All Forum Posts by: Account Closed

'Loan arranger'? Where did you meet him? It doesn't sound like there is a formal contract that spells out the terms of both the hard money loan and this personal loan? So you somehow managed to mingle both? You feeling 'setup' by the lender? It seems there are faults on both sides.

It sounds like the investor is either trying to skirt around having any income he earns from the project being classified as "passive income" which can be taxed at the higher rate of 30% or maybe he just need more security/guarantee. What country is the investor from? Does it affect what you expected to earn for facilitating the rehab? 

 Are you sure about the timing of this? Just how many properties are you looking to acquire per year and are these primarily rentals?

Do you have any project details? Both the country and project risk with a hotel construction project can be enormous. Utilizing a Costa Rican property for collateral also has its challenges.

If you have project details and if they make sense -- there always is funds. Which market are you looking into and what are the deal specifics?

You would typically worry about a securities violation if you are actively or planning to solicit funds from a group of investors although when you start getting funds from multiple persons who may or may not be accredited, things can get hairy real quick. How are the friends getting to invest the funds in the project?

Any lender, if they had the preference, would want to loan funds locally. However, like an investor, some lenders don't want to limit their fortunes to what the local market offers which can be saturated and will in some cases fund out of state projects. The investor though typically wouldn't care where the lender is located. Rehabbing is a different beast. Due to the level of risk involved, many hard money lenders for instance can be quite narrow in markets where they lend.

Are you aware of what the total debt and total income is? There often may be a subtle or material variance in how each lender approaches a loan. 

The larger banks (WFC, BAC, JPM etc.) may often 'think alike'; don't be surprised for instance if they all appear to be singing the same song. 

Some of the regional, community banks, credit unions etc. may perceive the risk and process the loan differently but also may not, based on specifics of the case.

Are you certain you wouldn't get credit from the CRA for rental income that would have been already taxed in the US based on current treaty between US and Canada?

Is this a rental or a fix flip strategy? How you are taxed can vary dramatically in each case. 

On the US side of things, whether you utilize an LLC or your personal name is almost moot from a tax standpoint.

Based on current US treaty with Canada, you do want to check with the CRA if you can get any foreign tax credit for taxes you would have already paid on US income. 

Sometimes you only get  double taxed by both countries if you do not claim the credit but the country where the income is earned/generated usually gets first dips.