# If anyone who owns foreign real estate could chime in?



## baconbit (Oct 18, 2017)

I am looking at buying a condo in Nicaragua located in a resort for tourist, and action sports enthusiast. This is ocean front property, and i will be splitting the rental income(my split is worth a 25% yield if the resort has a 75% occupancy rate) with the entire resort, in exchange they will take a portion of it for them being the property manager/operators of the resort(i will still be title owner, and can stay when ever i want).


Anyways, I hope to be wiring my down payment to complete the transaction this week. But i am curious about how to deal with the foreign income as i am a Canadian and will be paid in USD, from Nicaragua?

should i just have them wire/ pay pay my money back, or should i go to Nicaragua and open up a bank account there?


I am not trying to do anything illegal i am just curious srs


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## Jaberwock (Aug 22, 2012)

I don't know about Nicaragua, but opening a bank account in some countries is not as easy as it is in Canada. The banks don't act as though they actually want your business. Opening an account in Chile took me three trips to the bank and about six hours of my time. Opening an account in the DR took about a month, and several trips to the bank, with the documentation required changing every time I went in the bank.

How often will you be paid? Wire transfer works fine, but there is a cost, so you don't want to be doing it monthly. If you are paid annually, then a wire transfer to a US dollar account in Canada should be relatively straight forward and not too expensive.


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## Just a Guy (Mar 27, 2012)

Instead of looking at the profits and what to do with them, personally I'd be doing a bit more research on the actual investment. I've seen a lot of these partial ownership hotels popping up everywhere, even here in Canada. From what I've seen, they aren't exactly what most people think they are. Now, considering the political situation in Nicaragua, I'd be doubly cautious, but then again I make money with most of my investments and really don't want to lose anything on a deal. Comes from the days when I started and couldn't afford to lose anything and has stuck with me.

Not saying this is a scam, but you may want to do some more research into risks you haven't thought of.


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## OnlyMyOpinion (Sep 1, 2013)

_my rental split is worth a 25% yield._ 
What exactly does that mean? That you get 25% of any income over and above costs? 
Surely not that your invested capital will earn 25%? 
That would seem as they say, "too good to be true."


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## baconbit (Oct 18, 2017)

Jaberwock said:


> I don't know about Nicaragua, but opening a bank account in some countries is not as easy as it is in Canada. The banks don't act as though they actually want your business. Opening an account in Chile took me three trips to the bank and about six hours of my time. Opening an account in the DR took about a month, and several trips to the bank, with the documentation required changing every time I went in the bank.
> 
> How often will you be paid? Wire transfer works fine, but there is a cost, so you don't want to be doing it monthly. If you are paid annually, then a wire transfer to a US dollar account in Canada should be relatively straight forward and not too expensive.


wow didn't realize the process could be that long. Have you ever heard of people bringing back cash over seas back home as long as its not more than $10k?





Just a Guy said:


> Instead of looking at the profits and what to do with them, personally I'd be doing a bit more research on the actual investment. I've seen a lot of these partial ownership hotels popping up everywhere, even here in Canada. From what I've seen, they aren't exactly what most people think they are. Now, considering the political situation in Nicaragua, I'd be doubly cautious, but then again I make money with most of my investments and really don't want to lose anything on a deal. Comes from the days when I started and couldn't afford to lose anything and has stuck with me.
> 
> Not saying this is a scam, but you may want to do some more research into risks you haven't thought of.


for sure, gotta do the research before getting too involved. I guess with any investment there is always some level of risk no matter how safe you think it is, end of the day you either take a chance win or lose, you gotta take the first step and own up to it. I guess what i am trying to say is, I am leveraging my investment against my age (27) and take on more risk with a higher return. This condo unit i will be purchasing I'm going to be putting down a very large down payment, I have already liquidated my entire TFSA to make this down payment (hope to have the condo paid off no longer than a 2 year time span.) 

I look at this move as a way to diversify my portfolio of asset/investments

before i was very heavy into blue chip stocks, aside from my home, all my networth was sunk into the TSX, and while the returns were decent and predictable, i knew i could always make my money work harder if i took on more risk and why not a better time in my life while i am still "young"

plus it helps i have no mortgage, and a RRSP valued at ~$150k to fall back on if sh*t hits the fan.

over much of my working years I've built up some level of tangible safety nets in case a big investment goes sour, as I also have a stable job so that brings me more sleep and peace at night. 



