Table of Contents - A Canadian Investing in the USA with Glen Sutherland
Dave Debeau [00:00:08] Hey, everyone, this is Dave Debeau. Welcome to another episode of the Property Profits Real Estate podcast. Today, it is my pleasure to interview Mr. Glenn Sutherland. Glenn, how are you doing today? Thanks for having me, Dave. I'm excited. I'm excited to have here. So if you if you're not familiar with Glen, you should be because Glenn is a fellow podcast or he's been doing this quite a bit longer than I have. So he's got a very, very interesting podcast all about Canadians investing down south, the Canadian invasion down south, buying up American real estate. That's very, very cool. Yeah. Have with you about that. And let me know, how did you first get involved in this crazy world of real estate investing in the first place
Glen Sutherlan [00:00:54] from the very start? Well, my parents owned a duplex, so I grew up being the labor. But I guess that's how I got into the idea of doing real estate. And then who? I guess it wasn't till I was probably I guess 2011 is when I knew I looked it up beforehand and 2011 when I bought the first property. And yeah, I just went from there one turned into two, turned into three, turned into four and started multiplying. And then once I got comfortable, I had a tenant to move to Strath Roy and it was the greatest tenant I've ever had. I still have to this day and once I got used to having a distance for me, that's about an hour and a half hour and forty five minutes from the tenant I was well, you know, I was ready to go see how far I could go. And so I'm like, what do I want to invest in Alberta? Do I want to invest in New Brunswick, which are both great markets? But I ended up pulling the trigger with the states and ended up moving my business down there. I still have Canadian real estate, but I mainly buying down there now.
Dave Debeau [00:01:53] All right. But you're still based in Canada. Where where you calling in from today?
Glen Sutherlan [00:01:57] I live in Cambridge, Ontario. Yeah, yeah, yeah.
Dave Debeau [00:02:02] Very, very cool. So that's quite the. Yeah. So you you were like most of us, you just got smart about it. You know, most of us think, you know, we have to invest within an hour of where we live. Unfortunately, that's not always the wisest choice because a lot of people live in really crappy real estate markets through there's there's probably a way to make money in any market, but some markets are a hell of a lot easier than others. So transitioning further afield and then transitioning out of country and down to the states is quite adventurous. So tell us a little bit what what kind of deals do you focus on down in the States? You're buying single family homes, Moatize, what kind of what kind of markets are you looking at?
Glen Sutherlan [00:02:44] So what? Well, the different markets. But what I'm mainly buying is single family. I do have some duplexes, but I mainly focus on single family homes. What I am looking for in a property is that has the ability to ideally refinance out of it. So I would like I really want properties that if I can buy them after a renovation, that I can get all of my money back. The biggest thing is that you're just you run into money. I don't care if you have like ten dollars billion, eventually you just go buying. If you have that kind of money, you'd be buying huge apartment buildings, but eventually you'd run out of money no matter what. So it's the the really the way to keep going is to be able to recycle your money. So that's what I'm mainly looking for. And I'm doing a lot of joint ventures now. And to do that, you need ideally, you want the joint venture to get their money back. You want them to get their money back. You don't want them to have their money stuck in there. It's a lot harder to sell something if you're going to say you have to keep it in here for five years. It's a lot it's a lot sexier to say I only need it for a short period of time. And you're an equity partner. So I'd say
Dave Debeau [00:03:52] you can do you hold ownership in the property. OK, so you go down. So what kind of. How did you decide what market to start with in the first place?
Glen Sutherlan [00:04:00] Oh, right. Yeah, so I basically I got a bunch of criteria and I started cutting it down, cutting down markets, because there's really like if you start listening to the podcast of the Americans, you'll notice that there's a lot of the same people in the same markets that keep getting mentioned over and over again because they're like just really well positioned. So I start out with the whole list, which is like 30 different cities that I was interested in. And then I went for because, you know, if I'm going all the way from Canada, I'm going to try and pick the best that I can possibly pick. Right. So that I went, which one's our landlord friendly? So if I'm going to leave Ontario Tenant Friendly Province, I want to go. That's what I was like striving for. Right. I want something that's going to be in my favor if I have to do an eviction. So then I went through and cut the list. Only a few off, actually, because a lot of the other investors are always going for the same sort of states. Mind you, there's still other ones and spread out. And it's not necessarily I wouldn't say that everyone has to do it that way. But, you know, because if you used to Ontario, then you can go to other places. You have the same problems, but you might have some different cash flow. So anyway, total tangent. I'm really good at that. But anyway, so did that. I was looking for populations that were growing, so I wanted growth. I wanted a lot of large businesses coming into the markets. I wanted investment and like the markets I've picked have been heavily invested by Trump. So right now they're building like new car plants and new Amazon and stuff is coming in. So I wonder if that's. Yeah. So even if I buy this all wrong, which I'm not, I'm buying everything off market or if it is on market, it's usually a foreclosure because those are listed. But I'm buying off market, so I am getting good prices on the properties. But say I still bought this thing wrong. I want a market where the market will bail me out because when I started in Ontario, I didn't really know what I was doing. I didn't know how to figure out what I should be charging for rent. And because of that, I should have lost a lot of money because I wasn't buying property and I wasn't renting for as high as I should be renting. But the market took off and it didn't matter what you bought, everybody won. So so it all worked out there. But that's now that I'm in the States, I want to have that sort of back up cushion as well, right?
