Cherry Chan is an amazing woman. She came to Canada in her teens, graduated high school and hustled over to the University of Waterloo to complete an accounting degree. She then worked in one of the big accounting firms, decided to buy properties sight unseen with her husband Erwin Szeto (boyfriend at the time … they’re now married with two kids!) and ultimately decided to quit her job to “go it alone” with her own accounting practice (www.RealEstateTaxTips.ca). She’s written a book, puts out endless blog posts with great content and has a second book on the way. We had a great time chatting with Cherry; here’s to living life on your own terms in Canada!
Hey everyone, this is Tom Karadza. And on this episode of the your life, you’re a term show myself, Nick, Cherry Chan. Sit down to talk about accounting. And before we get into the tax accounting for real estate investors with Cherry who’s obviously an accountant, that’s why we’re talking about accounting with Cherry Chan. We talk about her story because Canada is a land full of immigrants. Our parents are immigrants. Cherry is an immigrant and it’s a fascinating story. Wait till you hear about how her parents made it from mainland China to Hong Kong. Um, and then we get into her story and journey coming over here to Canada. So if you want to skip ahead Kinda to the real estate, uh, tax accounting part, you can kind of skip ahead 20, 25 minutes and we’ll jump into that. But I really think the value of this is listening to what different people go through because sometimes every, I think the grass looks always greener on the other side.
And when you hear someone’s story and you see, you hear, they’re kind of struggles and challenges and see what they’re fighting through. Um, I really think it gives you a bigger context and perspective for your own life. So I love listening to other people’s story, a stories I love kind of understanding how they got to where they are now. Um, Cherry is a real estate investor herself. Um, she not only an accountant but they’re hurt together with Erwin, her husband, they are investing in properties. So just all around great story, love sitting down with Jerry and, and talking. Um, and again we get into the tax stuff kind of more halfway into the podcast. So if you want to skip ahead to that, you can. And before we get started with that, I want to share something. If you’re listening to this and you want your own blueprint for investing in your own properties or you don’t understand how people are buying properties and you question like how are they able to buy one, two, and three properties?
You know, I hear it’s hard to, it’s hard to find properties. It’s hard to find cashflow. Banking is hard, everything’s hard when it comes to real estate and it’s kind of true. Real estate is hard but it’s possible and you want to own assets because we’re in the middle in this country of the destruction of the middle class. And if you don’t own assets you are going to be left behind. Mark my words. So if you want to understand how people are doing it, we have put a blueprint together from one of the investors we worked with. You can get that at rock star inner circle.com forward slash blueprint, that’s Rockstar inner circle.com forward slash blueprint and you will get that blueprint of an actual investor who is buying properties. And if you’re listening to this and you get that blueprint, just understand that there are hundreds and thousands of different people that we’ve worked with here at Rockstar to do this stuff. So you want to surround yourself by other people who are doing this. It helps you move along your own journey and it’s why we are so happy to be surrounded by people like Cherry Chan. So we had a great chat on this episode of the your life, your term show with Cherry will definitely be bringing her back again. And with that, let’s get on with the show.
Are you ready to live life on your terms? Is it time to take charge of estate business, building the economy, health, nutrition and more. It’s the your life, your term show with Tom and Nick. Go ride. Are you ready? Let’s go.
Okay. We have Cherry Chan with us. Nick, can you hear me? By the way, mixed, refusing to answer. Listen, every time that he’s on I want him to know that if I want to know if he can hear me or not. So Cherry changes with us and when we do. No, I’m just going to speak over your block. You out. Why don’t we do, uh, I’m sorry we can’t hear you. When we do a conference call Tom alone, He’s like, Nick, can you hear me? Oh No, no, no, no, not Nick. Can you hear me? Sorry. Nick, are you there? I know we were speaking on the phone like 10 seconds ago. Old Guy or something, but I just want to know like are you there or not there and also Noha is on the podcast with us. She bought probably you won’t hear her, but she’s listening in her mic’s live so she might just grab the mic and start spewing out tax advice to Canadians. Um, and uh, Noha just started working with us today. So she’s on the podcast listening to how we do this stuff and Cherry. Uh, I just want to start, I know you’re an accountant and all that professional stuff, but we need to talk about, and we’ll get to the tax stuff, but I need to understand how your mom and dad got to Hong Kong. So you got to tell us like, can you tell they were born in mainland China? Yeah, we’re, we’re in mainland
south in China.
And is it a small city of only 18 million or something?
Oh, no, I actually don’t know the size of the village that they were born in. Um, I think the villages are right next to each other and, um, they were born and they were born into a miss on China. And back then what they do did the government did was that um, they would rank people by, um, I guess how wealthy they are and the ranking would determine how much
warn you just get a stamp on your, on you.