OnlyMyOpinion said:


> _my rental split is worth a 25% yield._
> What exactly does that mean? That you get 25% of any income over and above costs?
> Surely not that your invested capital will earn 25%?
> That would seem as they say, "too good to be true."


maybe that didn't need to be included considering it is a speculation, but this resort will be the second one of its kind in the country developed by the same people who designed and built the first one. Rental income was estimated by occupancy rates from prior years from the first (and still in operation) resort that was built by this team). I do agree that there are somethings that sound too good to be true, and this may be one of them. the 25% return is based on a 75% occupancy rate, which is a "safe estimate" considering the growing popularity Nicaragua has for tourism. 

25% is my estimated return once the unit is *paid off*, and is rented out to tourists going to the resort, and this is after the fact that i have paid for all maintenance, taxes, utilities, HOA, resort staff. this is made possible because 50% of my rental income will be used to pay those expenses as well as most likely get reinvested into the brand so it can also grow organically. 

During low season my unit will be rented for $155 a day
high season $175 a day
holidays $300 a day

mind you this is off a 1 bedroom 1 bath condo unit for $89k USD so I am eager to see how this pans out

Aside from the potential lucrative returns I may or may not receive, I also am purchasing this unit because I need to get away from the Canadian winters, and this is a perfect way for me to get far away from snow, and maybe even retire early, or at least work causal at best, maybe be an expat in Nicaragua. I love skateboarding and and have been doing it over half my life and still do not see myself slowing down and the resort my condo will be located in will also house the largest skate park in all of Central America.


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## humble_pie (Jun 7, 2009)

baconbit said:


> should i just have them wire/ pay pay my money back, or should i go to Nicaragua and open up a bank account there?



wondering if you have ever visited nicaragua? if not yet, perhaps you'd consider putting a Hold on that down payment. 

your post says that any net rental that may be payable to you won't come from rent paid on your unique condo property, instead it will be a portion of co-mingled net rents from the entire resort. This does not sound particularly reliable to me. It would be extremely easy for a local management company to prepare the books so that a net surplus of rent from all condos would be either low or even non-existent.

there was a student in my spanish class who, together with her husband, was planning to buy a condo in nicaragua. First, though, they were mastering the language. Do you speak & read spanish? it's likely that the master books for your real estate project will be kept in spanish, while a simplified version could be prepared for english co-property owners, as for german or dutch co-owners, etc.

one could go on & on with warnings to you. Everything boils down to whether you already speak spanish fluently, have visited nicaragua several times, feel at ease in the culture, have managed to find a local lawyer who will look after your interests as opposed to siding even if unconsciously with the condo salespeople.

.


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## kcowan (Jul 1, 2010)

I would not worry about handling my share of net income. If your investment depends on getting a return, I would stop payment immediately.

We had an arrangement like this in Mexico and after 3 years of no payment, we opted out and rented the place directly. It was only a good investment because we and friends used it enough. YMMV


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## ian (Jun 18, 2016)

Apart from everything else I think you need to have a hard look at that 75 percent occupancy rate. Do you think that this number is reasonable given the climate? You might want consider calculating the number of days that you think a visitor would be interested in going to this location. Then deduct from that number the total days that you and/or any friends or relatives might use the condo. Does that bottom line number come even close to 75 percent?

We have considered buying in Central America-in Costa Rica-but in the decided against it for various reasons. Our insurance broker had a place on the ocean in Tamarindo, Costa Rica. She owned the condo for ten years. Her advice to us was rent, don' buy. Why? She carried the risk of a condo investment-assemements, decline in value, etc. Although she had a great experience her two comments were that a) she really could only use the place four-five months per year at most because of the climate and b) after almost 10 years of ownership her condo had not appreciated very much in terms of CAD. She felt that she would have been much further ahead financially to have invested the money in North America and simply rented every year. No risk, no responsibility.

