Welcome back to the Wisdom Lifestyle Money Show. I'm your host, Scott Dillingham. Today I have an awesome guest. I'm super excited to have on with us. Glenn Sutherland.
Scott Dillingham:So Glenn is an expert helping Canadians. And even if you're not from Canada, you can still tap into his program and learn how to invest and purchase properties in The States. So I'm really, really excited to have you on because this is an avenue that we're venturing down with the lending. So welcome Glen. Thanks for having me.
Scott Dillingham:I'm excited. It's gonna
Glenn Sutherland:be fun.
Scott Dillingham:I'm excited. Yeah. No, for sure. So I'm curious though, what inspired you, right? Cause you're a Canadian.
Scott Dillingham:So what inspired you to want to invest in The States? You being a lender probably know some of this stuff. I actually know, you know, really, you know, stuff, but I used to do traditional lending with the Canadian banks and, you know, use the big five or big six depending on how you can look at it. But I used to use those banks, and one of the big things is I got maxed out. They started saying, you know, I think at the time I had four or five, maybe six Canadian properties.
Scott Dillingham:I can't remember exactly. But they were saying, you're done. You're you're you're you're gonna have to go to secondary lending. You're gonna have to go somewhere else to to find lending. You're you're you're basically cut off.
Scott Dillingham:Actually, you know what? They didn't pitch to go to secondary lending. They just said you're dumb. You're not gonna be doing any more investing. They weren't gonna give me any
Glenn Sutherland:more even creative strategies. That was one of the big things. The other thing was that I was, when I was investing in Canada, was the landlord, the property manager, the contractor, the everything. Because I was the property manager, and honestly, it's not my strong suit. That's why I hire other people to do this because I trust way too much.
Glenn Sutherland:I, you
Scott Dillingham:know, I understand when I'm hiring contractors to do it my way, but, like, I trust too much to do property management. When someone says they're gonna give
Glenn Sutherland:me rent, I assume they're gonna give me So I ended up
Scott Dillingham:at the landlord tenant board way too much. Ontario landlord tenant board because I live in Ontario. And the other thing is as a con doing the contracting myself, I'm not a contractor, but I'm fairly handy. I can do trim, put cabinets together, do a lot of stuff. And so I would take, you know, weeks off of you know, used to have a nine to five job.
Scott Dillingham:Take weeks off of work to go work and, you know, if you have your properties, like, ten hours, twelve hours away, twenty hours away in a car, you're you're just not going to have that option, to go fix this. You're not going be running over there in the evening. So it freed my life up. No, that's awesome. That's awesome.
Scott Dillingham:You're right. And you're right. I do know those points. I just wanted to hear it from your perspective and you're right.
Glenn Sutherland:I mean, it's just different world over there. The things that you can do. It's crazy. So for your first purchase over there, what did you buy? What did you go after?
Glenn Sutherland:Well, this is actually a really common question I get.
Scott Dillingham:And I'll tell you what I bought, but I honestly wouldn't recommend going down this path. It was for somebody who, I wasn't hiring a coach, wasn't getting advice, wasn't listening to podcasts, wasn't, you know, at least there wasn't cross border podcasts back
Glenn Sutherland:when I started, back in 2016. So I was kinda winging it. But what
Scott Dillingham:I started off with is I bought some turnkey properties in The United States. Started off as a property in Alabama, was my very first one. I bought it with cash because I didn't understand US financing, because it was everything was new, but I figured I'd go as far as I could go and I'd figure it out. And then when I bought property two and three, I put all three properties into three mortgages all at a time and I refinanced basically the first one into three properties, all in one transaction.
Glenn Sutherland:Great increase. It's tough. Met somebody who could help me with that. So, you want
Scott Dillingham:to go in specifics about what kind of property it was or? Well, no, you don't have to. I just, the fact that you wouldn't do it that way again, I'm curious what way that you would recommend, you know, a Canadian invest over there to get going. Yeah, so the problem with what I did was the same problem anyone has when they do a lot of rental properties or any kind of rental properties, even in Canada or The United States, if, say you have, I don't know, everyone has a finite amount of money, And if you go put that money into a property and you buy it at market value, how do you grow? How do you continue to buy your second property?
Scott Dillingham:Where does that come from? Was the problem.
Glenn Sutherland:And so, you know, at the time
Scott Dillingham:I basically used my line of credit up because the exchange rate was
Glenn Sutherland:a lot different. And I went and bought, you know,
Scott Dillingham:a US property and I was like, how do I, how do I expand? And that was where I kind of got myself stuck. So in this even current market right now, there is advantages to even like, you know, the 2022 market where everything was flying off the shelf. Right now, people are more open to seller financing. People are more open to, you know, inheriting mortgages.