Yeah, basically. Um, the family is bees on the family ranking. So we were, uh, we will rank at the bottom of the ranking, meaning that we like they may have some farmer, um, uh, rank. And so we receive supposing the, my, uh, my grandparents were receiving the least amount of resources from the government because communism, it’s about sharing all the resources and being redistrict it by the government. Right. So we were receiving very little and they were farmers, so they were working hard. Um, uh, you know, back in the days when you are farmers, you want to have the human resources to work on the farm. So they had seven kids. So that’s where my mom’s side
arranged marriage or, no,
I think they were arranged marriage. And they still married.
Cool. Awesome. Okay. So your, your mom is part of seven children?
Yes. Okay. Yeah. And then um, and then my dad’s side also at the same rank, um, village next door. Um, when they, my, well my mom’s Sy, uh, because there were seven children and daughters are usually rank. Um, the lower, yeah, lower. Um, so grandfather has two boys, the youngest, pretty much the youngest. And then my mom’s the second oldest. So she was forced out of school pretty much after I think junior high or maybe high school. Yeah, maybe great, great. 10 that she’s done. Um, and then my dad wasn’t so smart with school so he basically quit school after primary school. That’s what I was told. Okay. And so my grandfather could not stand the system so
that would mean stay in the system cause his kids weren’t in school or something. I don’t know. I don’t really how you want to get his allotment of whatever he was getting. Yeah. I, well he wasn’t receiving any risk bike because we were ranked the lowest. Right. So he thinks it’s so horrible sometimes. I wonder if Canada is just like full of people who weren’t ranked well from different countries. Like our parents came from nothing. Right. And they ended up in this country and I have something that I wonder is like everyone just hear like you didn’t rank in some other country. So now you’re here and we’re all kind of doing well here together. It’s like the land of misfits in Canada that, but it seems to be working. I Dunno. Wow.
Are the immigrant as well. I went through the, my family wants through the immigration process, right? Like there were a portion off the processes that you need to have entrepreneur. Like we went through the entrepreneur program to come here. Sold. There are a portion of the people that are doing at least somewhat well at their home country.
Sure. That’s fair. And I shouldn’t say that. That were just a full of cut their way to go. Dad, our dad came with $3 on a boat to Halifax and you know what? Next time you’re in Selfie with those, pick a specific route. Don’t just do it while you were in Canada right now. You are, you were stamped when you were born as a very low member, whatever. What I like about the story and I’ll, I’ll let you continue, but I like how open and honest it was like, look, you know, we didn’t want, you don’t have a big family because we enjoyed kids or anything. If we were on the farm, we needed not even when needed to leave or we need human resources. So we kept having kids because we basically couldn’t afford donkeys to kind of pull the plow. So we had kits. This is great. At least I was insulting. Everybody thinks basically associating all of us with dog as donkeys. Hip is great. Well No, I guess PC maybe just cheering. No, I’ve Joel,
the other side of the spectrum, right? I belong to this Chinese community and I’ve heard stories about how people are trying to come to Canada. China is big, right? There are, there is a portion of the people that are making really good money. Yeah.
And then there was a mic in front of your together
portion of the people that are not making money at all and trying to get out of the system. And, and so I’ve seen people coming here illegally trying to stay illegally as well. So light to your comment is totally fair. Yeah. Like it’s two different spectrum and we’re trying to find a night flying out of life here.
And how did your, how did your parents get over to Hong Kong?
So my dad was Tron, oh sorry. My grandfather went to Kong first. Somehow I, I have never heard about the story how he got to Hong Kong. So he was living in Hong Kong all the time and probably, okay. Oh, there is a, I don’t know if it’s the lake. Oh, we call it a river. How like how long would it take to swim it? It’s not that long. Okay. There, there wasn’t late back in the days when I crossed the bridge to go by to China to visit my family. It’s a bridge. It’s pretty long. But it’s not that long. Like it is winnable. Yeah. Yeah. So my dad had been trying to get to Hong Kong multiple times and I think Ellie’s over five, six times. And He, uh, he was not successful. He always got caught by the border guard. So, uh, back then or maybe even now, I don’t know about now, but back then if you got caught and you have no money to get yourself out, you would be locked in the jail.
So he was locked into jail multiple times. And through the, I guess mutual friends, my mom met my dad. Um, so my, my dad was like, no, she went, I’m sure I was, I have a jail and they went to Hong Kong together and my mom didn’t know how to swim until today. She still doesn’t know how to swim. And for some reason she’s the lucky charm and she went with my dad and apparently they were trying to high underneath the Bush because nobody really take care of shit pushed at that location. So she was hiding under the Bush and she got really lucky. Oh, guard just walked by her and didn’t notice her and she was able to just walk through all swim through a load open. Wow.
