Foreword xiii
Introduction 1
Part I: the Decision to Invest 7
Insight 1: The Economics Behind the US Market 9
What Trends Are Driving This Opportunity? 9
No Income, No Assets, No Worries! 10
How Big Is the Foreclosure Market? 11
The US Economic Recovery 12
New-Home Construction 13
The Rental Explosion 13
Prime Property Will Be in Hot Demand 16
Insight 2: Finding the Treasure with the Property Goldmine Scorecard 18
An Important Tool for Real Estate Investors 18
Property Goldmine Scorecard 19
Insight 3: Let Quality Research Drive the System 21
Getting Quality Information from the Internet and Other Sources 21
Insight 4: Dig for Specific Information and Ignore Generalities 26
The Market Today and Tomorrow 26
Insight 5: Jobs, Infrastructure, and Gentrification 29
Signs of Potential Economic Growth 29
Business-Friendly Policies Are Vital 30
Trains, Planes, Automobiles: Infrastructure Matters 31
Gentrification and Renewal 33
Insight 6: A Closer Look at Three States 36
Florida 36
Arizona 40
Texas 42
Part II: the Distressed Property Market 45
Insight 7: Learn to Identify a Distressed Property 47
What Causes Distress 47
Volume Sellers South of the Border 48
Resist the Temptation to Think You're Different 49
What's Behind the Discount? 50
So, There's Money to Be Made 51
Insight 8: Understand the Fundamentals of the US Foreclosure Process 52
Foreclosure Defined 52
Insight 9: Commit to the Number One Rule, Then Get Your Options Straight 55
Three Ways to Buy 55
What to Remember about Foreclosures 59
Insight 10: More on Due Diligence 61
Five Market Fundamentals 62
An Extra Word on Vacancy Rates 64
More Market Facts 65
Insight 11: Avoid the Snake-Oil Salesman 66
There's No Such Thing as 'Leading' or 'Only' Experts 66
Lender Scams 70
Housing Rip-Offs 70
Insight 12: Recognize That a Bad Area in the United States Is Very Different from a Bad Area Elsewhere 75
Define Your Bad Area 75
Be Realistic 76
Know What You Need to Know 77
Weigh Risks and Returns 77
Insight 13: Look for the Stability of a Good Neighborhood and Follow First-Time Homebuyers 80
The Benefits of Market Stability 80
What's Your Investment Plan? 81
A Final Word of Caution 82
Insight 14: Choose Your Exit Strategy Before You Make the Deal 84
Identify Your Exit Strategy 85
Wholesale and Fix-and-Flip Options 87
Pick Your Partners Carefully 89
Choose an Exit Strategy That Makes Money 90
Insight 15: Know Your Financing Options and Obstacles 91
Portfolio Loans 93
Private Money 93
Leverage Your Canadian Successes 94
Insight 16: Understand the Real Estate Cycle 96
What Is the Real Estate Cycle? 97
Boom, Slump, and Recovery 100
Recognizing Cycle Shifts 101
Insight 17: Find the People Who Can Help You Find Foreclosures 105
The Not-So-Secret Way to Find Great Real Estate Deals 106
Understand What an Agent Can Do for Your Business 106
Getting an REO Agent's Attention 107
Beyond the REO 109
Check Out the Wholesaler Market 109
Deal Flow 111
A Recipe for Success 111
Insight 18: Benefit from the Five Profit Centers of Real Estate 113
Natural Appreciation 114
Forced Appreciation 114
Positive Cash Flow 115
Mortgage Reduction and Leverage 116
Tax Deductions 117
Insight 19: What a Full-Service Real Estate Investment Group Offers 118
What Full-Service Real Estate Groups Do 118
Good Full-Service Real Estate Groups 119
Bad Full-Service Real Estate Groups 121
Insight 20: Analyze Your Deal 123
Understand the Property's True Potential 123
Cash-Flow Statement 124
And the Final Number Is 129
Checklist for Entering US Real Estate Markets 130
Ask Yourself the Tough Questions 132
Part III: Renovations and Management 135
Insight 21: Work Smartly with Contractors and Subcontractors 137
Five Common-Sense Rules 138
Insight 22: Weigh Reno Must-Haves with Nice-to-Haves 143
The Kitchen: Put the Three E's to Work 143
