All Forum Posts by: Jesse Fragale

Hey Shrey,

I have a podcast called Working Capital The Real Estate Podcast.  I'm based in Toronto but discuss topics related to investing in both the US and Canada.  Might be of help!

Fellow Canucks, I'm curious to know which areas people are investing in, in 2022.  Also which asset classes do you think have the biggest potential.  What are some of the challenges and opportunities Canadian investors are having and seeing (High prices, Landlord Tenant challenges, zoning etc).

I just posted a list of my top favs on my IG.  Here ya go 

https://www.instagram.com/p/CNJYgcQj7Pu/?utm_source=ig_web_copy_link

You can get access to the land registry as well as use paid services like Costar to get lists of owners in Canada.

Don Campbell has some great Canadian-focused books.  Check out George Dube for Canandian tax/accounting.

Mike, not legal or tax advice (of course) but in Canada we do have depreciation in the form of what is known as capital cost allowance.  Works very similarly to US depreciation. Instead of 27.5 years for resi and 39 years for commercial in the US...in Canada we have 'classes of property.  For instance, most Canadian residential rentals are "class 1" which means you can depreciate the buildings at 4% a year.  Which is very similar to 27.5. Example $1 million/27.5 = $36,363 or 3.63%.

As far as bonus depreciation and cost seg.  I am unaware of bonus depreciation in Canada.  My understanding is it was most recently an aspect of the Jobs Act in the US.  Thats out of my depth.  Cost-seg is a good question that I honestly do not know the answer to.  I know Canadians have used different classes of equipment in their rentals on different amortization schedules...but I am not sure if it is cost seg per se.

Hope that helps.

Thanks Martin!  Im flattered :) If you like to hear more, you can check out my podcast Working Capital 'The Real Estate Podcast'  Brandon Turner was Episode #1

Hi All,

Curious if anyone has a recommendation for investment management software that can handle distributions that is not overly expensive (Juniper etc) AND is not American focused?...OR is US based software that can be used without having to use US based elements.

I am not sure if the majority of US based systems have US centric aspects built into the software or can be used omitting the non relevant items for Canadians (as most know here, we use RRSPs not 401(k)s, TFSAs not ROth IRAs, partnership income not K1s etc).

Thanks!

Highly recommend George Dube: Legal, Tax and Accounting Strategies for the Canadian Real Estate Investor

I had him on my podcast as well if you want a Canadian perspective on the topic https://jessefragale.com/podca...

I did a video on getting down to your NOI

after that (to get to cashflow) you need to subtract your debt service and capex reserves (I subscribe to capex being 'below the line'...a good explanation here: 

CCIM courses on commercial real estate, and in our software, is to put the reserves below the NOI – in other words, not to treat reserves as having any effect on the Net Operating Income.

This makes sense, I believe, for a number of reasons. First, NOI by definition is equal to revenue minus operating expenses, and it would be a stretch to classify reserves as an operating expense. Operating expenses are costs incurred in the day-to-day operation of a property, costs such as property taxes, insurance, and maintenance. Reserves don't fit that description, and in fact would not be treated as a deductible expense on your taxes.

Perhaps even more telling is the fact that we expect the money spent on an expense to leave our possession and be delivered to a third party who is providing some product or service. Funds placed in reserve are not money spent, but rather funds taken out of one pocket and put into another. It is still our money, unspent.