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Can I realistically be successful investing from abroad in Canada?

J

jayd

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Hello,



I am a Canadian, who has been living abroad in Panama for 2 years now. I came across rein and I'm interested in getting started.



I haven't purchased the rein membership, but I am wondering whether it would be really possible for me to do this from abroad. I'm able to travel, but what concerns me is whether I need to be actively present to make sure my investments are managed, and it gets difficult, when you're living abroad.



I'd be interested to hear others thoughts, or experiences, or anyone else who is in my position and who have been able to make it work.



And if I were to take the plunge and join rein and invest, should I purchase property with an international corporation? Or would it be more beneficial to create a Canadian corporation?



Thanks.

Jay
 
Yes you can but you need a few hundred thousand ideally AND a reliable team on the ground in the target location, like AB or SK.
 
Yes, people do it. It all depends on whether you have an excellent PM to manage it from A to Z for you.

That is by far the biggest challenge.



Sincerely,

Nir
 
I'd say finding a property and area research is far harder. That cannot be delegated easily. It has to have "boots on the ground" .. Frequently over a period of time with many meetings and site visits. Once you own an asset finding a PM is not so hard in most major cities.


Other options are investing with others ( JV, syndication participation, mortgage investment, REIT or rental pooled condo)
 
Yes, thank you all for the advice, will take it into consideration.

Jay
 
Hi Jay

I've seen many investors do quite well who do not live anywhere near where they invest.

It can be much harder - and with more risk - as you need to be able to rely more on others to look out for your interests. Planning out when happens when X happens before hand can help minimize this.
 
Being an expat Canadian is not great barrier to investing. There is the tax issues to deal with, as you are most likely a non resident for Canadian taxes. There are several Rein members who live abroad, Todd Miller and Nicola from Seoul are 2 that come to mind. Both havestill living abroad and invest in the Edmonton area. Talk to the folks who walk the walk for the best advice.
 
Out of province or out of country are not that much different.

If actually owning property is your goal you simply need to have the personality such that you can place 100% of your confidence in others.

If you have the time and ability to actually find the properties yourself this will eliminate the majority of your road blocks. As stated you then only need to find a trustworthy property management company. Not easy but I understand it is possible.



Admittedly non of this is easy or risk free but if it were everyone would be investing in income properties.

My only real advice would to buy west of Ontario.
 
Hi Jay,

We bought our first property (now our principal residence) when we were still living in the UK so it can absolutley be done. It is all about having a team you TRUST in the area where you are looking for those strong fundamentals that will make your investment a great deal.



Once we were in Canada we then bought 2 properties in Hamilton, ON even though we are in Halifax, NS. As I said the key is a team that I trust in Hamilton. Build that team and you will do well.



I also don't fully believe that you have to look West of Ontario Greg! A small thing happened in Halifax called a $25 billion ship building contract that will create 11,000 jobs between 2012 and 2020. Just pick the location that makes the economic fundamentals work.
 
Rich I advise he invest outside of Ontario, being out of country he can invest anywhere, because the Residential Tenancy Act and the Landlord Tenant Board are extremely pro tenant. He doesn't need the headaches of spending 3-6 months trying to evict a tenant while receiving no rent.

My advice is not based on economic fundamentals it is based on logical fundamentals.



Having no damage deposits, no control over pets, not being able to prevent tenants from moving in as many "room mates" as they may chose and not legally being able to reject welfare recipients or collect from them makes Ontario very anti landlord. To say nothing of rent controls, free legal aid for tenants and poverty pimps pushing constantly for additional tenant rights.



There are far friendlier places to invest his money and from everything I hear on REIN the west is the best although if the Tenant act down your way is landlord friendly then by all means go east. Just find the money outside of Ontario if you have that option.
 
I bought a 24 unit building in Nova Scotia and didn't live in the province at the time. I got the financials by email, realised it was a value play with half the rents in the building below the other half ,and then verified there was no rent control preventing me from increasing rents 10 - 20 % as anniversary dates came up. I got on a plane as soon as a previous accepted offer had fallen through, and after checking all units were in similar condition put the building under contract. You have to be willing to move fast and be confident of what you're doing to know its a good opportunity. You actually have a major advantage because you have no bias towards a particular jurisdiction and can pick the most profitable one. I don't believe its out west.



You will have higher initial costs as you have to fly in for visits but if you're unwilling to do that and prefer to trust a realtor you are very likely to find yourself stuck with a bad deal that looked good on paper.
 
Be wary of any realtor that states in a listing "positive cash flow". What this usually means is the monthly rental income will cover the mortgage. Obviously there are far greater expenses than simply the mortgage.



The fear of trusting others is not being ably to convey exactly what your expectations are of investing and insuring your team has the exact same expectations. Real Estate agents generally have there own agenda and are often difficult to control. Find the right one that fully understands and accepts your investment philosophy and you are on the right path. The rest are only concerned with making a sale. They do not know or care to understand income investment properties.
 
This is really great feedback from everyone. Thank you.



My particular situation is unique in the fact that I am a non-resident Canadian. And so my tax situation is a little different from resident Canadians. So I need to figure out what is the best way to structure the entity that purchases the properties in Canada.



Also, I do have the freedom to travel, I'm not held down by a 9-5 job. I'd be able to fly in and stay for a 2 month period just to find and close the deal. I don't know if a 2 month period is sufficient to find, do the due diligence, and close, however this is what I was thinking.



I only have 2 residential investment properties abroad, so I am still relatively a newbie when it comes to RE. I will be studying the rein program, to better educate myself. I'm especially interested in learning the ropes of the multi-family investing course. I figure it would take more amount of work to manage 20 single family homes than managing one 20 unit apartment building. And from what I've been reading on REIN, multi-family units are more profitable.
 
[quote user=jayd]multi-family units are more profitable. if done well .. but many folks have done really well with many single family homes .. so, many choices exist !



[quote user=jayd]I'd be able to fly in and stay for a 2 month period just to find and close the deal.
In two months: YES to find them & set up post-acquisition team like a PM .. but NO to close them .. closing is paperwork mainly and can be done from afar. A multi-family closing is 2-3 months from acceptance .. and 1-2 month from scouting to acceptance of offer by seller.
 
I agree with Thomas. We have been comparing our smaller duplex/triplex portfolio with a thought of "trading" it all in for one bigger one and currently it makes no financial sense as we would get less cashflow!

The education is key as well as a team that you trust implicitly! And I mean REALLY trust as managing from that far away can be tough and costly.

I don't know the rules around downpayments being a non-resident if you are trying to get a mortgage but when we did it 5 years ago the minimum we had to put down was 35%.
 
Real Estate Investing is all about having a team. Any investor here has a team and I'm a firm believer in delagation to your team members with this thought on my mind. You are only as good as the team around you.



Build a solid team and you can Invest anywhere you want to!
 
hi Jayd

investing from abroad is very common , in your case i think you need a trustworthy person who has a good management experience here , you can hire a professional to do it or a family member or a good friend, i think it will be stressful to manage your business here from panama and without help ! good luck
 
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