input on the topic. If I manage property and ensure negligence or any other criminal activity is not committed, how much better protected am I then I would be by my insurance policy’s $2M liability?

I currently own 2 income properties and closing in on a 3rd. Properties are not owned by a corporation and therefore rental income earned and taxed as personal income. It is my understanding that real estate revenue is not considered Active income until you employ more than 5 people, otherwise they consider it passive and tax it at a much higher rate. If 5 employees if the tipping point when it is tax advantageous to own rental properties in a corporation, why are there so many buy and hold investors that do it? I must be missing something?

It is my understanding that the tax advantages of an incorporated real estate holding company for buy and hold investments do not kick in until there are at least 5 full time employees on the payroll as this is the point that the CRA considers real estate income to be active as opposed to passive. I see so many investors that are incorporated but I know they do not have more than 5 full time employees. Am I missing something?

Has anyone had any luck with Dimmers and LED light bulbs?

If you are considering hiring two general contractors to get the job done in half the time, you are trying to do their job of coordinating multiple work fronts, manpower, equipment rentals, material deliveries and sub trades and you are expecting to do it better. If you were to do this, you would in fact be the general contractor and be paying the profit and overhead of 2 other general contractors while spending your time doing their job of managing the work. (not a bad deal for your them actually) Two competing contractors on site is also opening yourself up to day after day of problems and delays that are "the other contractor's" fault.

Thank you for the insight Chris Mason and Roy N. , I figured that the bank would be happy with an appraisal to verify that the "before cash back" amount was a legitimate valuation of the property. The skin in the game argument makes a lot of sense. Thanks for the suggestion Scott Weaner , I was already considering this as a source of cash for the down payment.

I have heard that in Canada, banks are not usually comfortable with deals that include cash back at closing.

I can not figure out why. In my opinion, the banks should really only care if they are financing more than 80% of the property value and not where the 20% down payment actually came from. I have not approached any lenders yet regarding this issue, just looking to expand my knowledge on the topic if it does come up.

I would expect that there would be little difference to a seller between taking a certain amount off the asking price and giving that same amount in cash at closing as an adjustment. It would however make a big difference to the buyer.

I understand that this may affect capital gains taxes the seller could be on the hook for but this would just be part of the deal they would have to consider.

Thanks in advance to anyone that has any input.

Cheers

Welcome to BP Richard. Try setting up Key word alerts to be notified of posts that may be of interest to you based on your real estate goals. You might try "Canada" or "Quebec" if you are interested in investing in those areas. Best of luck to you!

Hey Chris Fortner welcome to BP. Starting out I can't imagine investing in real estate with being in the target area or having a partner in that area unless you were to take a more hands off approach like hard money lending. I am in Alberta investing in Fredericton with a partner and it has been working well so far I also know the city quite well as it is my hometown. I have analyzed deals in other cities across the country for comparison and I have actually found Fredericton and other university towns in New Brunswick and Ontario to be high on the rent to value scale. I find Edmonton to be unique in that there seems to be a niche market for high-end properties around the university as the hospital and LRT station are on the same campus. I don't believe there is a substitute for knowing your target market or working with a partner that does. Do you have any plans to move back to Canada in the near future?

Hi Erjon, I am curious as to why you chose those areas in the US. Do you have any existing connection in those cities? I currently invest in my local area of Fredericton, NB but may in the future invest elsewhere due to more favourable rent/value ratios. Is that why you picked those areas?