The bridge a little bit or something. Was there,
no, that’s back then. Well, there was a bridge, but she didn’t use a bridge. It was, she floated on something or, yeah. Oh maybe it wasn’t that deep. I’m not really too sure. But a guard was pausing by her and she’s some house. Neat. Then
you know, our father escaped from me. The reason I know about like your, you’re talking communism, like our father grew up in, so with socialism and uh, it’s weird. I was talking to one of his friends when we were over there a few years ago and he said, you know, in this area people used to work really hard. But then when socialism really came into play here after World War II, everyone kinda just figured out over a few years that no matter what you did, you would get like your piece from the government. So the work ethic of the younger people that were born back then, it really started to deteriorate because people were like, well, why should I really work hard because I’m just going to get something anyway. And he said before that came into play, they really had a hard work ethic and he noticed in his life how the work ethic had deteriorated really greatly.
And it, I just laugh now because socialism kind of getting reborn here in North America and now I’m like, just wondering, I’m like, does anyone who’s really propose a proponent of socialism, have they ever any spent any time in a country that had some of these, uh, policies in place? Like, do they understand what they’re going after here? And uh, it’s just interesting times me cause it, there’s definitely a resurgence of that talk here in Canada, but more in the states even, which is shocking to me. But anyway, we’re getting, we’re getting off topic a little bit.
Well, the, the uh, I mean I’m still trying to get you used to, um, I guess I get, I get a little bit of entitled to, even when I grew up late, when I say I grew, like I have a lot, I’m a lot luckier than my parents because my parents grew something in Hong Kong, light built something. And um, I, when I first graduated from Waterloo, um, I think I got to,
so when did you, how old were you when you came to Canada? It’s like steam. Okay.
17 maybe 17. No, when I first graduated from Waterloo, the accounting program, I will roll my exam and I somehow got on the honor roll and I couldn’t live with
aptitude somehow. Somehow. Oh my gosh. 99%. And now here I am on the honor roll. One of those people that have to do on the test. Oh, I think I failed. And you got 99. I didn’t do well at all. I got 98%.
No, there were a lot of smarter people in my class. No, seriously. Like, I’ve sure you’ve got 96 that’s fine.
That’s a good way to attract clients about your accounting abilities.
No, I was not like, I feel like I didn’t earn it. I didn’t the survey, but then I, I got out from school. I felt like I like it’s, it’s the system that everyone is saying like you go through the accounting firm, you’re supposed to be promoted every single year. That’s holiday accounting for him work back then. Um, and I didn’t get promoted one year and I got upset or I didn’t get a raise. I get really upset. But it’s just that that sense of entitlement really grew over me. Um,
as you felt like you should’ve been getting that right?
Yeah, but it’s, it’s the other way around. Ever since I started my business,
cause now you know, it’s Kinda like what you earned. Yeah.
Yes. Oh yeah. 100%. Like it’s like,
cause who knows? Maybe you were being looked over for incorrect reasons, Cherry, but now that you run your own business, you kind of realize and it’s, you are you, are you going to learn everything you go.
I was told Talia Brag, but it wasn’t, it wasn’t, it was, I wasn’t like I am today.
Huh. That’s interesting. Wow. Okay. I’m sure you keep, your parents came and saw your parents would get to get into Hong Kong. They start their own business of some sort.
No, my dad was bad at school. Okay. So he had no education. So he, I think he’s realized that, but he has this drive in him that I don’t know where he got it from. And he essentially, you started learning, uh, being an electrician. So he rolled his exam and he learned on the job. Back then there wasn’t light license and stuff. And so he started learning on the job and over time he got to, uh, write his first eye exam and he passed it. He, so he’s some sort of a licensed electrician. Um, but there are multiple levels. He failed a second level multiple times. It’s really funny. Um, the overtime he started learning, um, you know that saying you’re the average of the five people that you hang out with. So he tried to hang out with people that are better than him constantly.
So he had that vision and he started driving and then started his own small business. Um, he’s a contractor, general contractor, but he doesn’t want to deal with that day to day residential people. So he decided to go for the bigger stuff. So he mad. These people, um, add are bigger charitable organization is like home. These charitable organization would have schools, hospitals and all age homes that they operate. And so he would bid on the projects for these, uh, bigger, like bigger projects rather than the scholars. It was a hustler. Yeah, he was. Yeah, he is still is. He’s here in Canada right now? No. Oh, he’s not here? Yeah, he’s a, yeah, I’m the only one in my family. Yeah. Got It. Okay. And then what’s your mom doing then over there? A too. Personal question. No, no, no, no. My mom was a stay at home mom, but he’s also a, she’s also a hustler, so she would get both.
