How Canadians Can Invest in US Real Estate With Better Cash Flow and Simpler Financing

Welcome back to the Wisdom Lifestyle Money Show. I'm your host, Dillingham. Today, I have an amazing guest with us, Chris Micucci. Welcome, Chris.

Hi, Scott. Thanks for having me.

Yeah. No worries. No worries. So for those that don't know Chris, I wanted to have him on. He's he's on our team.

He runs and leads our US division. So if you've ever spoken to me or us about loans, you've probably spoken to Chris. And if not, and you plan to in the future, you will. But he's also a a big investor. So those of you that listen to the show, you guys know, like, that's how we set things up.

We we only want investors on our team if they're providing investor mortgages. Right? So that's what Chris does. So we wanna hear your story, Chris, because you own a ton of properties in The States, how you got there, how it's working out for you, and and maybe a little bit of about what's next. So we'll turn it over to you.

Sounds good. Thank you very much, Scott. Yeah. So as Scott said, I started investing in The US four months ago last month. So bought my first fix and flip.

Two months later, bought a couple of burs, and then just it just progressed. So, primarily, I've stayed in the Ohio, Michigan states, for them, but, yeah, for that. And then getting on the part of Scott's team was, as he said, being an investor, I was actually refinancing a couple of my properties and saw that Scott, was in Canada. So I instantly asked because I had my mortgage license in Canada. I'm like, hey.

Are you looking for people? So to me, that's was part of the team. And being on the team, it's being able to help people. Like, it's, I've gone through issues with contractors, issues with loans, issues with so I can help those again, lot of Canadians, it's their first time getting into The States. I have the properties in Canada, we all know that the numbers are harder and harder to make work.

I wish that wasn't the case, but in The US, you can buy properties in Ohio for 100 and change and getting $151,800 dollars a month in rent. So, you know, the that is why and all our clients that are reaching out, it's that their move. Most of them are Canadian investors that have just made that move into The US for the cash flow. Appreciation in The US, definitely a little bit different, but that cash flow is there. And, again, building on the clientele, we're just it's that support.

That's why I've been, so many clients have been happy with working with me is because I have that support. We have the connections with, you know, US based accountants, lawyers, things like that that we can connect you with. Because, again, you are investing in a different country, there are important steps that need to be taken. So, again, anybody when you tell someone, oh, I'm investing in The US, oh, you get double taxed. Oh, this this that.

All these horrible rumors that come out, we're here to support you so they don't happen. Because, yes, you can get double taxed, but it's a very half hour conversation with a lawyer to set up the correct entity, and you're never gonna get double taxed. So, you know, it's those things that we want to just keep supporting, you know, and learning a way along the way. We've got the lenders that will do the cheaper properties to, you know, smaller, you know, four units up to the big commercial 52 unit stuff that we're working on now. So, an industrial land and things like that.

So we have those lenders that will do anything that you can do in Canada, we can do in The US. And with that support of the background knowledge and again, so I I try to help and a few people have commented with my support. I also have done I do some teaching. You know, I can support and kinda teach and not just like a straight this is how you do it, this is it. So I wanna more coach you into the proper ways and, you know, and offer my 2¢ if you ask it for properties because, I mean, I have tried you know, I've worked with clients.

If you don't you're not sure, message me. I'm happy to jump on a call and, you know, maybe I can steer you away or steer you closer to it because, again, we all have that, you know, analysis paralysis, especially in the state. So we want to help you make sure that you're doing the best thing for yourself.

Yeah. No. For sure. Now I have a question for you actually, and and this is not rehearsed at all. So you don't even know that I'm gonna ask you this, which is super cool.

But I get a lot of clients that call in, and they're like, okay. Well, I'm gonna give you guys a call because you're in Canada, but then I'm gonna call a US broker. But can you, can you touch on maybe why that doesn't even matter? And, you know, if yeah. I'll just leave it to you.

Yeah. So why, why does that not matter when working with us?

Yeah. So the the benefit of working with us is because we're Canadian, we work with primarily Canadians. We have those lenders that work with with Canadians. Again, like The US lenders, the problem is and to be honest, oddly enough, last night, had an email of a client saying, oh, I'm getting these great rates with this one lender. I'm like, oh, you have a credit score in The US?

Oh, no. No. No. I don't have it. I'm like, well, they don't work with you if you don't have that credit score.

So we ask the right questions wherein the you know, that American lender may just assume you're American. Hey. Do you have a credit score? You're gonna throw your Canadian score, which we go up to 9 100. They only go to 850.

So your score may even sound better to them than it actually is. So to us, it's that we work with the lenders, and we again, hiccups happen even with the lenders that we work with. But more often than not, like Scott said, I'll have somebody call. Oh, I get a better deal somewhere else. Okay.

