Buying U.S. Real Estate E-Book

Richard Dolan

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 395

Veröffentlichungsjahr: 2012

Beschreibung

"I would consider this the bible for any Canadians wanting to invest in US real estate." --W. Brett Wilson, Entrepreneur, Recipient of the Order of Canada, and former Dragon The thought of buying property in the United States has been on your mind. Perhaps family members or friends already own real estate in the Sunbelt and you've enjoyed the occasional visit. You sense the market isn't as frenzied as it once was but there is still very good value to be found. Whether you are looking for a vacation home or an investment property, you are certainly not alone. Canadians continue to buy U.S. real estate at a record pace. But as the economy and laws change around ownership of U.S. property, Canadians need to have the most current information possible at their fingertips. Buying U.S. Real Estate: The Proven and Reliable Guide for Canadians is written by experts who own U.S. property and addresses the many cross-border issues and requirements, such as: * How to begin your search and find relevant data * Finding the experts you need on your side * Knowing that a property meets your lifestyle needs and wants * Knowing all of your finance options * How to proceed with renovations or upgrades * What you need to know about U.S. tax laws * What type of ownership is best aligned with your strategy * How to create an estate plan For Canadians generally, and boomers especially, the right property in the right destination point is integral to their life-rich philosophy. Buying U.S. Real Estate: The Proven and Reliable Guide for Canadians puts all of the pieces of the puzzle together and is an essential guide to reaching one's ultimate destination.

Leseprobe

Contents

Cover

Praise For Buying US Real Estate

Title Page

Copyright

Foreword

Introduction

Your Life's Intent: Applying the Right Mindset to Investing in Real Estate

Capitalizing on US Opportunities

Don't Confuse Lifestyle with Investment

A Longer-Term Strategy

Part I: The Decision to Invest

Insight 1: The Economics Behind the US Market

What Trends Are Driving This Opportunity?

No Income, No Assets, No Worries!

How Big Is the Foreclosure Market?

The US Economic Recovery

New-Home Construction

The Rental Explosion

Prime Property Will Be in Hot Demand

Insight 2: Finding the Treasure with the Property Goldmine Scorecard

An Important Tool for Real Estate Investors

Property Goldmine Scorecard

Insight 3: Let Quality Research Drive the System

Getting Quality Information from the Internet and Other Sources

Insight 4: Dig for Specific Information and Ignore Generalities

The Market Today and Tomorrow

Insight 5: Jobs, Infrastructure, and Gentrification

Signs of Potential Economic Growth

Business-Friendly Policies Are Vital

Trains, Planes, Automobiles: Infrastructure Matters

Gentrification and Renewal

Insight 6: A Closer Look at Three States

Florida

Arizona

Texas

Part II: The Distressed Property Market

Insight 7: Learn to Identify a Distressed Property

What Causes Distress

Volume Sellers South of the Border

Resist the Temptation to Think You're Different

What's Behind the Discount?

So, There's Money to Be Made

Insight 8: Understand the Fundamentals of the US Foreclosure Process

Foreclosure Defined

Insight 9: Commit to the Number One Rule, Then Get Your Options Straight

Three Ways to Buy

What to Remember about Foreclosures

Insight 10: More on Due Diligence

Five Market Fundamentals

An Extra Word on Vacancy Rates

More Market Facts

Insight 11: Avoid the Snake-Oil Salesman

There's No Such Thing as ‘Leading’ or ‘Only’ Experts

Lender Scams

Housing Rip-Offs

Insight 12: Recognize That a Bad Area in the United States Is Very Different from a Bad Area Elsewhere

Define Your Bad Area

Be Realistic

Know What You Need to Know

Weigh Risks and Returns

Insight 13: Look for the Stability of a Good Neighborhood and Follow First-Time Homebuyers

The Benefits of Market Stability

What's Your Investment Plan?