Scott Dillingham:They're more open to a lot of strategies because the market is moving a lot slower, so it takes them a lot longer to sell some of these properties. If these properties aren't in a 100% shape, tip top shape needs some renovation, needs something, then they're going to even more be open to these sort of strategies. But basically, if I was going to buy now, you need to find an exit strategy to the property. It can't be just, I'm going to buy this and hold it forever. Like forever is not a good strategy.
Scott Dillingham:So, you know, how are you going to refinance this property in a future time? And if you're gonna refinance it, why would it work to refinance? Are you going to add value to it? Are you gonna buy it at Like, a you need to be doing something, not just buying turnkey properties. I honestly wouldn't advise that, because if you're banking on appreciation as your exit, it's not the market for that.
Scott Dillingham:No, and I agree. And you said something there too. You didn't say the word, but you're talking about it is leverage, right? As well, because if you don't have the correct leverage, how can you grow your portfolio? If you're buying everything cash.
Scott Dillingham:So that's definitely one of the things that I encourage investors to do, is compare leverage. If you can get leverage in Canada, great. Compare it
Glenn Sutherland:to The States, see what that looks like, but if you're going to
Scott Dillingham:buy cash, it will limit your growth for sure. Yeah. And then like, know, know you've worked on
Glenn Sutherland:both sides and like, know, depending on where,
Scott Dillingham:you know, talk to somebody like Scott, figure out what kind of interest rates based on your experience in The U. And what your interest rates in Canada are, because you might have at least to get your feet in the door to get started, the cheapest money might be your line of credit or your home equity line of credit in Canada that you can move to The US.
Glenn Sutherland:It might be going
Scott Dillingham:straight into The US lending. I think it's about having that conversation first to understand which is gonna work the best. And if you can find somebody like Scott that works on both sides, they can be a one stop shop instead of contacting several people. And one kind of, you know, American lender does understand that Canadian lenders sort of, if you're forwarding emails back and forth to each Yeah, of that's always the hard part is when a Canadian does go to a US broker and they're like, No, sorry, we don't have foreign national lending. It's like, there's so many lenders out there.
Scott Dillingham:So being in this, I haven't been in this world as long as you have. I mean,
Glenn Sutherland:I've was born in
Scott Dillingham:The States, moved to Canada when I was four. I always wondered what I was gonna do with my status. Right. And then it hit me the one day to open up the lending, but you've been doing this for many years and now, right. I believe you are a coach and you have your own programs to help Canadians.
Scott Dillingham:And I think that's really important because what I see when I speak to Canadians is like, how do I do this? Where do I start? What's next? What type of entity? All that stuff.
Scott Dillingham:And I know you go over all of that. So I'd love for you to talk a little bit about your programs and what you do to help investors. Cause I
Glenn Sutherland:know there's so many that would move forward if they had a clear path to do so. Yeah. So we cover everything, right?
Scott Dillingham:The idea is that if you take the program, you should be able to replicate what I do. I'm not the kind of person that's hiding it, or I'm not selling up for a second course, you know, to to charge you more money a second time. So, like, off the start, we're gonna be, like, starting with the basics, understanding the differences between Canada and US. Honestly, the biggest question is the market, like where to invest in The United States. They're literally 10 times the size of Canada.
Scott Dillingham:They have so many cities, so many states, with all different regulations, trying to figure that all out and negotiating or navigating that. You know, setting up your corporate structure, and we actually have, like, some special discounts with some attorneys to set this up so that they'll actually be a much cheaper price, like, literally 50% of what the regular attorney price is just because of the volume. You know, setting up your corporate structure, understanding all the laws, the FIRTA, the FAPI, the like, what what what how Candid Revenue looks at this, how the IRS looks at this, understanding all the different advantages of The US, for instance, and
Glenn Sutherland:I'm not talking like, you know, just the, you know, the evictions and all that stuff that committing the state. I'm talking like the advantages. Oh, man.
Scott Dillingham:I lost my try. But like you could Oh, all the different structures. So oh, sorry. Strategies. Yeah.