We have good friends who have been expats in Panama for 25 years. They recently sold their business and are in the process of building their retirement home in Panama. They know the system, they know the right lawyers to deal with, speak the language, have excellent 'connections', etc. Despite this, they described to us in excruciating detail the hoops,legal and otherwise that they have gone through to move their project to completion. I think that you may be overly optomistic if you think for a moment that you can make a decision on the project based on applying your knowledge/experience with North American laws, business practices, and level of honesty to those practices in a Central American country.


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## baconbit (Oct 18, 2017)

Jaberwock said:


> I don't know about Nicaragua, but opening a bank account in some countries is not as easy as it is in Canada. The banks don't act as though they actually want your business. Opening an account in Chile took me three trips to the bank and about six hours of my time. Opening an account in the DR took about a month, and several trips to the bank, with the documentation required changing every time I went in the bank.
> 
> How often will you be paid? Wire transfer works fine, but there is a cost, so you don't want to be doing it monthly. If you are paid annually, then a wire transfer to a US dollar account in Canada should be relatively straight forward and not too expensive.


I'll be paid monthly, wire cost fees are cover in the contract. 



Just a Guy said:


> Instead of looking at the profits and what to do with them, personally I'd be doing a bit more research on the actual investment. I've seen a lot of these partial ownership hotels popping up everywhere, even here in Canada. From what I've seen, they aren't exactly what most people think they are. Now, considering the political situation in Nicaragua, I'd be doubly cautious, but then again I make money with most of my investments and really don't want to lose anything on a deal. Comes from the days when I started and couldn't afford to lose anything and has stuck with me.
> 
> Not saying this is a scam, but you may want to do some more research into risks you haven't thought of.





OnlyMyOpinion said:


> _my rental split is worth a 25% yield._
> What exactly does that mean? That you get 25% of any income over and above costs?
> Surely not that your invested capital will earn 25%?
> That would seem as they say, "too good to be true."





humble_pie said:


> wondering if you have ever visited nicaragua? if not yet, perhaps you'd consider putting a Hold on that down payment.
> 
> your post says that any net rental that may be payable to you won't come from rent paid on your unique condo property, instead it will be a portion of co-mingled net rents from the entire resort. This does not sound particularly reliable to me. It would be extremely easy for a local management company to prepare the books so that a net surplus of rent from all condos would be either low or even non-existent.
> 
> ...





kcowan said:


> I would not worry about handling my share of net income. If your investment depends on getting a return, I would stop payment immediately.
> 
> We had an arrangement like this in Mexico and after 3 years of no payment, we opted out and rented the place directly. It was only a good investment because we and friends used it enough. YMMV





ian said:


> Apart from everything else I think you need to have a hard look at that 75 percent occupancy rate. Do you think that this number is reasonable given the climate? You might want consider calculating the number of days that you think a visitor would be interested in going to this location. Then deduct from that number the total days that you and/or any friends or relatives might use the condo. Does that bottom line number come even close to 75 percent?
> 
> We have considered buying in Central America-in Costa Rica-but in the decided against it for various reasons. Our insurance broker had a place on the ocean in Tamarindo, Costa Rica. She owned the condo for ten years. Her advice to us was rent, don' buy. Why? She carried the risk of a condo investment-assemements, decline in value, etc. Although she had a great experience her two comments were that a) she really could only use the place four-five months per year at most because of the climate and b) after almost 10 years of ownership her condo had not appreciated very much in terms of CAD. She felt that she would have been much further ahead financially to have invested the money in North America and simply rented every year. No risk, no responsibility.
> 
> We have good friends who have been expats in Panama for 25 years. They recently sold their business and are in the process of building their retirement home in Panama. They know the system, they know the right lawyers to deal with, speak the language, have excellent 'connections', etc. Despite this, they described to us in excruciating detail the hoops,legal and otherwise that they have gone through to move their project to completion. I think that you may be overly optomistic if you think for a moment that you can make a decision on the project based on applying your knowledge/experience with North American laws, business practices, and level of honesty to those practices in a Central American country.


To answer everyone's main question about me being sure about this, i would like this post to clarify that I am in fact going to be buying this condo and i have already signed the contract and i have already completely liquidated and crystallized all the investments in my TFSA and putting a 73% down payment on this property. 