A Final Word of Caution

Insight 14: Choose Your Exit Strategy Before You Make the Deal

Identify Your Exit Strategy

Wholesale and Fix-and-Flip Options

Pick Your Partners Carefully

Choose an Exit Strategy That Makes Money

Insight 15: Know Your Financing Options and Obstacles

Portfolio Loans

Private Money

Leverage Your Canadian Successes

Insight 16: Understand the Real Estate Cycle

What Is the Real Estate Cycle?

Boom, Slump, and Recovery

Recognizing Cycle Shifts

Insight 17: Find the People Who Can Help You Find Foreclosures

The Not-So-Secret Way to Find Great Real Estate Deals

Understand What an Agent Can Do for Your Business

Getting an REO Agent's Attention

Beyond the REO

Check Out the Wholesaler Market

Deal Flow

A Recipe for Success

Insight 18: Benefit from the Five Profit Centers of Real Estate

Natural Appreciation

Forced Appreciation

Positive Cash Flow

Mortgage Reduction and Leverage

Tax Deductions

Insight 19: What a Full-Service Real Estate Investment Group Offers

What Full-Service Real Estate Groups Do

Good Full-Service Real Estate Groups

Bad Full-Service Real Estate Groups

Insight 20: Analyze Your Deal

Understand the Property's True Potential

Cash-Flow Statement

And the Final Number Is . . .

Checklist for Entering US Real Estate Markets

Ask Yourself the Tough Questions

Part III: Renovations and Management

Insight 21: Work Smartly with Contractors and Subcontractors

Five Common-Sense Rules

Insight 22: Weigh Reno Must-Haves with Nice-to-Haves

The Kitchen: Put the Three E's to Work

The Bathroom

Insight 23: Dial Up the Intellect (Dial Down the Emotions)

Emotion Versus Passion

How Much to Spend

Exit Strategy

Look and Ask Around

Insight 24: Do the Big Four Renos on a Rental Property—Now

Make Sustainability a Fundamental Priority

The Big Four

Insight 25: Get Everything in Writing

The Six Golden Rules of the Written Contract

How to Handle Contract Changes

Keep It Simple

Insight 26: Curb Appeal: You've Got Seven Seconds to Impress Me

An Exterior Makeover

How Much Should You Spend?

Insight 27: Run If You Spot Any of the Top Three Reno Red Flags

Make Sure Your Project Is Efficient

Keep the Project Focused on What's Effective

Stick to Economical Options

The Top Three Reno Red Flags

Insight 28: Hire the Right Property Manager

Zero in on Excellence: Seven Questions to Ask Potential Property Managers

Insight 29: Make Money by Delegating to Your Property Manager

Put Your Money to Work

Professional Property Management Pays for Itself

Insight 30: Set the Rules Up Front with Your Property Manager

Get Your Communications Plan in Place

Stick to business

Use technology wisely

Insight 31: Be Smart about Rent Collection

From Delinquent to Delivered

It's All about the Business

Part IV: Cross-Border Tax Planning

Insight 32: Understanding US Tax Laws

Filing a US Tax Return

General Guidelines

Insight 33: Taking Title to Your US Property Investments

Limited Liability Corporations

Corporations

What Options Do Canadian Investors Have?