Fair enough. Like, you know, we're not always gonna be the best lender. And then two months later, they call back. Oh, they changed all the terms at the last minute. They just then realized, oh, you're a Canadian Canadian, not an American Canadian.

So LTV drops, rates go up. So that just for us is the benefit that our primary clientele is Canadian. So we know what a Canadian is should have expectations of that rather than setting what an American because they do get better rates. They do get better LTVs. So those things just we can answer to the stuff that The US teams not necessarily can.

That's right. That's right. And and we do actually I will say so as part two of of your answer is we have we're getting more and more, like, citizens or maybe Canadians with US partners. And I just wanna clarify here too for everybody listening is we have a huge pulse on The US market because we actually have two staff that live in The States that are Americans that are on our team. So we we have boots on the ground, plus we have the Canadian angle.

So I think combined, it's unstoppable. Right? Because if you just go, like Chris said, to an American lender, they're gonna quote you based on if you're American. They're really not gonna paint that picture like a foreign national. That's what they call Canadians.

It's foreign nationals. So we have that too, which I think is incredible because it just gives you that different perspective and right there, these I don't know. It it's just more versatile, which I think is fantastic. Now what's what's next for you, Chris? So I know you're investing in The States.

I know you're heavily invested in Ohio. I know there's some stuff in Michigan. Where next? Like, do you see any market trends, any areas that you're interested in?

Yeah. So I'm currently kinda looking at liquidating some properties to move down to the Texas. I'm seeing, like, one of the big markets right now Canadians are investing in. That Sunbelt, the Texas, Arizona, you know, definitely some great things going down in there. So yeah.

Like, again, the the Ohio markets and Michigan markets are great, but as Canadians, know there is snow. There are, you know, freezing rain. They this stuff all leads to leaking roofs, leaking this, leaking that. Whereas the Texas, the Arizonas, it's dry all year long, so less to worry about in that way. So, yeah, now looking at and going scaling hopefully to bigger, you commercial, smaller apartment buildings.

Yeah. You know, because again, I've been doing the single to four plexes for a while now and now it's, you know, let's get everything under one roof.

That's right. That's right. And and like you said with the weather, I mean, for those that know Windsor, Ontario, that that's where I live. And, I mean, we have a ferry that can bring us across the water to Ohio. That's how close it is.

There's literally a ferry that does that. And Michigan is just right across the bridge. We just drive across. So it's the same weather that's in Southern Ontario. So, yeah, going to the Sunbelt States, much different.

Plus Texas, they're just Texas. Their whole economy is bigger than Canada. Yeah. All of Canada. Yeah.

Just Texas. Yeah. So it's crazy. Yeah.

Yeah. Yeah. And that's it. Right? Like and again, like, even the markets, I've only mentioned a few.

We have clients all over. Like, is I've got a client that's purchased houses. She was driving down to Florida, stopped in Georgia in some small little town, fell in love, has short term rentals there now. Like, it's because The US has so many people everywhere in small towns to the big cities, there are those opportunities to find those houses there. So it is you want to sell if you want something that you can travel to, again, every Canadian, oh, Florida.

Florida, invest in Florida. Again, another great market for the short term rentals, but it's there's just those opportunities for The US. And in The US, again, we just to talk about qualifying for the loans there, it's asset based. It has nothing where Canada, it's all about you. The US, it's does the house cash flow?

It cash flows, you qualify. So I if I can get you a rate, that means you're qualified. The only part you have to do is have that deposit to make sure that you can pay that portion. But if the if that house makes a dollar a month, it will qualify for a loan. So very, very different than what we're used to in Canada.

It's they don't care. They don't I'm not looking at your t fours, you know, your income slips, letters from your employer. Tell me how much that property is gonna make. Let's get you a rate that day.

Yep. No. I love it. And I I know too because we've talked about this in previous episodes and stuff. So I wanna hear sort of the live up to date numbers from you.

But a lot of Canadians that are looking to invest in The States, you know, we get a drastic amount, but, you know, we'll we'll get those you know, I want an Airbnb in Florida kind of thing. Yes. And then we'll get those, oh, I I I found a $30,000 home in Ohio that I wanna get. Right? Like, we get a lot of that too.

Because they have them. They they literally have them. But can we talk about current sort of loan to values so people know how much money they have to bring in and also minimum loan sizes? Because that's the thing. The The US, if you're American, and I mean, American American, not, you know, foreign national with green cards and stuff, they will make exceptions and they do go down to smaller loan sizes.

But for Canadians, it's totally different. So I'll turn over you Yeah. To tell us about that.