I know this property sounds like a foolish idea(and maybe it is) but I am well aware of the risks associated with such an investment. However I am in a place in my life where my tolerance to risk has gone up over the last 5 years and combined with being in my younger years(27 years old) recovering from a failed investment won't ruin me, but maybe cause a minor 1-2 years(most) set back, it will suck but i'll own up too it and learn from it. But truth be told I would rather take this investment and fail, than miss an opportunity and lose out on something potentially big. 

I have never been to Nicaragua, but i know certain I would rather be there than in Canada at least during the colder climates no questions asked, especially considering the fact this is ocean front property(literally walking distance(~300 m) to the white sand on the beach with bonuses of things that I love, which is skateboarding, the beach, nice weather.

My down payment was large because this unit is in the construction phase, and it needs investor capital to carry on with its ventures and development. This resort isn't even built yet, but i have good faith in this team. Through out the whole contract and communicating i was talking to one of the founders of the company the whole way through. They happen to be from Kelowna BC, so there is another bonus i suppose.
Anyways now that I have gave you’re a brief explanation, I would like to get back to the original question in the OP.

What would be the best way to handle that capital once my property starts generating income?(when its finished being built which depends on how fast I can pay it off)

cheers


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## baconbit (Oct 18, 2017)

update for anyone still curious,

I pulled the trigger. I called my mom and told her the news, and she wasn't exactly impress(I wasn't really that suprised by it tbh)

So from what i am reading online i can go about keeping the money untax from CRA by forfeiting my health care and drivers, (but still keep passport i do believe)

only problem is that i want to snow bird with this property too, so i am not feeling too keen on having to always re take a road test whenever i have to move back to Canada. Anyone else do anything similar?


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## twa2w (Mar 5, 2016)

baconbit said:


> update for anyone still curious,
> 
> I pulled the trigger. I called my mom and told her the news, and she wasn't exactly impress(I wasn't really that suprised by it tbh)
> 
> ...


So if you are remaining in Canada, you will have to declare this income each year.
If you decide to move to nicaraugua, you would file a final tax return in Canada with a declaration onbthe return of the date you left Canada. You should complete an NR 73 tax form to determine your tax status as non resident. You may or maynot be approved. You have to give up most ties to Canada and it can get complicated. You may not have to give up your drivers license.

Your story reminds me of a of a saying by a certain well known circus owner who stated how often a person like you was born.

Best of luck. I will be very surprized if your condo ever gets built. If it does, I doubt your occupancy rste will any more than 30 to 40%.


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## kcowan (Jul 1, 2010)

Also pay attention to details. Are there any special assessments that will be necessary to complete the project? In our experience, developers like to add $ payable for parking spots and storage rooms. One developer added the cost of common space that was used for the AC exchangers. We would never buy pre-construction anywhere. The developer is in the driver's seat and the poor owners just have to go along. They will not get possession until all contingencies are met.

In Mexico where we own, any rent is encumbered by
3% hospitality tax
16% Value added tax
10% Property management
15% Rental commissions
and finally the net is subject to local income tax at 25%. Any net is then subject to the Canada-Mexico tax treaty. So 100 - (3+16+10+15+25) = 31% before counting any shortfall in occupancy! Or any special assessments. Occupancy rates are in the 50% range for a good property on the beach. So you end up under water or becoming a tax evader. 

Of course you can avoid all these by moving there. That is what we do during the season for 6 months. We use off-season to do repairs and improvements. In the tropics, if you don't do regular maintenance, your property will quickly become uninhabitable.


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## Mortgage u/w (Feb 6, 2014)

I'm no expert, but my initial thought would be to open a bank account in the same country as the property. All income gets deposited there and is readily available should you require it. I'm sure there will be regular expenses you need to take care of on site. 

As for treating the income for tax purposes (if that's what you really want to know), it would be best to consult an accountant who is familiar with foreign property and income. I'm sure it will need to be declared regardless where the profits are being held, but you're best source of info would be an accountant or lawyer.

As for the investment itself, I can't help but comment at what huge risk you are taking. It's evident that everyone else who has commented here has your best interest in mind as well. 

Good luck to you, stay safe and be smart.


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## Just a Guy (Mar 27, 2012)

I'll look forward to hearing your story...maybe on a future episode of American greed.