Scott Dillingham:So like you can do subject to in The United States, which like is not as easily done in Canada, which is inheriting a mortgage or splitting a mortgage from the lienholder and the debt on it. And just and and, you know, let them keep the the debt and you take the ownership, which isn't really a strategy that happens in Canada. So understanding how to do that, paperwork to do that, how to set up a contract for deed, a lease option,
Glenn Sutherland:to buy
Scott Dillingham:from the banks, how to do short sales, how to do foreclosures, how to do tax deeds. Like, there's just a lot of stuff. And a lot of people are gonna say, well, I don't really need to do that. And so you don't have
Glenn Sutherland:to do all of that stuff. It's just all there. But you'll find if you understand and know all of these things, something will trigger you like you'll, you'll be talking to someone and they'll be they'll they'll say something that you'll go, wait. And it might be because you're like, I don't want to
Scott Dillingham:talk to make phone calls. I don't make phone calls. But you're like, you're talking to a property manager, they can make a connection. They might say something like, you know, I don't need the money right now. Right?
Scott Dillingham:And you're like, light bulb, wait a sec. What are all the different ways we could do this? How could we structure this so that I could get very little money down? How could I make this so that it's a great win win for both of us? And I think that a lot of it is just to be able to understand all of the differences, all the that are to happen between Canada and US and understand how to implement them.
Scott Dillingham:Even And just being in the coaching program, we have questions when you're you're doing a deal analysis. Some of the biggest questions are what I usually am on the phone or on a Zoom call with my students is is that they're
Glenn Sutherland:just like, hey, this is the deal. Can you check to make
Scott Dillingham:sure these comps are good? Because I don't wanna make a mistake. Or they just have questions. They you just need somebody to make fewer mistakes, to ask those questions. Right?
Scott Dillingham:Or like, I just got my E2 visa and social security number. You don't need that to invest. But you like, if you have questions or wanna know how to do it, like, just to have someone to bounce those questions off of is is really important. Because, you know, mistakes can be very expensive. If they're done wrong, you could lead to double tax if your corporate structures aren't done in compliance for Canada Revenue.
Scott Dillingham:There's a lot of different things that you're kind
Glenn Sutherland:of juggling, and just to shortcut the whole thing is I would have
Scott Dillingham:bought it myself. And that's
Glenn Sutherland:why I keep price low. Because I want it to be affordable for, you know, what I would have paid at that
Scott Dillingham:time whenever I wasn't making the kind of money I make. Fully. And you're right. You bring up so many good points about all the different ways to save money. Like, what are the biggest ones?
Scott Dillingham:It's the easiest thing. And you know it, right? When I tell you you'll know it, but like Canadians, when they go to buy over there, they're like, okay, I'm gonna offer a lower price. Okay. And that's great.
Scott Dillingham:And a lot of times you can get a lower price, but it's actually more effective. And I know, know, this is to get a seller credit, right? Get the seller credit, use that to even buy down your interest rates if you're borrowing for lending or use it for your closing costs, right? Like you can do all these different things because in Canada, you can't get the credits. I mean, you can, but what happens is the lenders lower the purchase price by the equivalent of the credit.
Scott Dillingham:Right. But over there, doesn't happen. The lenders will finance that. So just with that seller credit and buying down your rates, that can save thousands and thousands of dollars. Like it's so much better than lowering the purchase price.
Scott Dillingham:Obviously do both, right? Get the lower purchase price and the credit if you can. But little things like that, right? Which I know you go over in the course. So that's awesome.
Scott Dillingham:Oh yeah, I have a whole calculator for the buy down rates that you just mentioned. Like the the idea with a buy down rate is you could pay a little bit more in fees upfront, but get a lower interest rate. And what I like to do is you need to figure out what the breakeven point on that is. Like how many years do I have to hold this property to pay for those extra fees I'm putting to get the savings? And every it's just a chart, right?
Scott Dillingham:Everything makes a breakeven point. You're like, it has to make sense if I'm you're like, hey, I'm doing a two year project, but my breakeven point is three and a quarter years. You're like, well, let's just pay the higher interest. So it's about making smarter decisions. No, it's really, really cool too.
Scott Dillingham:Right. And then obviously cashflow. Do I need to buy on the rate
Glenn Sutherland:to lower the cashflow and or increase the cashflow? But a
Scott Dillingham:lot of Canadians, they don't understand what they do over there. So like in Canada, let's say
Glenn Sutherland:you go to RBC, just kind of pick them. Your mortgage is going to be with RBC forever. Right? So you have to, but in
Scott Dillingham:The States, what they do is when you get your mortgage, they actually sell the debt. You know, and it might be a couple
Glenn Sutherland:of months later because sometimes they'll group a bunch
Scott Dillingham:of mortgages together and sell it. But that's why they're really willing to accept you paying them the fees upfront and getting that lower rate. Because in their mind, they're like, I don't care. I'm selling the debt. So if I
Glenn Sutherland:can make extra money now, why not? Right? So I will say
Scott Dillingham:that for every Canadian, when you get your mortgage statement every year, it might reflect a different company every year, but the terms that you get and everything that you get are locked in. Okay. So the debt, even though it's being sold,
Glenn Sutherland:it's not gonna alter anything for you.