So for purchases, you are typically looking at 30% down. If you're getting up to the higher loan amounts that, you know, 200,000 and above, you can go we can get you that 25% down, so 75 LTV, but typically, it's that 30%. So, you know, that rates high sixes, low sevens is really what I'm quoting people at now. So, again, those two things are a shock for Canadian because we're used to, you know, max 20% down some on most deals and rates in the fours, less than fours because a lot of people are just thinking of their primary mortgage. So those rates but again, you have to remember, 6% on a $120,000 mortgage is a lot better than 4% on a $5,600,000 mortgage in Canada.

So it is, you know, those rates, but, yeah, And in The States, they have something that we don't really have in Canada. You can buy down your rate. If you're like, you know what? I wanna get my rate to 6%. You can pay a fee, not with all lenders, but a lot of the lenders allow you to actually buy down your rate.

So, you know, if you want certain cash flow and you have some funds upfront, you're like, I'll pay $5,000 to buy down my my loan a percent or more. That is an option. So, you know, it's not we're gonna quote you at first the par rate, but there are options to actually go lower than what the original quote is. So That's right.

That's right. And for those that are listening and they're like, why is The US more money? I just wanna bring it back to the the bond market. So if you guys look at Canadian bonds, they're low 3% right now. Right?

And so that's what the banks buy them for. They mark them up, and they sell them to you packaged as a mortgage. Right? So, you know, the banks might make a 1% spread on that or whatever, but the bonds in the states are much higher. And the reason for that, I believe, is because of where the money flows.

Right? Like, it's supply and demand. People want to invest more into the states so their bonds have a higher price. Right? Because it's supply and demand.

So keep that in mind. So it's not that it's necessarily higher. I mean, the spread above the bond prices are very similar. It's just that The US is more in demand, so their bonds have a higher yield. Now one thing to touch on too, which is super cool, and maybe you would have said it, Crystal.

I hope I'm not stealing thunder, but but after five years, the loans become fully open in the states where Canada, right, after five years, you're renewing into a brand new probably five year. That's the most popular term in Canada. But in The States, that doesn't happen. So you can switch lenders or do whatever you want at any time after the five years penalty free. Of course, you're paying title or, you know, legal fees, but it's there there's no there's no penalty to to do so.

So I think that's incredible as well.

Yeah. Yeah. And to back on what Scott was saying, you can also they have their mortgages there. You can opt to have an open mortgage, so you could sell it a week later. Rates typically are higher because the bank is, you know, they don't they're not looking to lend you a mortgage for an open period, but you can have a mortgage that is totally open that you can do whatever you want, you know, the next day if you're turning it over, not necessarily most make the most sense, but just an example that it is different that or like Scott said, after five years because their mortgages, there are thirty year terms.

Not amort thirty year term, but five year amortization. It is what you pay today is what you'll pay in what was it? 2036 or 2056. Sorry. That is that same rate.

So, you know, if had you bought back in COVID times and the rates terms were really low, you may never refinance just because your mortgage is such a cheap rate. So definitely slightly different than Canada as well.

Yep. No. I love it. I love it. So no.

That's that's great. And what I'm gonna do, Chris, is I'm gonna put in the show notes our our booking link for somebody to to book a call with us and whatever. So if you guys have questions or you're interested in this or like Chris said, right, you wanna set up that entity properly so you're not being double taxed. Right? Like, we have all those resources.

We're an open book. Well, you know, we'll share them. In return, obviously, we do want your mortgage business, so it's, you know, it's it's not charity, but we'll we'll we'll give you all the tools we have, and we'll do our best for you on on the loans. But did you have any other final statements or anything you wanted to state before we we end the show?

Yeah. No. Like, just adding on to what Scott said too, the benefit of coming to at least to us is that we have that experience because working with the Canadians. Because if you went to just a US accountant to set up an LLC or, you know, an entity in The States, the Americans use the LLC, which isn't recognized in Canada. So those things, the The US accountant may have no idea because he doesn't deal with the Canadian stuff.

So that's where, you know, having those calls with us, we can give you that background and support. And like I said, I'm happy to have a call and discuss what your options are for a house or anything else.

Yeah. And not only that too, I think the other thing that's super, super important is that you are an investor. Yeah. So these are investment property mortgages. You wouldn't wanna work with a guy, and I joked about this in the past, but there's so many brokers that literally live in their mom's house.

Right? So would you rather be taking advice from somebody that lives in their mom's basement who's not, you know, graduated to, you know, success in the investing world, or would you rather work with someone like Chris who has multiple properties? He didn't even say how many he owns, but it's it's definitely a lot. And the level of expertise you're gonna get from him and understanding is gonna be completely different than our friend who lives in his mom's basement. So it's a big difference.

So There is.

Yeah. Yeah. So awesome. Well, I really appreciate you, Chris. Thanks so much for

for joining us. For those

that are listening, the details will be in the show notes and book a call with Chris. You'll Perfect. You'll be impressed.

Sounds good. Thanks a lot, Scott.

Alright. No problem. Take care.

You too. Bye.