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## Pluto (Sep 12, 2013)

In "construction phase". Hmmmmm. I've seen these drag on 5- 10 years before they get built, if ever. Pre construction sales are often a symptom of a financing problem. Good luck.


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## baconbit (Oct 18, 2017)

twa2w said:


> So if you are remaining in Canada, you will have to declare this income each year.
> If you decide to move to nicaraugua, you would file a final tax return in Canada with a declaration onbthe return of the date you left Canada. You should complete an NR 73 tax form to determine your tax status as non resident. You may or maynot be approved. You have to give up most ties to Canada and it can get complicated. You may not have to give up your drivers license.
> 
> Your story reminds me of a of a saying by a certain well known circus owner who stated how often a person like you was born.
> ...


Thanks for the info. Yeah upon more research, any asset worth over $100k needs to be reported to the CRA.
My condo isn’t built yet so it’s not worth anything yet(other than my down payment), so I will cross that bridge when I get there I suppose.
I guess any estimate low or high is just speculation, money isn’t my only motive in this move. Owning home in a country where snow doesn’t exist, is a pretty big deal to me as well. Whether I make money on this or not, it still feels like a win for me. Especially once I have this paid off. 




kcowan said:


> Also pay attention to details. Are there any special assessments that will be necessary to complete the project? In our experience, developers like to add $ payable for parking spots and storage rooms. One developer added the cost of common space that was used for the AC exchangers. We would never buy pre-construction anywhere. The developer is in the driver's seat and the poor owners just have to go along. They will not get possession until all contingencies are met.
> 
> In Mexico where we own, any rent is encumbered by
> 3% hospitality tax
> ...


Not exactly sure on how the taxes work in Nicaragua, I am entertaining the idea of being paid in cash(USD), I’ll just make several trips out there throughout the year. 
This isn’t like a rental unit to one person on a “x” year contract. My condo will be part of a resort that is currently being built right now. Think of it more like a resort village, spread across 25 acres of land. The resort will have shuttles running to and from the airport. 
My home will be located in the center of what is currently being built into a tourist center/resort. So, the company that runs the resort aspects of the future town will use our home to attract/market to customers in exchange for 50% of the rental income. Basically the home gets rented out by the day. The resort company will take care of everything from taxes to maintenance/repairs, even HOA, they are my property managers. 
Also I’ll be given a storage unit in a warehouse that is being built out there. 



Mortgage u/w said:


> *I'm no expert, but my initial thought would be to open a bank account in the same country as the property. All income gets deposited there and is readily available should you require it. I'm sure there will be regular expenses you need to take care of on site. *
> 
> As for treating the income for tax purposes (if that's what you really want to know), it would be best to consult an accountant who is familiar with foreign property and income. I'm sure it will need to be declared regardless where the profits are being held, but you're best source of info would be an accountant or lawyer.
> 
> ...


This was actually advised to me by a cohort who works in Canada, and owns commercial property in south Africa. I think it is a good idea to keep it close to my investment for any emergency costs, or even tap into it whenever I go and visit Nicaragua.

I know I have high risk but I’m not sure if I mentioned this or not but I own a home and have no mortgage, and minimal consumer debt <$5k, so say worst case scenario, I lose it all, sure I may be out 65k USD, but I still have my home, and my job isn’t going anywhere. 

On the flip side, say my home is built and business isn’t booming. That is fine, I can also rent my home out and move to Nicaragua, and enjoy a slower paced life, and come back and work casually in Canada, as finding work isn’t difficult in my line of profession as long as I am willing to be nomadic. 





Just a Guy said:


> I'll look forward to hearing your story...maybe on a future episode of American greed.


I wouldn’t invest in this if I didn’t believe in this. This company already created the first resort of its kind in the country, and is already starting some pretty big trends. Nicaragua is slowly but surely emerging. If you do some google research you’ll be surprised to see how far that country has come in the last 10 years it’s pretty impressive. 




Pluto said:


> In "construction phase". Hmmmmm. I've seen these drag on 5- 10 years before they get built, if ever. Pre construction sales are often a symptom of a financing problem. Good luck.


