Falling coming soon.

[Rob]

I can't wait until after labour day.  The amount of properties listed doubles and by October you see some of the best properties all year.  Is anyone else looking forward to fall for property hunting purposes?

[speedfreeksteve]

I'm semi-excited. I'm looking in a few fairly specific areas, so I'm hoping something shows up in one of them. Now I just wish I had a stockpile of cash.. that would help too.

[gap]

It might be beneficial if you're short of cash to look for an investor on this forum to bid with you, pre-agreeing if you win what you will do exactly and within what period of time and who's responsible for what.   Someone else might have cash and give you three months to pay if you win with interest, or agree to share the profits of an immediate resale....1/2 of the profit is better than nothing....

[speedfreeksteve]

That's something I would consider. There are a couple potential bargains out there right now that I would probably be able to go 50/50 on.

[karlo_k]

Would it be possible to setup a corporation and buy the properties through a corporation?    Wouldn't this have some safety aspect to it also?

[gap]

Too expensive initially, especially if there are only two people and you're clear on what you want to do, i.e. resell on the open market, list with mls, etc.  For protection, you could have some agreement in writing, witnessed by a lawyer for a small fee.

[Rob]

Setting up a corporation is cheaper than you might think.  The bare minimum I've seen is a place online offering incorporation for $100.00 dollars.

But it would be more managable if one person who had the capitial was in charge and hired people for advisingr, selling, repairing and whatever other skills that person may need help with.  Contracts would be needed but not necessarily a lawyer.

[kcu]

$100 would cover the services fees, but you still need to pay for government fees that range from $200 to $360. In total the minimum cost would be around $400-500.

[speedfreeksteve]

A handshake is the cheapest way!

But you can still get something drawn up by a law clerk for next to nothing.

[RichD]

Hey all,
I got 4 other people together and we put a tender in on a property in Haliburton about 8 months ago and got it. We just sold it and made a couple grand each. Not much but it was a start. Ive been thinking about incorporating but with out having done any research into it I have to wonder at the advantages. I know there are tax and liability benefits, however as a company aren't there guarantees or liabilities that a "company " needs to provide that  an individual wouldn't ?  In essence don't you become a contactor of sorts and are bound by codes and rules that Joe Blow isn't?

[gap]

A corporation is just a legal entity for taxation purposes, but it has significant liability protections for people who are concerned with being sued.
With regard to taxation, the corporation doesn't pay high income taxes like we do as just individuals.   However, the minute you take money out of the corporation personally, you're still subject to the same tax rate as you pay personally.   And, the cost is high.   The info on this forum is a little misleading.  It's true you pay $360 to the govt and you can get incorporated online for a hundred bucks or so, but people usually go to a lawyer and that costs about $1000.  The reason that they go to a lawyer is because there are several different types of incorporations which are specific to certain scenarios and you may be better off with one rather than another based on what you're doing with the corp.  in addition, you need to file legal minutes and have an audited financial statement (yearly cost from a lawyer and an accountant) for the lawyer.  So, the maintenance/upkeep costs of a corporation are high on an ongoing basis.  Then of course, there is taxation of the corporation, etc.  and the fact that you don't have the same quick access to your assets within the corporation. 
The rule of thumb is you only incorporate after you're making enough profit to be in the high end of taxation scales personally.   Otherwise, the costs don't outweigh the benefits.
The side  benefit is that you have limited liability in some cases personally.   So, you can't be sued (if setup properly by the lawyer- because if done personally, you can sometimes do it incorrectly and then there's access to you personally to sue) directly, but only to the extent of the assets of the corporation.
Banks will often ask for personal guarantees for loans to corporations anyways, so it's difficult to get away from being liable for mortgages of the corporation for example.

[RichD]

Thanks GAP,  your description of incorporation is more what I was thinking it would be.

[gap]

Hey RichD, does that stand for honouring Robert Kiyosaki of Rich Dad, or you aspiring to be RichD?  or are you?  (just kidding here,)?  Cool name...

[jfinlay01]

also about incorporating... an incorporaqted company does not get the $500,000 capital gains exemption that you get individually. Therefore, if you are looking to avoid capital gains tax then you should only incorporate when you think you will exceed the exemption.

[Frank]

the $500,000 capital gains exemption that you get individually. Therefore, if you are looking to avoid capital gains tax then you should only incorporate when you think you will exceed the exemption.

Wow, what country did you say you live in - I think I want to move there.  In Canada, we lost out Capital Gains Exemptions years ago.  Only the deduction for disposition of Qualifying farm properties and small businesses remains. 

Please give me your address.   Or, I want to talk to your Accountant and find out where he got his certification.   Thanks for the tip.