I guess there's a new rule that defines a mortgage as risky when fees exceed 1% of purchase price.

I would also make darn sure that the property manager assigned to them was exceedingly experienced in this asset class.

Thanks much for the insight @Roy N.Sorry, I should have clarified that I was speaking from the angle of an LLC being disregarded as an entity, separate from it's owner (Single-member LLC), which would therefore be taxed as a sole proprietorship (prepared with a Schedule C and brought over to an entry in your personal return), unless elected to be taxed as a Corporation.Ultimately, it will be inevitable that funds withdrawn from a US LLC bank account (or any US bank account for that matter) would be subject to tax if brought back to Canada as the CRA requires you to claim foreign income.But with the existence of the US to Canada income treaty, I was hoping a Canadian would be able to claim a foreign tax credit or even better, qualify for tax exemption if US income doesn't exceed $10K USD.Once again, this is all from casual conversation and some reading.

I'd be worried about the costs exceeding what was quoted.  

My cash flow, when I move out and rent the unit that I am, in will exceed yours by 5x.  

The cost of construction in most cases will exceed you return.

There comes a point where your DESIRE for more knowledge exceeds your NEED for it and it becomes time to get your feet wet and get some knowledge from experience.

@James Denon, there are markets that exist in CT where the cash flow can far exceed the prospect of what any future appreciation can give you.

The amount determined under the preceding sentence shall not exceed the taxable income (reduced by the net capital gain (as so defined)) of the taxpayer for the taxable year.....Terms like "qualified business income" are then defined. 

The lender considers the debt covered if the 75% rental income still exceeds the debt.