US Estate Tax

Gift Tax

Insight 34: Deal with Depreciation

Depreciation Recapture

Insight 35: Limit Your US Taxation if You're a Canadian Snowbird

Residence Rules

Renting Out Your Property

Selling Your Property

Gain: Filing Requirements

Foreign Tax Credit

Estate Taxes

Review US Estate Tax Plans

Part V: Legal Planning

Insight 36: The Three Pillars of Real Estate Asset Protection

The Three Pillars of Asset Protection

Learn What Asset Protection Is and Isn't

Perform Due Diligence

Insight 37: Develop an Asset Protection Plan and Be Prepared to Avoid Lawsuits

Case 1: The Vexatious Litigant

Case 2: The Cyclist

Case 3: The Toppling Toddler

Case 4: The Weekend Getaway

Stay Out of Court by Being Prepared

Insight 38: Counter Threats to Your Wealth with Foresight

The Top Threats to Your Wealth

Insight 39: Draw Up a Blueprint for Your Estate Plan

Probate

Adopt a Plan

Insight 40: Steer Clear of Asset Protection Fakes, Scams, and Planning Errors

Land Trusts

Limited Liability Companies

Understand Your Strategy: Probate versus Credit Protection

Offshore Trusts and IBCs

Homestead Exemption

Transferring Assets to Family Members

Part VI: Cross-Border Banking and Financing

Insight 41: Understand Cross-Border Issues

Overcome Your Citizenship Issues

Insight 42: Familiarize Yourself with US Mortgage Financing

Loan Application

Investor Loans

Insight 43: Buy US Real Estate Property with Other People's Money

Begin with People You Know

Keep Your Advisors Informed

Part VII: Insurance and Investments

Insight 44: Insure Your Investment

Find an Agent Who Can Shop Around

Areas of Coverage

Replacement Cost Value and Actual Cash Value

Making a Claim

Location, Location, Location!

Insight 45: Carry Insurance Beyond the Property Line: Medical, Auto, and Third-Party Liability

Medical Insurance

Automobile Insurance

Third-Party Liability Insurance

Appendix: Considerations for Buying a Second Home

Index

About the Authors

Praise For Buying US Real Estate

“I would consider this the bible for any Canadian wanting to invest in US real estate.”

— W. Brett Wilson, entrepreneur, philanthropist, adventurer and “Dragon,” and recipient of the Order of Canada

“Buying US Real Estate is a must-read for any boomer who wants to spend the next 30 years fulfilling dreams, leaving a legacy, and living a purposeful life.”

— Dr. Sherry Cooper, chief economist, BMO Capital Markets, and best-selling author of The New Retirement

“This book encourages you to take the time to figure out who you are, what you like, where you will love and what you value. If you ask yourself the tough questions, the odds on finding your passion and living your dream dramatically increase.”

— Patricia Lovett-Reid, host of the Pattie Lovett-Reid Show and former chief economist, TD Bank

“The book's thesis is that the older people get, the more likely they will buy a home-away-from-home. The spoils will go to those who act in the next two years.”

— Jonathan Chevreau, editor of MoneySense magazine and author of Findependence Day

“Every now and then a book comes along that fundamentally changes the game. This book draws upon real science and substance to permanently elevate the way people and place come together.”

— Dr. Paul Stoltz, visiting professor, Harvard Business School

“As a proponent of education and lifelong learning, this body of work represents the foundation for anyone in the world to begin their journey to learn.”

— Rod Paige, former secretary of education of the United States of America (2001–2005)

“Brilliant collection of insights, education, research and direction.”

— Phil Town, MSNBC financial commentator, New York Times bestselling author of Rule#1 and Payback Time

“Insightful. Canadians, especially baby boomers, will find a place on the planet to enjoy family life more.”

— The Right Honourable Brian Mulroney

“Many Canadians are buying US property as retired or retiring individuals. This book is a smart start to buying south of the border.”

— David Sersta, vice president, Zoomer Media

“I understand tailoring solutions and suggest starting with this invaluable guide in tailoring your education about US real estate.”

— Harry Rosen, founder of Harry Rosen Inc.

“This book captures the essence of why owning real estate internationally can be a profitable venture in so many ways.”

— Dr. Richard Ragatz, president, Ragatz and Associates

“This is Canada's quintessential guide for buying US real estate today, wisely.”

— Hunter Milborne, chairman (ret.) and partner, Sotheby's International Realty Canada

“Anyone thinking about making an investment into US real estate will want to be educated. To make a final decision with comfort and ease, start here with this book.”

— David Pelletier, Canadian Olympic gold medalist

“A guide for Canadians with property dreams that's right for the time.”

— Jamaal Magloire, Toronto Raptor

“These authors are the world's greatest real estate educators, in my personal opinion.”

