US Real Estate for Canadians: Tax Setup & Investing Tips

US Real Estate for Canadians: Tax Setup & Investing Tips

Author: Scott Dillingham February 7, 2024 Duration: 33:20

In this episode of the Wisdom Lifestyle Money Show, host Gillian Irving, a mortgage agent with LendCity Mortgages, interviews Michael Matthew, a Chartered Professional Accountant with over 30 years of experience. Michael shares his expertise on helping Canadians navigate US real estate investments, drawing from his background in business consulting and his own experiences as a landlord. The discussion focuses on the essential steps for setting up corporate structures to avoid double taxation, ensure liability protection, and optimize financing options. Gillian highlights LendCity's new program for foreign nationals seeking US mortgages, emphasizing the surge in interest due to Ontario's challenging landlord-tenant environment.

Michael introduces his "Triple C" structure for investors aiming to build long-term cash flow: a Canadian numbered corporation owning a Wyoming C corporation, which in turn owns state-specific LLCs for property holdings. He explains why Wyoming is ideal for C corps, citing no state income tax, low fees, strong privacy protections, and asset safeguards through charging orders. For LLCs, he advises registering in the property's state or as a foreign entity if expanding, with minor fees of $100-300. The conversation covers common pitfalls like buying in personal names, which can trigger capital gains taxes upon transfer, and the importance of obtaining an EIN early to avoid delays in banking and closings. As of November 2025, US corporate tax remains at 21%, with no major changes affecting this setup, though proposed bills like Section 899 could impact withholding taxes if enacted—Michael stresses consulting professionals for updates.

The episode offers practical advice for beginners, including evaluating landlord-friendly states like Texas (quick evictions in 3 weeks), Florida, Georgia, Ohio, Arizona, North Carolina, and Indiana to minimize risks. Michael warns against tenant-favoring states like California or New York, drawing parallels to Ontario's frustrations. He recommends balancing education with action, securing good insurance (noting vacancies over 30 days void coverage), and using bookkeepers for scalability. This insightful talk equips Canadian investors with strategies to scale portfolios efficiently while leveraging LendCity's financing support for US properties starting in the $200,000 range.

Key Takeaways

  • Triple C Structure for Tax Efficiency: Use a Canadian corp owning a Wyoming C corp (no state tax, low fees, privacy) that holds LLCs for properties to avoid double taxation and match tax credits between CRA and IRS.
  • LLC Setup and Expansion: Register LLCs in the property state; use one per $500,000-$1,000,000 in assets for liability protection—expand to other states via foreign registration for $100-300 fees.
  • Avoid Personal Purchases: Buying US properties personally risks capital gains taxes on transfers to entities; always use corporations for rentals to limit exposure.
  • EIN and Banking Essentials: Apply for an EIN early (2-4 weeks normally, up to months in peak seasons) to open US bank accounts—IRS won't reissue lost documents easily.
  • Landlord-Friendly States in 2025: Prioritize Texas, Florida, Georgia, Ohio, Arizona, North Carolina, and Indiana for quick evictions and investor protections; avoid tenant-biased areas like California or New York.
  • Insurance and Risk Management: Secure extended vacancy coverage (beyond 30 days); separate properties in LLCs to isolate issues, and factor in US litigation risks.
  • Beginner Tips: Get educated but take action; focus on cash-flowing deals in the $200,000 range, use bookkeepers for scalability, and consult experts like Michael for setups.

Links to Show References

  • (00:03) - Introduction to the Podcast
  • (01:17) - Investing in U.S. Real Estate
  • (03:22) - Understanding Corporate Structures
  • (06:04) - Setting Up LLCs for Investment
  • (08:46) - Fees and Registration Process
  • (12:19) - Evaluating Landlord-Tenant Laws
  • (16:01) - Comparing U.S. and Canadian Markets
  • (17:01) - Protecting Investments with Multiple LLCs
  • (19:30) - Risk Assessment in Property Management
  • (21:40) - The Correct Order for Entity Setup
  • (23:52) - Importance of EIN in Transactions
  • (26:13) - Common Mistakes New Investors Make
  • (30:42) - Final Tips for Success
  • (32:00) - How to Contact Michael and Jillian

Scott Dillingham hosts The Wisdom, Lifestyle & Money Show, a podcast built on the idea that true wealth is about more than just a bank balance. With over a billion dollars in Canadian real estate financing under his belt, Scott moves beyond basic tips to explore the interconnected layers of smart investing, practical business acumen, and the personal growth required to sustain it all. This isn't just theory; it's a direct line to the strategies and mindset shifts used by successful investors. Episodes delve into the specifics of mortgage financing, managing rental properties, and the complexities of cross-border investing in the US, while also tackling the entrepreneurial journey. The conversation always returns to investing in yourself-because financial mechanics without wisdom and a balanced lifestyle only tell half the story. For Canadians looking to navigate their financial future with clarity, this podcast provides a grounded, expert-led dialogue where actionable advice meets a broader perspective on what it means to build something lasting. You'll hear detailed breakdowns, candid stories, and the kind of insider knowledge that comes from real-world experience, all designed to help you make more informed decisions with your money, your business, and your time.
Author: Language: English Episodes: 50

The Wisdom, Lifestyle & Money Show
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