Welcome to the Truth About Real Estate Investing Show for Canadians, today’s guest Andrew is Canadian, he lives in the GTA but owns 20 income properties in the US, has never seen any of them and he is the CEO of a tech based, real estate investment company called Share (links in the show notes) that helps everyday investors build a portfolio of fully managed rental properties in landlord friend States in the USA.
I’m your host Erwin Szeto, four time Realtor of the year to investors with $400 million worth of real estate transactions, 350+ investor clients, executing on BRRRs, highest and best use, positive cash flow investing experience. My focus has been on best practices ever since I started investing in 2005 and in my experience, value investing, renovating for value for the long-term has been the best investment strategy for most people, most of the time.
The newer, fad strategies like mid-term rentals and cottages are great for those who want to be active business operators however most investors want as hands off as possible. One of my clients has been doing mid-term rentals for nearly a decade and she has business development work to do to make and maintain relationships with insurance companies and local employers.
Cottage investing has its challenges too: reliable cleaners and contractors are hard to come by in big cities and it’s even harder in remote areas like cottages where properties are further apart making for longer commutes. It’s all possible with skill and hustle, we’ve had plenty of guests on this show who have, just be true to yourself how much time and effort you want to invest.
My point is there’s no free lunch, do your research, understand your own values and seek out the truth about real estate investing and find what works for you.
For today’s guest, Andrew who’s from Brampton, Ontario has 20 properties south of the border and he’s never seen them before. Andrew also shared with me how wonderful his experience has been investing in entry level income properties in the US for $100,000 or less via Section 8, a federal, low income housing assistance program that often covers around 70% of the rent, paid directly to the landlord for a more reliable income stream.
The cash flow from these types of investments are much better than anything I’ve seen in years. Cap rates are 7-11% which are better than any apartment building I’ve seen in BC or Ontario and the investment is much smaller, these are $60,000-110,000 properties afterall for a whole house. That’s less than many renovation budgets let alone a down payment on a duplex in Ontario, BC or Calgary.
I’ve written a blog post to share my research on the subject. I’m not an expert on the subject yet but when I see great opportunities, I want to learn everything about them. Links will be in the show notes and my email newsletter.
Maximise Your U.S. Property Cash Flow: The Canadian’s Guide to Section 8 Housing
We asked and you’ve spoken, over 100 of you responded to our survey asking about what you wanted to learn about investing in the US, 93% of survey respondents went as fas as to say they want to join a webinar or workshop on how to invest in the USA.
As Canadians look southward to diversify their real estate portfolios, get away from rent control and dysfunctional LTB or Residential Tenancy Branch in BC, U.S. investment properties have become increasingly popular. One intriguing avenue is the Section 8 housing program for high yield, cash flow investing. This federal assistance initiative provides housing subsidies for low-income Americans and offers investors consistent rental income. But what exactly is Section 8, and is it a good fit for Canadian investors? Let’s delve in.
Understanding Section 8
The U.S. Department of Housing and Urban Development (HUD) administers the Section 8 program. Qualified recipients are provided vouchers, which can be used to rent properties in the private sector. A significant portion of the rent is then paid directly to landlords by local Public Housing Agencies (PHAs).
Why Section 8 Might Mean Higher Rents
Fair Market Rents (FMRs): HUD’s established FMRs may, in some areas, align closely with or even exceed local market rates.
Consistent Payments: Landlords often experience more consistent payments, with a substantial portion of the rent guaranteed by the PHA.
Longer Tenancies: Limited availability of Section 8 properties can result in longer tenures, decreasing turnover costs.
Economic Buffers: In economically strained areas, FMRs can offer an attractive alternative to declining local market rents.
Challenges and Considerations for Investors
While the allure of consistent rents is tempting, Canadian investors should be aware of the potential challenges:
Regular Inspections: Properties must meet and maintain HUD’s Housing Quality Standards.
Paperwork: There is an added administrative layer when dealing with PHAs.
Rent Variability: Tenants’ rent contributions can fluctuate based on their income, affecting the total rent amount.
Is Section 8 Right for Canadian Investors?
