QUOTE (Byron @ Oct 24 2009, 09:49 AM)
Hello,
This is my first time using these posts. I am a young investor and I just bought my first property last year. ...
congratulations ! I wished I knew what you already know and practice when I was in my 20's .. start early, go steady, don't be too greedy, manage well and hold on is a proven path to wealth !
QUOTE (Byron @ Oct 24 2009, 09:49 AM)
I am looking to add to my portfolio over the next ten years and I am wondering what options there are in Canada to protect your liability if you own multiple properties. .
liabilities come in many forms.
One is mortgage liability which does NOT exist in the US as most mortgages are non recourse i.e. no personal guarantee or personal liability ! Hence the big mortgage meltdown as no one took a loss. Neither bankers who sold mortgages off nor investors who could re-finance and pull out all their equity + profits with NO RISK.
In Canada this means: don't be too levered i.e. have enough reserves and enough cash-flow .. or both !
The 2nd liability is from building liabilities like: mold, law suits, fire .. Those are higher in the US due to its more litigious society. In Canada get appropriate insurance and manage well. Fix fire code deficiencies !
The 3rd liability is from partners, i.e. people you work with or investors. Have decent contracts in place, be honest and tell people what they can realistically expect .. and then execute on your promises .. or tell them that you can't deliver if s.th. changes, for example: the economy, interest rates, policies or your personal circumstances (say you get divorced or have a baby or go sailing for 6 months ..)
QUOTE (Byron @ Oct 24 2009, 09:49 AM)
In the U.S., all of my friends say that they put each one into an LLC or some other type of corporation and it's really cheap.
Pro`s and Con`s of creating a company for real estate holding:
..Furthermore, I was wondering if Canada provides a 1031 exchange like in the U.S. for disposal of your property.
no
In addition, let me add that you should consider time invested (blue dollars) and $s (green dollars) invested ! Both have to yield some decent ROI ! I have attached a few older and related posts for "newbies":
5 ways to make money
http://myreinspace.com/public_forums/General_Discussion/61-3347-5_ways_to_make_money.html
How to get started ttp://myreinspace.com/public_forums/General_Discussion/61-4391-How_to_get_started_.html" target="_blank">http://myreinspace.com/public_forums/General_Discussion/61-4391-How_to_get_started_.html
Where to invest these days:
http://myreinspace.com/search/classified_ads/Joint_Ventures/74-13583-68340-Where_to_Invest_These_Days_.html#68340
LOC vs. mortgage:
http://myreinspace.com/public_forums/Real_Estate_Discussion/62-2302-What_is_better_a_mortgage_or_a_line-of-credit_.html
Are you too levered ?
http://myreinspace.com/public_forums1/Real_Estate_Discussion/62-10823-When_are_you_too_levered_.html
More difficult lending environment:
http://myreinspace.com/public_forums1/Real_Estate_Discussion/62-6908-More_difficult_lending_environment_.html