Your parents are hustlers? I like this. Yes. So she used before she had us. Um, I think she’s regretting it now. She’s regretting having, you have both children. So young she opening, he said that, well we don’t like, like don’t like, she doesn’t like to take care of, gets off. And he said it multiple times. Your kids over there and pawn them off on like our Asian people. Just more blunt than any or any other culture in the world. No, it’s just so she, um, she went, she had no skill. It’s not had no skill. She was a teacher by home, back in the village. So when she went to Hong Kong, she learned how to assault, operate a machine. And back in those days, Hong Kong has this big textile industry. And so she started from Hong Kong and then she, when she first came to Canada, she did the same thing.
She worked at the factory. And back then there were still a few factories here locally operated by Chinese people. Um, anyone. She’s picked up the skills there. And when she was raising us, she would have a machine at home. And because it’s such a crazy industry. Um, so they would actually have these driver that would take all these materials and drop off at the bottom of our building and we would put poor card, no back home. And then so she would take it back home and then start working on it. They are now while we are doing at home, she would be the seamstress or whatever. Wow. Okay. Then you decide they decide to get you into Canada and my dad, uh, so it wasn’t me. It was merely really for my brother. My brothers didn’t really do well in school. My Dad, no one did well in school. No one has any skills, but you’re the one who got 96% of Waterloo and account. I didn’t get 6.86% from Waterloo. I got my mind. You got 96%. Yeah. Yeah. Just for the right common cause for the people who are, Oh God, 96%. It’s not very fair. They know someone’s getting, someone’s going to
go look it up and be like, you guys. Yeah. They can email us and complain.
Um, so, um, my, my, my, my mom usually did really well in school, but she never got the chance because she was the second oldest. My brother was more like my dad, so he was a lot better with his head’s then, um, his, uh, school academic. Um, I’m a parents today that I’m a parent now. I would be able to relate to how I would have taught my brother if I were his mom. But back then we don’t know. We all hustle and we just thought that was a school is the biggest thing you need to do well in school at all. Good. Yeah. So my brother wanted a worse school in Hong Kong. Why? I was in the best school, like West School in our district, in our area. And I, I went to the best school and you say, Hey, to go to school in Hong Kong.
Um, very little. Yeah, very little. Uh, it’s publicly subsidized. There are private one that you have to pay for. Um, so he, my dad fell. Dot. If we give him a second chance to come to Canada and he would be able to learn some English. Um, back to my dad’s business for a little bit because my dad is bidding on these big contract and they are all in English. I remember he didn’t even graduate. Maybe, maybe he barely graduated primary school in, uh, China. He had no training in English, so he was paying people to do translation and a bidding. The bit itself is like this thick. It’s like two, three agents fake because they lay out every single thing that you want to do it right. All in English. So to him, to my, to my father, it’s his, um, Kryptonite English is his Kryptonite. He felt inferior to everybody else around him because of English. So, um, so he wanted to us to, he mainly wanted my brother to have a second.
Wow. So is your brother here now? No. Where is he? He’s in Hong Kong working for my dad. Oh, okay. The whole story was going to end. Did I miss that? I thought the whole story was going to be the brother is here. So you’re the only one who is left Hong Kong?
Uh, yes. Yes. So we both went to school here, went to high school here. Um, I, I think my brother finished high school. Okay. Um, he might have done the couple of years of college, but I don’t know if he asked. She finished.
So you went to school high school. So when you came you came here by yourself or just with your brother? With my brother and my mom. Oh, and your mom came here from the beginning? Yeah, they both went back. Yeah, they both went by. Wow. Yeah, that’s what you came over here by herself. They put you up someplace, you went, started going to high school by yourself with no one around them. Like Whoa, that’s, that’s aggressive
light. Having my mom and my brother around was pretty aggressive too. Like at the time I, when I was in high school in Hong Kong, we went through English, English school, but we never really needed to speak the language. Like, I mean I studied accounting or economics in English. I know the terms, but conversation wise I didn’t know anything. So when I first came here, like before I came, even arrived to somewhere like two weeks before I came here, I went to um, a study abroad trip to England and I thought, oh well I already went through that. I knew some English. I’m going to be okay. Like I could come on the k a little bit, but I wasn’t, if I turn on CB 24, it was a huge chocolate to me. I turn on the TV, watch the News, CB 24 I couldn’t understand.
I coulda told you got to watch the kids shows man whose kid’s TV? I’m going to the news right away. That’s aggressive.
So I couldn’t understand a thing and I have,
I stole it when we were in Croatia, I used to watch the smurfs [inaudible] with a, and it would be an English, but it would have the Croatian like captions, close caption entertainers. I think this is perfect because it was kind of like easy Croatian, you know, because the language was really easy. So yeah, you missed out going to the news, you’ve got to go to the cartoon.