The appeal of Section 8 for Canadian investors lies in the potential for higher and more consistent rents, especially in certain U.S. markets. However, the program does come with its set of challenges. Thorough research, understanding local markets, and perhaps consultation with U.S.-based real estate professionals familiar with Section 8 can help Canadians make informed decisions.
For Canadians eager to diversify their portfolios, amplify their cash flow and tap into the U.S. real estate market, Section 8 housing offers an intriguing option. Like any investment, it requires due diligence, understanding of local nuances, and a bit of patience. But with the right approach, it can be a lucrative venture on the path to international real estate success.
20 Houses in USA, Looking South For Affordability & Cash Flow With Andrew Kim
Our guest today is Andrew Kim, with ten years of real estate experience starting in the GTA, before building a portfolio of 20, fully managed properties in the state of New York, Florida, Atlanta and Dallas. He’s a serial tech entrepreneur who’s worked in Silicon Valley startups and is now combining his passion for real estate investing with his technology. Andrew’s company combines the expertise to handpick quality investment properties for Canadians in the US., writing offers to arranging ownership structuring, taxes, property management, financing partners, renovations and setting lease rates, it doesn’t get any more passive.
To me this is the dream, as the investor I’d have direct ownership and control over the house but passive as the property generates enough rent to pay for top notch management.
[iWIN Hybrid Workshop] How to Invest in the US Real Estate Market https://iwinworkshop.eventbrite.ca
With inflation getting out of control, rent control, uncertainty of receiving rent here in Canada for mainly Ontario and BC investors, I think it’s advisable to give this episode a listen.To follow Andrew or interested in learning more about Share go to iwin.sharesfr.com. To view current and past US deals, you do need to sign up, let them know Erwin sent you and they’ll take good care of you.
This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me. Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up. If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next FREE Online Training Class. We will be back in person once legally allowed to do so, but for now, we are 100% virtual.
No need for you to reinvent the wheel; we have our system down pat. Again that’s www.infinitywealth.ca/events and register for the FREE Online Training Class.
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BEFORE YOU GO…
If you’re interested in being a successful real estate investor like those who have been featured on this podcast and our hundreds of successful clients please let us know.
It is our honour to give back and educate others on how we build cash flowing real estate portfolios using all the best practices shared on this podcast, from the lessons of our hundreds of clients and of course our own experience in owning investment real estate.
If you didn’t know already, we pride ourselves on being the best of the best real estate coaches, having the best property managers, contractors, handy people, cleaners, lawyers, accountants, everyone you need on your power team and we’re happy to share them with our clients to ensure your success.
New investor or seasoned veteran investor, we can help anyone by providing our award winning coaching services and this isn’t all talk.
We have been awarded Realtor of the Year to Investors in 2015 by the Real Estate Investment Network, 2016 by the Canadian Real Estate Wealth Magazine and again in 2017 because no one told the judges no one is supposed to win the award twice but on merit, our peers deemed us as the best. In 2018, we again won the same award by the Real Estate Investment Network.
Hopefully being the most decorated team of Realtors in Ontario will make you consider us for your first or next real estate investment. Even if you don’t invest in our areas, there’s a good chance I know who would be ideal for you.
I’ve been around for a while, some Realtors are talented at servicing investors there are many with great ethics. The intersection of the two, talent and ethics is limited to a handful in each city or town.
Only work with the best is what my father always taught me. If you’re interested, drop us an email at email@example.com.
I hope to meet you at one of our meetups soon.
Again that’s firstname.lastname@example.org
Infinity Wealth Investment Network – would you like to know how our investors returned 341.8% on positive cash flowing real estate over the last five years? On average, that was 68.4% per year.
Just imagine what winning in real estate could do for you.
If you would like to know how we did it, ask us how by calling 289-288-5019 or email us at email@example.com.
Don’t delay, the top markets we focus in are trending upward in price, so you can pay today’s price or tomorrow’s price.
Till next time, just do it because I believe in you.
Hamilton, St. Catharines and Toronto Land Development, Real Estate Investor, and soon to be builder.