Real Estate

anyone bought condos in the US recently? how do you do it?

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  • Jul 26th, 2019 8:05 am
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[OP]
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Jan 21, 2017
739 posts
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anyone bought condos in the US recently? how do you do it?

hi all, I am interested in buying a small investment property in the States, and would love to learn more about how the process works. :)
6 replies
Deal Fanatic
Jul 4, 2004
5256 posts
1324 upvotes
Ottawa
Like Canada, State laws dictate how real estate transactions work but it's not too different. Ultimately, you'll have a deed to the property registered in your name but for specific details, you have to look at individual States (and even counties as there can be differences as far as fees and taxes).

The biggest issue you are facing is likely financing. Many US banks will not offer financing to foreign buyers. As a Canadian, you may be able to have more success with "US branches" of Canadian Banks (e.g. TD, BMO, etc). You will likely have to put at least 30% down and likely more (I've heard that for condos, they can ask for 50% or higher). By far the easiest way to finance is using a Canadian line of credit and then doing a "cash purchase" in the US.

There are other considerations such as taxes (if you rent out and when you sell), estate planning (if you are really rich, you could be subject to US estate tax. Also there are different ownership structures that you might want to consider if you wish to pass your US property to spouse and / or kids) and even insurance (I believe as a foreign owner, you are not eligible for FEMA assistance in case of hurricane or similar - this may significantly affect your rates).
Member
Jul 1, 2008
227 posts
24 upvotes
michelb wrote: Like Canada, State laws dictate how real estate transactions work but it's not too different. Ultimately, you'll have a deed to the property registered in your name but for specific details, you have to look at individual States (and even counties as there can be differences as far as fees and taxes).

The biggest issue you are facing is likely financing. Many US banks will not offer financing to foreign buyers. As a Canadian, you may be able to have more success with "US branches" of Canadian Banks (e.g. TD, BMO, etc). You will likely have to put at least 30% down and likely more (I've heard that for condos, they can ask for 50% or higher). By far the easiest way to finance is using a Canadian line of credit and then doing a "cash purchase" in the US.

There are other considerations such as taxes (if you rent out and when you sell), estate planning (if you are really rich, you could be subject to US estate tax. Also there are different ownership structures that you might want to consider if you wish to pass your US property to spouse and / or kids) and even insurance (I believe as a foreign owner, you are not eligible for FEMA assistance in case of hurricane or similar - this may significantly affect your rates).
This pretty much summarizes all the key points.

Some other items to note:
1) You will also likely be required to open a US bank account in the US (can't be done from here). Definitely go for a Canadian bank like TD, it will make things a lot simpler.
2) The closing process is slightly different - both buyer and seller usually use a Closing Agent who facilitates the deal for both parties.
3) Find yourself a US tax Accountant who can handle your tax submission on the US Side. This will save you lots of potential headaches
4) Consider if you are planning to use a US Realtor to help you out. Might help to use one from a Realtor company that's also in Canada (i.e. ReMax)

Overall, should consider if the upside is worth it, especially when the FX is not good right now with the US $ vs CDN. Might be more lucrative to invest in other growing cities in Canada.
[OP]
Sr. Member
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Jan 21, 2017
739 posts
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Man, thanks for the information guys. seems it might be much easier to partner with an American investor vs doing it yourself and go through the hoops
Deal Addict
Nov 26, 2004
2489 posts
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DPR2017 wrote: Man, thanks for the information guys. seems it might be much easier to partner with an American investor vs doing it yourself and go through the hoops
There is definitely some administrative work you have to do in order for you to get started. And if you are only buying one, I don't think it is worth the trouble. Originally, i didn't think I would have invested so heavily in RE in the US. But, once I did my first deal, I realized that all the infrastructure has already been set up, might as well just continue buying as it get very easy. I even did a couple of successful flip without even seeing the property in real life and I was able to do the entire flip remotely.
[OP]
Sr. Member
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Jan 21, 2017
739 posts
227 upvotes
William W wrote: There is definitely some administrative work you have to do in order for you to get started. And if you are only buying one, I don't think it is worth the trouble. Originally, i didn't think I would have invested so heavily in RE in the US. But, once I did my first deal, I realized that all the infrastructure has already been set up, might as well just continue buying as it get very easy. I even did a couple of successful flip without even seeing the property in real life and I was able to do the entire flip remotely.
Whoa. Can. I DM you to get more details on how your process worked ?

Coming from the Toronto market and listening to all the different ways you can buy properties from shows like bigger pocket just makes me feel there is better market to play in than Toronto.

Also there are a few cities that I really want to target /set my foot in before prices go crazy like Toronto did.
Deal Addict
Nov 26, 2004
2489 posts
585 upvotes
DPR2017 wrote: Whoa. Can. I DM you to get more details on how your process worked ?

Coming from the Toronto market and listening to all the different ways you can buy properties from shows like bigger pocket just makes me feel there is better market to play in than Toronto.

Also there are a few cities that I really want to target /set my foot in before prices go crazy like Toronto did.
Sure. PM away, always happy to share my experience.

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