Scott Dillingham:So, but since you brought That's a some Let's say,
Glenn Sutherland:maybe, you know,
Scott Dillingham:sorry? I got one thing to add, because I know that it'll be a faux pas if you bring this up, but one thing that Canadians may not understand, because a lot of them, they have that comfortable that comfortable with these Canadian banks or other Canadian banks, the BMOs,
Glenn Sutherland:other ones are all down there as well. But if you're gonna go down that path rather than talking to a broker like Scott here, you're going to have to personally qualify with those banks, and you really should understand what kind of liability you're taking on compared to not personally qualifying, putting this in a corporation because of the different taxes, how your taxes are
Scott Dillingham:gonna be changed by paying it personally. When you sell the property, you sell it, it could be subject to FERFTA, you could be subject to double taxation depending how this
Glenn Sutherland:is set up. So it's one of those
Scott Dillingham:things that, you know, if Scott brought it up, you're like, oh, it sounds like he's just preaching my own thing, but it is true. And it is something you should understand the risks you're taking and even the personal liability that someone could sue you If you, this property screws up in The U S that if it's personally liable, they could be coming after your assets in Canada. Whereas if it's a corporately liable, it would be broken No, by it's the a corporate great point. And I didn't want to
Glenn Sutherland:bring that up. Yeah. And that's, that's a great point. You're right.
Scott Dillingham:I didn't bring that up just to like, I didn't want to stir the pot. Well, you are right. The Canadian banks that lend over there, it's very restrictive. It's personal name. It's based on your debt ratios instead of the property.
Scott Dillingham:They also have limits. Like one of the banks will only let you have three properties. And if you own over here, then you're done over there. Like if you've got three here, then you can't even buy over there.
Glenn Sutherland:So it's very restrictive.
Scott Dillingham:And a lot of clients think that that is their go to, but you're right. You nailed it with the liability. The U S is very sue heavy. It is compared to Canada. Right?
Scott Dillingham:So to own things in your personal name is such a big risk compared to putting a property in an entity and having that isolated from yourself. So you're right. It's a massive thing. Now for those that are listening that want to take the next step, but maybe haven't, or they've been hesitating, How do they find you? Like how do they join your course?
Glenn Sutherland:How do they get access to you? Yeah, well, there's a million different ways. I'm on everything. If you just type my name in, it'll show up. But I do
Scott Dillingham:a podcast. Probably the easiest way to get a feel of, you know, how I do things, but Canadian investing in The USA or US. I don't remember which way it is on on iTunes and Spotify. But you can find me there at links. We do a Facebook group, which we share lots of information in.
Scott Dillingham:It goes by
Glenn Sutherland:the same name, facebook.com/canadianinvestingintheusa. If you want to
Scott Dillingham:get on a one on one call, just reach out. Send me a text. Send me an email. My information is on my website. That's my actual cell phone number that'll actually go to me.
Scott Dillingham:And like, I I'm here to like, I've been through it. I've done a lot of mistakes. I've learned a lot. I've refined it every single time. And I don't want you to do the same thing.
Scott Dillingham:Let's, let's skip some steps. No, that's, that's awesome. And you know what? I just
Glenn Sutherland:want to throw this out there too. There's a
Scott Dillingham:lot of people that live in their mom's basement that offer investing advice in trying to sell coaching programs. And I can honestly tell you that I know for a fact that Glenn is an investor in The States. I know that he is. And then I want you to know that he's not somebody again, that lives in their mom's basement that has this overpriced course and they've not taken action on anything that they're trying to teach. Right.
Scott Dillingham:So I think that is a really big, especially in today's market where you hear of people going bankrupt and that coach went under and this one went under, or that one lied, that one's being sued. The great thing with Glenn is he is an investor. You can look me up as well. I'm an investor, multi property owner, and we're giving you the advice from experience. So that
Glenn Sutherland:really speaks a volume when you guys are researching or deciding to purchase products. Awesome. Well, thanks
Scott Dillingham:so much, Glen. I really appreciate you coming on and I'm looking forward to seeing you grow. I appreciate it. I'm already growing quite a bit. I'm actually thinking of, like, degrowing.
Scott Dillingham:Yeah. Getting it down to a a reasonable amount of properties because right now, it's a lot. Anyway, no. I I appreciate you coming having me on the shelf. This was a Yeah.
Scott Dillingham:Appreciate lot of fun and a lot of I love talking real estate.