— Juwan Howard, Miami Heat, 2012 NBA Champion

Copyright © 2012 by Richard Dolan, Don R. Campbell, and David Franklin

All rights reserved. No part of this work covered by the copyright herein may be reproduced or used in any form or by any means—graphic, electronic or mechanical—without the prior written permission of the publisher. Any request for photocopying, recording, taping or information storage and retrieval systems of any part of this book shall be directed in writing to the Canadian Copyright Licensing Agency (Access Copyright). For an Access Copyright license, visit www.accesscopyright.ca or call toll free 1-800-893-5777.

Care has been taken to trace ownership of copyright material contained in this book. The publisher will gladly receive any information that will enable them to rectify any reference or credit line in subsequent editions.

Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com.

Cataloguing in Publication Data

Dolan, Richard, 1974-

Buying US real estate: the proven and reliable guide for Canadians/Richard Dolan, Don R. Campbell, David Franklin.

Includes index.

Issued also in electronic format.

ISBN 978-1-118-43120-7

1. House buying—United States. 2. House selling—United States. 3. Residential real estate—United States. 4. Real estate business—Law and legislation—United States. I. Campbell, Don R II. Franklin, David, 1946- III. Title.

HD259.D65 2012    643′.120973    C2012-905176-4

978-1-118-43978-4 (ebk); 978-1-118-43979-1 (ebk); 978-1-118-43977-7 (ebk)

Production Credits

Cover design: Adrian So

Typesetting: Thomson Digital

Editorial Credits

Executive editor: Don Loney

Managing editor: Alison Maclean

Production editor: Jeremy Hanson-Finger

John Wiley & Sons Canada, Ltd.

6045 Freemont Blvd.

Mississauga, Ontario

L5R 4J3

Foreword

by Ambassador Frederick Bush

Foreign investors are investing in US real estate at a record pace, and Canadians are a major part of that trend. Four-plus years of economic stagnation, combined with interest rates at an all-time low and the Canadian dollar at par, have resulted in billions of dollars flowing into the US. Should you join the crowd?

There is a lot to consider when investing over distance. How do you know if you're getting a good deal? What neighborhoods are worth looking at? How can you best manage the purchasing process? The writing team of Richard Dolan, Don R. Campbell, and David Campbell walk the potential investor through all the steps they need to take to acquire property in the US.

Buying US Real Estate is an info-packed road map for finding a property that meets an investor's wish list. The authors have covered the topic from A to Z, including the selection of investment properties, financing and ownership options, legal pitfalls to look out for, and the essential need for proper tax planning, as well as how to carry out renovations and work with a property manager. The authors are careful to warn against buying “emotionally” and provide excellent advice on the importance of investing with one's head and not with one's heart.

This definitive manual is easy to follow and provides the reader with all the tools needed to understand the financial implications of what has to be one of the most exciting real estate buying opportunities ever witnessed in North America.

Frederick Bush served three US presidents—Gerald Ford, Ronald Reagan, and George H. W. Bush—in a variety of roles. He helped found the Canada Institute at the Woodrow Wilson International Center for Scholars while serving as the center's associate director. Frederick is currently an executive with the Vail Valley Foundation in Vail, Colorado.

Introduction

Your Life's Intent: Applying the Right Mindset to Investing in Real Estate

As professionals in the real estate markets, we have worked with thousands of real estate investors and businesspeople, and we know that there is something different about the mindsets of successful individuals. They approach life with a certain set of assumptions, enabling them to apply analytical strategies to their decision-making and, as a result, create positive professional and personal lives.

Why is having the right mindset important? Investors the world over are reeling from the effects of the Great Recession. Those effects have, of course, been felt financially, but there are deep psychological scars as well, which have shaken investor confidence. Getting that mindset back, the inner game that is the ability to assess and embrace risk, knowing that some risk is inherent in every investment decision, is what all investors have to work at now. And that mindset is essential if you are going to achieve success in real estate investing in the United States.