But then I thought the thought the news was the easier one. Then the conversation though Riley, it’s proper. So at least because the Hong Kong, when you learn English is all written. So it’s, it’s all proper in ah, English versus the other. Like if you watch a stroll, it’s too conversational, too, too much slang for me to understand. Anyway, like you told me years and years,
I guess you go through high school, you go to Waterloo, yeah. When you finish Waterloo and you start working at one of the big accounting firms here in Toronto.
I when I was in Waterloo, so we had an amazing Coopa Graham. So I started in a small Chinese Asian accounting farm and then, um, and then after two times I went to a medium sized Jewish farm, uh, in Toronto. Which leader merged to, uh, into Deloitte. Okay, got it. Yeah.
I wasn’t going to say another culture. What was with an agent from then? It was with a Jewish firm and then there was these Scottish guys and I started working. Okay.
Yeah. Got It. Yeah. Got It. Deloitte one was fun. That me, the Jewish from was also a lot of fun. Yeah. Okay. Okay. So then at this portrait where the trainees for him wasn’t fun. Oh, it was also a, uh, exceptionally fun. Oh yeah. White with like 10 girls the same age as us. That’s how I met all my partners.
Oh, cool. Okay. And then so you speak Mandarin or Cantonese?
I, uh, my mother tongue is Cantonese. I can speak Conversational Mandarin. Okay, got it.
Yeah. Um, wow. What a journey. Jesus, I mean Cherry like you are a strong woman, so congrats to you. Like, you know, your, your, your parents aren’t as strong as my mom. Yeah. But just hearing the story, I mean I’ve, I’ve seen Nick and I say this all the time, but being born in this country and then having your own children in this country and then trying to tell your children, look, this is a joke here. You know, this is also easy. Don’t complain about anything. You know, you’re got to see these other countries. There are a disaster. You know what I’m curious. And it’s something I was asking, asking, you know how earlier today’s why, so like why Canada? Like what brought what like, so I guess like why not did you guys look at going to this us? Did you look at going to England, you know, why was it that you guys decided to come to Canada? It wasn’t the easiest access for school for you and your brother?
Um, I think it’s the cheapest dog that had the time. I, I’m not sure. I think it’s the debate between, uh, um, Australia and here and us is notorious to be tough to get in. So I think it’s a debate. The debate was between the two and Australia on here where we were at both. We are both really similar in terms of pricing and everything. So
yeah, big, there’s a big Asian culture and in Australia, just because of the proximity. I remember when I was there, it was, you know, even though the Australians there who were born there, they’re like, yeah, over the last, I mean I was there for 10 or 12 years ago, but they said there’s just the, the amount of Asian influence in Australia had been growing like heavily at that time. So I’d imagine it’s only increased with the outflows of Chinese people and Chinese money too. All over the world, right? Oh yeah.
Yeah. He should have seen the market village. Oh, not Markham Village, star Mark Comm. Um, mall. They have lights, Sykes and fifth and then they have um, Mercedes, sorry with law I said, no, no, it’s good, you’re good. But I’m also like all these different light nice stores. There is a jewelry store like from Hong Kong located nice mom. I feel mall in Markham. It’s all like when I grew up eat Mofo mall was not as Nice. Nearly as nice.
I think I liked her, the Chinese Mala and mark them to buy illegal DVDs for like specific model. Oh, sorry. I have the wrong block off. And that’s where all the nut, that’s where all the knockoff stuff is. She’s talking about the real [inaudible]. I couldn’t afford any of the real stuff. Yeah. What’s it called? Martin Markville
muffle. Yeah. It’s owned by fear Ville. I think. Really? Maybe. Maybe Oxford or
you know what? Sometimes I just like going where there’s a lot of Chinese people just to see how much money. Like just to see like all the designer stuff cause they’re caring. You know, one in five people is carrying around a bag that was worth five to 10,000 bucks. Yes. And it just blows my mind. I’m like how much? How much money from the manufacturing? The one over to China, like how much money went over there and it’s now coming all of it. Spend it on this look for money. Went there like way more than I can imagine. Right? Well after World War Two all the money went to America. Europe’s destroyed. All the money goes to America. They have all the factories. Yeah. Then America ships all the factories for cheaper labor. Let’s be frank. Yeah. To China, they get all the money. Like, this isn’t even a mystery.