The Bathroom 146
Insight 23: Dial Up the Intellect (Dial Down the Emotions) 148
Emotion versus Passion 148
How Much to Spend 149
Exit Strategy 150
Look and Ask Around 151
Insight 24: Do the Big Four Renos on a Rental Property-Now 152
Make Sustainability a Fundamental Priority 153
The Big Four 153
Insight 25: Get Everything in Writing 157
The Six Golden Rules of the Written Contract 158
How to Handle Contract Changes 160
Keep It Simple 160
Insight 26: Curb Appeal: You've Got Seven Seconds to Impress Me 161
An Exterior Makeover 162
How Much Should You Spend? 164
Insight 27: Run If You Spot Any of the Top Three Reno Red Flags 165
Make Sure Your Project Is Efficient 166
Keep the Project Focused on What's Effective 166
Stick to Economical Options 166
The Top Three Reno Red Flags 167
Insight 28: Hire the Right Property Manager 172
Zero In on Excellence: Seven Questions to Ask Potential Property Managers 173
Insight 29: Make Money by Delegating to Your Property Manager 177
Put Your Money to Work 178
Professional Property Management Pays for Itself 179
Insight 30: Set the Rules Up Front with Your Property Manager 180
Get Your Communications Plan in Place 180
Stick to Business 181
Use Technology Wisely 182
Insight 31: Be Smart about Rent Collection 184
From Delinquent to Delivered 185
It's All about the Business 186
Part IV: Cross-border Tax Planning 189
Insight 32: Understanding US Tax Laws 191
Filing a US Tax Return 191
General Guidelines 192
Insight 33: Taking Title to Your US Property Investments 197
Limited Liability Corporations 197
Corporations 197
What Options Do Canadian Investors Have? 198
US Estate Tax 200
Gift Tax 201
Insight 34: Deal with Depreciation 202
Depreciation Recapture 202
Insight 35: Limit Your US Taxation if You're a Canadian Snowbird 205
Residence Rules 205
Renting Out Your Property 206
Selling Your Property 206
Gain: Filing Requirements 207
Foreign Tax Credit 208
Estate Taxes 208
Review US Estate Tax Plans 211
Part V: Legal Planning 213
Insight 36: The Three Pillars of Real Estate Asset Protection 215
The Three Pillars of Asset Protection 216
Learn What Asset Protection Is and Isn't 216
Perform Due Diligence 217
Insight 37: Develop an Asset Protection Plan and Be Prepared to Avoid Lawsuits 219
Case 1: The Vexatious Litigant 220
Case 2: The Cyclist 220
Case 3: The Toppling Toddler 220
Case 4: The Weekend Getaway 221
Stay Out of Court by Being Prepared 221
Insight 38: Counter Threats to Your Wealth with Foresight 222
The Top Threats to Your Wealth 224
Insight 39: Draw Up a Blueprint for Your Estate Plan 226
Probate 226
Adopt a Plan 227
Insight 40: Steer Clear of Asset Protection Fakes, Scams, and Planning Errors 233
Land Trusts 233
Limited Liability Companies 235
Understand Your Strategy: Probate versus Credit Protection 235
Offshore Trusts and IBCs 236
Homestead Exemption 236
Transferring Assets to Family Members 237
Part VI: Cross-border Banking and Financing 239
Insight 41: Understand Cross-Border Issues 241
Overcome Your Citizenship Issues 241
Insight 42: Familiarize Yourself with US Mortgage Financing 245
Loan Application 245
Investor Loans 247
Insight 43: Buy US Real Estate Property with Other People's Money 248
Begin with People You Know 250
Keep Your Advisors Informed 251
Part VII: Insurance and Investments 253
Insight 44: Insure Your Investment 255
Find an Agent Who Can Shop Around 255
Areas of Coverage 256
Replacement Cost Value and Actual Cash Value 258
Making a Claim 259
Location, Location, Location! 260
Insight 45: Carry Insurance Beyond the Property Line: Medical, Auto, and Third-Party Liability 262
Medical Insurance 262
Automobile Insurance 264
Third-Party Liability Insurance 265
Appendix: Considerations for Buying a Second Home 266
Index 269
About the Authors 274