Been getting updates every several days, half the units are already sold, and they have over 100 workers on site


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## Just a Guy (Mar 27, 2012)

baconbit said:


> I wouldn’t invest in this if I didn’t believe in this. This company already created the first resort of its kind in the country, and is already starting some pretty big trends. Nicaragua is slowly but surely emerging. If you do some google research you’ll be surprised to see how far that country has come in the last 10 years it’s pretty impressive.
> 
> Been getting updates every several days, half the units are already sold, and they have over 100 workers on site


Do you think anyone who's been the victim of a scam has ever thought, "this is a scam, but I'll invest anyway"? Everyone who's been taken believed in the "investment". 

I notice you've never been to the country, never seen the property in question...you're relying on updates every couple of days...gee, no due diligence, no oversight...want me to send you daily updates about the progress? I can even send you pictures and biographies of the workers if you'd like. One of my companies does marketing materials, with some photoshop and some creative writing, I can ensure you sleep well at night.

Maybe just watch a few episodes of American greed, and see all the great real estate developments that would make people rich...

And those are in America, where the laws are fairly strict, not a country that goes into civil war every couple of decades and really doesn't care if it screws investors from other countries. 

I'm not saying this is an actual scam, but I certainly would have done some on scene due dilligence, pulled a history on the developer (not trusting the internet where anyone can publish anything) and some basics before gambling on the honesty of other people in a foreign country.

Of course, if your interested, I could forward you an opportunity from a Nigerian prince who just needs some help getting his funds out of the country...it's a great return on investment.


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## baconbit (Oct 18, 2017)

Just a Guy said:


> Do you think anyone who's been the victim of a scam has ever thought, "this is a scam, but I'll invest anyway"? Everyone who's been taken believed in the "investment".
> 
> I notice you've never been to the country, never seen the property in question...you're relying on updates every couple of days...gee, no due diligence, no oversight...want me to send you daily updates about the progress? I can even send you pictures and biographies of the workers if you'd like. One of my companies does marketing materials, with some photoshop and some creative writing, I can ensure you sleep well at night.
> 
> ...












(photo of one of the homes already built on said resort)

ocean view property, easy access to the best waves, the resort is being built on this specific location for a reason. no need to do any research on the property in question its already been done. This company just needs investors who have the liquid capital, and someone who believes in their mission. 

call it what you will, this resort company is already established and i have friends who have been to them, and they are legit. not to mention there are pro skateboarders who repute the brand. 
lol @ your hostility towards an investment that isn't even yours. 

I am have no problem sleeping as i have already mentioned I don't have many financial stresses in my life. I am 27, not 55 where the brink of my retirement relies on just one investment. I could leave my RRSP right now, never contribute and kept reinvesting dividends till im 67, my retirement alone could be funded off that. 

i think you are forgetting that I am in a position of higher risk tolerance. Live a little you only have one life.


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## Just a Guy (Mar 27, 2012)

You sure it's not one of these...





















If you google ocean front property and look at the images section, you can have your choice. Since you've never been there, or seen it yourself, you've got no way of knowing that your picture is any more valid than the ones I put up.

As for your pro skateboarders, they'll take money from anyone and promote their brand, just like any athlete...doesn't mean they know anything about the brands or products they promote. They want the money so that they can do their sport.

I think you confuse hostility with something else, but it's your money to lose, I personally don't care one way or another. Of course, I also like to educate people who may be reading this so that they learn how to properly evaluate investments.


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## baconbit (Oct 18, 2017)

Just a Guy said:


> You sure it's not one of these...
> 
> View attachment 16658
> View attachment 16666
> ...


strong coping mechanisms you have there, already disproving something before you even give it a chance. At least i am being open minded to both success and failure of said investment. you just pick to one side and think its gonna go your way. 

but hey if that helps you sleep better at night more power too you, like i said earlier, about high risk tolerance, i'm coming from a stand point where I can bare to take some risk. 

I love how you ignore the fact I have friends who have been to one of there resorts. 
I didn't think i needed to mention this but i guess i have to, but I have a friend of mine who owns the same property, and he told me as soon a he paid it off the company offered to buy it off him for twice the price he paid 3 years ago. 

but hey maybe some prince will profit from this like your theory earlier stated. 

i think you are in the wrong thread, safe and slow lane ---->

i'm not trying to get anyone to copy me, i just want to talk to others about managing property/income from another country


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## Just a Guy (Mar 27, 2012)

One of their resorts is not your resort, but then maybe you should look up the way the doodlebug scam works, or any pyramid scheme.