Yeah. Right. Yeah. And then you cook here. But we consider what the average Canadian that’s been born and raised here, that doesn’t have much of, you know, maybe hasn’t traveled that much. We’re never what they consider wealthy here compared to what’s seen in, in, you know, in Asia, Middle East, we were speaking about earlier is like if there’s a big massive gap, well, what’s the population of China right now? Do you know? No. What is it? A billion? It’s gotta be 1,000,000,003 or something like that, I’m guessing. But if you take the top 1%, like what’s 1% of a billion? 10% a hundred million. 1% is 10 million. Um, so am I right there? So what’s coming up? There’s one point 4,000,000,020 17 it was like 1% 14 million. I Dunno, I’m doing the math too quick, but that’s right. Then Canada, the population of this country is 36 million. So that means the top 1% you could ship over the 1% here. It’s like half the country of Canada, you know? And they’re like loaded. Like what’s the top 1% in wealth in China? Think about that. Yeah,
smokes. The way they make money is so different to my pa. My grandparents have this con like, I don’t even know if it’s it’s call condo. I’d a unit. Okay. They separate it into two units and rented one out and it doesn’t have elevator, it’s like 2030 years old. And it’s obviously over the last 2030 years of development had been crazy. Right. So being one of the older building, meaning that you’re basically in the middle of the town and so the government is now looking to, or like some developer is looking to buy the entire building, but instead of getting the, instead of getting money you will, you will get a compensation for a new unit in the new build building, which is worth significantly more than what you have. Um, so they are looking at getting light two, 3 million back while they pay maybe 200, 300 RMB back in the days. So like the, the return is crazy. Like how they make money is also crazy.
So they’re really just making money on appreciation of assets that they’ve owned stuff.
Yeah. My, my, my mom pay for it. That the kids pay for it, but yeah. Yeah. Like it’s, and Lynn, because farm Len was, you now exchange to bill stuff. Like it could be shopping mall, it could be anything on top of it and sold. There are a lot of people that got rich like essentially overnight too.
Different worlds. Assets. No, that’s the same thing comes to assets. It just appreciate the different levels when you have like billions of people swarming around. Right. And the, and the inflow of money that you have are going to inform of money. It’s like what happened at the Toronto area, right? Like what’s happened in the Toronto one of the last 10 years and it was the inflow of money. Yeah. Caused asset and not just real estate. I mean what, we can talk about real estate but stock markets and stuff like that. But it’s like, it’s the, the, the, just the, the huge influx of cash to change the value of all these things and mess up everything you’d and the continued population growth and it’s no different in China. Like what happened, like, so in the last 10 or 20 years, like you said, there’s been this huge growth in China, right?
All of this, you know, there’s been the, the development of mental crown middleclass a lot of people have moved up kind of the wealth ladder and things like that. Yeah. But the people that have been left behind, what are the people without assets? So if you owned assets, it’s a great example because if your owned assets and over to that, then last 20 years in China, you immediately, without doing anything else got further ahead and jumped up. The kind of, you’ve got to hire stamp or whatever you were talking about. You were graded as a higher human being in China, rented when you were born. Right. Lowest class burdens.
I don’t follow as much as probably you guys do. I could only speak from my like relatives. Uh, um, my experience, my a stories at the stories I heard from my relatives, my mom’s side, uh, the seven brothers, oh, the seven siblings. Um, in November I went back and I saw all seven of them include like all of these liens, including my mom and all of them. Each of them would have at least one property at least if not multiple. And then obviously they’re talking about like millions of dollars that they pay, like maybe a couple hundred thousand dollars for and now it’s millions of dollars and they worked so hard to pay off or worked so hard to come up with the down payment initially to pay for pay for it to buy that asset. And now it’s appreciated like crazy.
Yeah. There’s the people without the assets over the same time period. Yeah. It’s the same story kind of. It’s, it’s kind of sad, right? Yeah. It’s the same thing when war broke out in Yugoslavia, they are like either you, you, if you had assets at the end of it, you kind of made out. Okay. You know, some people grabbed assets illegally of course during that kind of thing. But if you had assets and stuff you kind of made out, you didn’t really lose your position. But if you had nothing, any, any paper dollars you had just kind of went worthless and you went even further behind. That’s sits are always the key. Um, wow. That’s crazy story cherry. So would you, are you, would you ever leave Canada? No. Your kids are born here.
Yeah, my kids are born here and um, uh, my goal is to visit my parents once a year.
Yeah. And you’ve been doing that though, right?
Not as often as I want. Probably once every other year.