Dave Debeau [00:06:20] Yeah. Yeah, that makes a lot of sense. OK, so you've got different markets that you're investing in. You build it in your phone. What what works for you? So a lot of people are probably wondering, OK, well that's that's cool. That's kind of scary though. Yeah. And the limited amount I know about investing the states, one of the hurdles I see Canadians having is how do you get set up properly with legal and financial and accounting structures so you don't get double whammy with taxes. And I know that's that's way too deep to go into depth in this conversation. But can you give us maybe just a little overview of how you set up
Glen Sutherlan [00:07:00] super quick overview. First of all, get an account and get it set up properly. Don't, because you can set this up yourself and
Dave Debeau [00:07:08] butterballs accounts don't know how to do the cross-border thing. Yes.
Glen Sutherlan [00:07:11] You also get a cross-border accountant. My accountant, that's all he does is he's in the States and he just does people from Japan and China and Canada and Australia, they invest in the states. So we specialize in that. But what the main thing is, is that you don't want to own just a basic LLC, which is a limited liability company, and that's that. You don't want that because it's a flow through company which doesn't exist in Canada. So if you you don't actually pay taxes in that company, it flows through to your personal return. The problem with that is the way Canada revenue looks at that and they say, well, that is a corporation, so we want to tax the corporation, but the money is all flow to your personal return. So then they want to tax you personally as well and you're getting a double whammy. So the ways around it are using a C corp, like a foreign corporation or using a limited partnership. And even if you have a limited partnership, you can stagger LLC underneath because they're nice and cheap to set up and it limits the liability from company, from property to property, or you want to bundle them together. And it's just a way to separate stuff and mitigate your risk. But in all honesty, you want to set something up. You don't want to be owning this all in your risk of owning all in your own personal name. It's a lot of extra risk because no offense to Americans, but they do like to sue a lot more than we do. Yeah.
Dave Debeau [00:08:28] And we're starting to like to sue a lot, so. Yeah. Yeah. OK, well that's cool. Thank you very much for the overview there. Next question I've got about investing in states. So am I. Am I right in assuming that you're going in all cash, buying the thing, all cash doing the Renaults and then you're getting the financing after it's all said?
Glen Sutherlan [00:08:49] Is that correct? Sometimes. Sometimes I have, I think, five properties I own in cash right now. But I what I like to. Do is they don't want to say I'm bad and I like to use my own cash, but or put cash in the deals, and if what I really want to do is put the 90 percent loan to value, get a fix and flip loan, there's tons of companies down there that do these fix and flip loans and just make sure you get a reputable one. But a lot of them, even for a Canadian, because it's not based on credit score. Actually, in all of us, it's usually based on experience. So they may, depending on the company, use your Canadian stuff. But even I just filled out a loan today. I didn't use any of my Canadian stuff on it, but it's a lot of it's experience in the deal. And so they have fixed loans, which are 90 percent of the purchase price and the renovation. So you can get that. It's expensive. It's hard money. Right. But it'll get you through by the end of buying the property. All cash, because you're going to burn through all your cash and live gives you more projects at the time and then you can put a small amount down and do your renovation and then refinance. And depending on the lender, they'll let you cash out reifies. And some of them are immediate, but then the rates are higher. But three months, six months, the the less exciting ones are 12 months that don't make you seizing the property and seizing the property is like having it fully rented. So the one I like, we usually can do it right away, but I end up paying a little bit higher. But that's OK with me.
Dave Debeau [00:10:19] All right. Very, very cool. And then so there are that's good to hear. There are some good finance options down there. Pretty expensive, of course. But if you're doing the quick in and out kind of thing. Yeah, OK. How often are you like when you're doing these deals, are you having to go to be boots on the ground there, checking up on everything and doing all that kind of stuff? Or how do you manage that?