I love how you think you know me, or my mindset based on one thread. Shows you have a total lack of due diligence. Should serve you well going forward. 

Oh, this thread reminds me of another, probably the best thread I've ever read on-line. 

http://www.financialwisdomforum.org/forum/viewtopic.php?t=105756

It's very long, but worth reading from the beginning. He also did a distant (Alberta) real estate development (he lives in Ontario). Was completely comfortable with his investment too. I believe the developer also had a buy back guarantee in the contract. Also supremely confident in the investment. Give it a read.

Of course, you are different, just like everyone else...


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## baconbit (Oct 18, 2017)

Just a Guy said:


> One of their resorts is not your resort, but then maybe you should look up the way the doodlebug scam works, or any pyramid scheme.
> 
> I love how you think you know me, or my mindset based on one thread. Shows you have a total lack of due diligence. Should serve you well going forward.
> 
> ...


your condescending tone says otherwise. 

I love how you think you know my level of risk tolerance. My situation is far different than the couple:

they have a mortgage which i dont
They are in their 30s meanwhile i am in the 20s
my net worth is is larger than theirs, and not by a small margin

two different situations....

no loss of sleep


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## Just a Guy (Mar 27, 2012)

You seem to miss the part where I said I don't care about you, or your level of risk tolerance. I'm concerned about others who read this thread. I really hope you keep us up to date on how things go. I don't wish you any ill will, if you win, great! Go to vegas next and lay it all on black, many people have won betting on black, odds are nearly 50/50. 

Others who read this may learn about doing some due diligence, or may learn that some people are born lucky.

I also think you missed the point of the other thread, it's got nothing to do with their assets, risk tolerance, age, or net worth...you both share the same attitude when it came to investing in real estate. Almost used the same words to describe your no-lose scenario. Hopefully you won't have the same result.

I'm also not suggesting you'll lose sleep, it's just the price of your education.


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## baconbit (Oct 18, 2017)

Just a Guy said:


> *You seem to miss the part where I said I don't care about you, or your level of risk tolerance.I'm concerned about others who read this thread. I really hope you keep us up to date on how things go. I don't wish you any ill will, if you win, great! Go to vegas next and lay it all on black, many people have won betting on black, odds are nearly 50/50.
> 
> Others who read this may learn about doing some due diligence, or may learn that some people are born lucky.
> 
> ...


*

you seem the miss the part where i said i am not trying to get anyone to copy what I did. you are using a pretty pathetic excuse to be sarcastic, to try and derail this thread from its original intent which is to talk about dealing with foreign RE as a canadian. Unless you have some properties over seas, your opinion is irrelevant to me and this thread, and now we are turning this thread into a chat room. lol*


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## Just a Guy (Mar 27, 2012)

Well, you've got me there...I obviously don't know anything about real estate. I'll bow out of the conversation, since you seem compelled to respond to my comments, even if you feel they are irrelevant, you also seem to need the conversation to revolve back around to you, when you could simply not respond. Then again you're young and I'm obviously some geriatric person sitting around stuffing dollars into my mattress and eating cat food.

Btw, I never suggested you were trying to get others to follow you, but others do read this thread and may foolishly think you've got an excellent strategy. People are often too lazy to do any work when it comes to investing, it's called the hope and pray strategy. Sorry to burst your bubble, but my replies are not about you.


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## twa2w (Mar 5, 2016)

I assume you did some research and you know the reason the resort is 300 meters from the beach is that the first 200 meters from the high water mark is owned by the state and cannot be bought by a foreigner.
This can be leased for 99 years however.
In the case of your developers they did not do so in order to get the land cheaply.
A local or the state can block access to the beach in the future.
How valuable would your property be then?
Futher, many titles to property are questionable in nicaragau so the whole resort could be on shaky legal footing.

I realize you don't care and you may do very well on this but one should go into an investment with eyes wide open and researched. If you still decide to invest, fine, at least you knew the risks.
I have made some very risky bets in my time, maybe even riskier than what you are doing, but I always tried to know as much as I could about a situation before making a bet.
And just because you can afford to take a loss doesn't mean you should.