Cause you guys are always on cruises where you’re, instead of visiting your parents, you’re going on a cruise in the Caribbean. That is everyone at every time I talked to you, you winner, winner going on some other crews, you know, did your parents know about that? Choosing the cruise? Would you like us to communicate that they don’t speak English. That’s okay. There’s Google transplants. We will communicate to them. Try to convince my mom to use Google translate, but she doesn’t really want to. Um, uh, it’s 15 and a half hour flight give you don’t worry, excuses. You want to tell yourself cherry that’s okay. And there’s no built in babysitting once you get there. So like there’s just not that much upside. Yeah. Okay. So then take us to the transition. You leave the corporate [inaudible] corporate Canada and how long have you been out on your own as your own accounting firm? So all officially it was 2000
going on 14, but before that I was doing a side job, like smaller, but not going after any,
it’s already been five years that you’ve been out on your own. Yeah. Yeah. Good for you. What a story. So, um, and then I’m curious that transition to go out on your own scary like this is it what you thought? Harder. Scarier. Oh, it’s so hard. It’s hard, right? It is really hard. I like for anyone who start a business, what could we be able to relate? Uh, it’s so hard. Um, I thought I just need to follow Tom and Nick system. Just write some flop pose and that’s that. That’s it. And then all the, all the people. Well, the funny story was that when I first
got licensed, I got my realtor license. I’m not practicing my realtor license at all, but when I first got my license and I thought, oh, I just need to be a ca, then people would come to me. It’s so, so naive, so silly. I use those nice words, but it’s, it’s so silly
wanting to drive. Did your five years in now you’re surviving,
surviving. But I’m not like I could do a lot more.
Yeah, we all could. You’re just a critic of yourself like all of us are, which is normal. Yeah. So, okay, so you and you pray primarily the way we crossed paths is because use basically almost, I don’t know if you specialize or have, you tend to, but you work a lot with real estate investors and because of that you’ve, I think you’ve probably accidentally kind of learned all the ins and outs of the Canadian tax system as it applies to real estate investors.
Yeah. So I started investing first. On the other day on slot on Sunday. We just went back to the first, uh, investment property that we bought before I went out on my own. I was still working, um, on. Okay.
Vince, you w was that the one you bought with Erwin? Amen. Yeah. Okay, cool. Yeah,
so the time we were dating, uh, we were still dating and um, he introduced me to this idea of investing outside of Toronto because I had a nice town home, executive, townhome. Uh, I make light maybe a hundred grand, like not even a hundred grand at the time. I drove that thing though. I thought you guys kept it. We kept it, I wanted to sell it. Um, couldn’t get the price that I wanted, but it was, it turned out to be a blessing to be honest. Yeah. So I had that a townhouse, I bought it and it’s now close to a million, not quite a million, but I, we financed that property. I had no money. I was living paycheck by paycheck. Yeah. Look, everyone. Yeah. So I refinance it for some reason. I don’t know why I would trust this guy. He went and do shot some shopping and you guys, Irwin, yeah, and he’s, I Wallace buy this property and I’m like, okay, okay, where’s the nature?
I just sign. I didn’t see the property until I think renovation closing after closing and went out to see the property. He kept saying, Oh this is a great property, this and that. And, and I in my mind, all I thought was, okay, so I’m supposed to be used, um, like buying it with this guy, you know, the joint venture thing like you put down that put up the, all the capital and credit. I was supposed to be the money partner and uh, in my mind I was thinking, okay, if this relationship doesn’t work out, at least I’m on title. I could just take him out. He doesn’t know. He doesn’t know. That’s any of the back of my mind. But at least the worst case scenario, no, I don’t know. But it’s true. It turned out to be one of the best decision ever. I’ll, we bought the property for 230 put in like maybe $30,000 to renovate the basement or something now six bedroom and it’s been rented for $2,700 since pretty much three months in.
Got It. Good for you today. Yeah. Yeah. And you survived. So you’re, yeah, you’re surviving real estate properties, you’re surviving, building your own business and you’re surviving at all. If you can handle all that, then pretty much you can do anything. Maybe you’re going to swim one day, maybe you’ll swim Hong Kong and it’s too far going that way. No, no, he can’t go there. It’s too far. But yeah, you’re tough. Awesome example for all of us. I think we can all learn just from your journey. That’s a lot to learn for it from a, for all of us. So something I wanted to ask you is just about real estate, I guess in general. Um, what is top of my, what’s getting, is CRA coming down in anything? I think HST’s coming up a lot. What are you seeing from the tax front that real estate investors should know about or you want to talk about?
Um, so see how he has a website a couple of years by cause since 2015, they have been telling the whole world at the Io trying to crack down all these um, uh, request a, um, whatever fraud that they could fine you sign, she’ll eat it easy as and lowest hanging fruit is HSD rebate, uh, for people who buy a brand new house or a brand new condo and claimed that they move in and they would, um, they do not move in and they rent it out immediately. And so we’ve seen a lot of cases that the AH, people are getting audited on. When I do my own research to do my, to write my blog ball is I see these court cases keep coming up and up essentially HSD rebate. If you buy a property, you don’t lift there, you rent it out first. Even if you move back in there within the year, you still don’t qualify to claim the rebate. You have to be the first one moving, living it. Okay.