Glen Sutherlan [00:10:42] I go down probably every half year, but it's more to shake hands and make communications with different people. When I went down in the fall, I went and looked toward a whole bunch of properties. But I've found that it's not even necessary now that I have a good team. So I have my property manager in between that and my realtors will tour properties for me, take photos, take videos, point out things almost like a preliminary basic home inspection. And, you know, it's not the home inspection, but they'll give me a good idea if it's worth buying and they don't get paid for that. And the reason they do it is because they will get paid in a different way, like if as a property manager, they'll get paid. Once the property is under contract, I'll be having this long term relationship with them renting it or realtor will get paid whenever I buy the property or sell a property. And so off the start, it's really hard because people don't want to do those type of things for you because they don't know if you're actually a closer. But once you've established a relationship, they will. If you find the right people, they know they'll get paid eventually. And it works out and it's a big, I don't know, utopia of everyone. Everyone gets paid and everyone's happy.
Dave Debeau [00:11:56] That sounds like real estate utopia for sure. Yeah. So in these different markets, how many different markets are you investing in right now?
Glen Sutherlan [00:12:03] Three markets
Dave Debeau [00:12:06] close together. So you use the same know they're all.
Glen Sutherlan [00:12:09] No, no, they're all over the place. I'm in Alabama and in Missouri and in Indiana. So, you know, kind of the south, the middle and then almost over to the east, sorry, over to the west with Missouri. But I originally when I first started down there, I got a property manager that was nationwide and I thought that would be a great way to be able to do this. I didn't like it. I felt like I was calling my cable company every time I called in. And I had to be directed through different people and put on hold. And I, I switched to, you know, people who are smaller and specialized in that market
Dave Debeau [00:12:45] make sense vertical. So what year did you start investing in the states? How long?
Glen Sutherlan [00:12:51] Twenty. Seventeen? Not that long ago.
Dave Debeau [00:12:53] Yeah. And you're already in three different markets and you're building up quite the portfolio there. And now that you started the podcast and you're kind of become known as the Canadian investing the US guy, what are some of the biggest mistakes you see fellow Canadians making when they plunge fourth best out of the states?
Glen Sutherlan [00:13:13] Well, I think the big mistake is that they did. The numbers are different, right? The like they see a house that's like seventy five thousand runs for seven point fifty dollars a month. And they're like, oh, my God, this is the steal of my life. And they go and buy it, but they don't realize that that's actually commonplace and they're not actually buying a deal at all. And they're buying at market or even above market. And they they don't understand that because it's totally different. It's so different that like some of these numbers, if you're not planning on holding these things forever, if you're to hold it forever, it doesn't matter. Right. But if you want to exit from these, you're going to have a rude awakening if you bought it wrong. That's if you just pull it up. Yeah. Or they're going up. But there you started behind it. Yeah. So you bought that seventy five thousand dollar property. But it's it's only worth sixty five thousand and it's going to take you, you know, five or ten years to get up to your seventy five. Yeah.
Dave Debeau [00:14:10] OK, different market, different learning curve then. Well you and I both do a fairly short podcast interview so we've got to wrap this sucker up. But if people are interested in finding out more about your podcast, first of all, how can they do that?
Glen Sutherlan [00:14:25] The podcast is on YouTube, Stitcher, SoundCloud and iTunes. It's called Kadee Investing in the US. You can search Glen Sutherland to it'll show up and either one will show up in Google or wherever you're looking for it. And yes. And have my website as well. Glen Sutherland dot com. I give it away for free. There's plenty episodes where I'm just especially episode one, which actually should be redone because I did it so long ago, I wasn't comfortable with the camera, but they're full of information. It's all given away for free. And you can even contact me if you wanted to go a little deeper. Perfect.
Dave Debeau [00:15:00] Sounds awesome. Thank you very much. This has been great. And the nice thing about these short interviews means we can always come back later and pick up the conversation. That sounds great. Thanks, Dave. Thanks a lot, Glenn. All right, everybody, take care. Have a good week. And we'll talk to you next time on the next episode. Take care of. Well, thanks very much for checking out the property profits podcast. You like what we're doing here. Please head on over to iTunes, subscribe read us and leave us to review it. Very, very much appreciated. And if you're looking to create a regular flow of inbound investor inquiries about your real estate deals, then I invite you to attend one of my upcoming live online demonstrations. And you can check that out at Investor Attraction Demo Dotcom Ticker.