If I undrstand you correctly, your developers are building your section of the resort first and renting your unit out as a marketing tool to sell further build outs of the resort. You said they are taking 50% of your rent for this and other expenses. 
Most resorts might take 15 to 30% for rental expenses. They should be charging you less if they are using your unit gor marketing. This usually means the rents are less as they bring potential investors down to sell them the concept.

Best of luck to you.


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## MrMatt (Dec 21, 2011)

baconbit said:


> update for anyone still curious,
> 
> I pulled the trigger. I called my mom and told her the news, and she wasn't exactly impress(I wasn't really that suprised by it tbh)
> 
> ...


You need better tax advice. Holding a drivers license doesn't influence your tax status.


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## kcowan (Jul 1, 2010)

Would the moderators move this thread out of public view? That would address our concerns about others being influenced by anything in this thread! The OP got lots of useful input but was obviously not receiving.

Maybe rename the thread:
Confident 27 yo buys property in spite of sage advice which he requested but then ignored.

Hey we were all there before we learned from the school of hard knocks. It has been proven time after time that such people will not listen. They think they are smarter than us old farts...hubris and extra money: a hot prospect for get rich quick schemes.


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## Eclectic12 (Oct 20, 2010)

baconbit said:


> ... upon more research, any asset worth over $100k needs to be reported to the CRA ...


Not sure this is correct ... the articles I have read say it is the cost that matters. Where one has multiple properties, it would seem that the individual properties may cost less than $100K - one still has to report if the total is over the mark.

http://www.taxtips.ca/filing/foreign-asset-reporting.htm


There are also wrinkles to what counts and what does not as most people assume RE is included where shares held in a Canadian brokerage is not. The RE counts if it is not a personal use property (which your rental likely rules out) while the shares in the Canadian brokerage count in a taxable account (shares in registered accounts don't count).




baconbit said:


> ... My condo isn’t built yet so it’s not worth anything yet(other than my down payment), so I will cross that bridge when I get there I suppose.


Cost is what matters so I'd suggest checking out whether making the payment triggers the need to report or when the condo is made available for rental/your use.




baconbit said:


> ... Not exactly sure on how the taxes work in Nicaragua ...


A rather important aspect to find out about, preferably before signing on the dotted line IMO. After signing restricts your choices.




baconbit said:


> ... I wouldn’t invest in this if I didn’t believe in this.


And the people who sent money to scammers pretending to be CRA agents sent money while believing they were talking to a scammer?
Whether it works out depends on those building/running things - not your belief or lack of belief.




baconbit said:


> ... If you do some google research you’ll be surprised to see how far that country has come in the last 10 years it’s pretty impressive.


From googling, their progress forward does not include any sort of foreign tax credit or tax agreements/treaties to avoid double taxation. Where one is on the hook to two countries for income (Canada taxes world wide income for tax residents) - one pays double taxation.

http://taxsummaries.pwc.com/ID/Nicaragua-Individual-Foreign-tax-relief-and-tax-treaties


Cheers


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## twa2w (Mar 5, 2016)

I think the OP was asking for tax reporting advice rather than advice on the soundness of his investment. I think most of the responses so far have agreed he should have researched his investment more. So perhaps since this young investor has already commited, we can provide him with some help on the tax front.
So in that vein.
While living in Canada, you will have to report any income from the condo on your Canadian tax return. You will get a foreign tax credit for any taxes paid in Nicaragua.
Because it is being rented, you will also have to report the value of your foreign asset on your Canadian tax return if the cost exceeds 100,000 Canadian which it does. You will have to report it on your 2017 tax return as you have invested the money.
If you take the plunge and move to Nicaragua, you will have to file a final Canadian tax return showing the date you left Canada. If you are going to be back and forth which you have indicated you might, CRA may deem you still a resident for Canadian tax purposes. You should file an NR 73 to ascertain your status.
This will be done by assessing your ties to Canada. Family, owning a house, health plan, investments, and yes retaining your Canadian driver's license, and even retaining union mrmbership or professional associations may all affect this. 

You can find much of this stuff by searching the CRA website.

Many folks on this site have gone expat and will have more specific advice.

Do some research and come back with specific questions and you may be surprized at the help you may get.

Cheers


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