Are they claiming the rebate or if they’re buying like a preconstruction Condo, was the builder getting that right? Yeah, they assigned a bill. You’re signing that rebate to the builder. So then they are moving in and then what the person who bought the Condo is having to pay that HST rebate out of their pocket or they’re going after. Can you go after the builder then?
Um, so the way it works is that day day, the only way that you can assign de HST rebate to the builder is that if you,
you say you’re moving in. Yes. Otherwise they’re moving in but then they don’t actually, so it falls on you. You, you’ve done the thing. Yeah. Cause you’ve assigned it back to they’re coming back to you saying, hey, you owe us the money back. Got It. So builders in the clearer you are the money to the government, no surprise there and you’re, you’re, yeah. And you’re not, you’re not going to really be able to win that. Like that’s going to be pretty cut and dry.
Yeah. So, um, they are cracking down on it probably based on the um, on the, on tenants, I don’t know, address home address if they change every one. Yeah.
Do you like it might just be like, you know, picking apples from the tree. That’s how easy it’s going to be to do that. A little bit of cross reference. Yeah. A little bit of work on this. Your race front, they’re going to figure that out. Yeah.
So like with a one year lease, which you would have normally for a real estate investor, you will be able to get the same amount back. Uh, you just need to pay the HSE upfront and at the time of, um, um, at the time when the leases, when you rented out with a one year lease, you just need to apply and then you would be able to get the money back. Yes.
I think that’s what most people don’t realize though because if they buy these new properties from, the builders are going through this list of documents, okay, sign here, sign here. Most people aren’t reading half the stuff. They’re us, be honest.
And they don’t even realize that if they do it the right way, that yeah, it’s a little bit extra money up front up front that you have to pay, but you’re entitled to the same rebate. You just got to go take a different path to it. And what is it? You have to, you have to be renting it out. You can’t be renting it out, but it’s going to be a minimum of one year to another family, right? So let’s do it. It’s got to be a minimum of one year lease, so you can’t go month to month. But if you sign a one year lease and you’re entitled to this rebate,
well, if you made a mistake, uh, I have a solution. So all you need to do, it’s on a simple, but you just need to fill out a form with a new residential rental rebate. It’s called new residential rental rebate form. And you just fill it out properly. Submit it to Seattle. A write a letter saying that while you claim it on, uh, Mr [inaudible] claim it under the new residential housing rebate, not the rental rebate. Um, so can you transfer the credit to over to de Neil rental rebate and they can do it, um, as soon as long as it’s done within two years because the rental rebate, you can only claim it within two years after closing. Got It. Okay.
So you’ve seen them be successful. So is you, have you seen that be successful CRA come back to people who have mistakenly claimed it and they said, look, it’s actually a rental. Here’s the lease. They’ve been able to kind of, I guess they would have to initially pay the fine and then go back and apply for the, the, the rental rebate.
Um, so actually I just read a case last night. Um, the same like this taxpayer was the one who got caught by CRA, didn’t move in. Um, and the judge actually made a comment while the, he, the taxpayer appealed, um, because when she came back, she pay yet, like you said, she pay for pay for the fine and painful to residential rebate bike all back to Sally, but they pass, she passed, um, uh, the two year that line. And so she appealed to the court and the judge said, well, there’s nothing I could have done, but what you could should have done is that you submit, like I said, uh, you submit the application at the time, just transfer the credit over to the rental rebate because it’s probably the same amount anyway. So then that would have, so allow her to apply through all of that, that period. Uh, but because it’s after the fact, you would not that that line is Pretty Columbus.
We also hear a lot of CRA come by the time CRA comes back to some people, it could be late. Yeah. Okay. I see.
And we’re seeing a lot of dirty business too. This is separate from anything to do with CRA or somewhere where some people we’ve heard of in Toronto that are purposely going around and buying condos, getting the person to sell the Condo to declare that they haven’t moved into it and they’re innocently doing that. Then they buy the condo and claimed the HSD credit and then the government’s coming after the person who sold the condo. Yeah. Because they, they mistakenly said they were gonna move in because I, like Nick said, I think a lot of people just don’t even know what’s going on when they buy a condo with so much paperwork. Yeah. And these people are preying on these people. Uh, it’s nasty business, you know, like it’s, it’s, it’s just kind of bullshit. Yeah. But, uh, it’s unfortunate that stuff’s happening, but it’s not a CRA issue, but it’s just people playing with the rebate money a little bit and you know, some people are getting caught and it’s costing them thousands of dollars. Unknowingly
I was $24,000 is quite a bid.
Yeah, that’s right. I forgot the calculation on that. That’s right. Okay. So there’s that whole HST issue. And then just in general, um, I, I don’t even really know if I want to talk about corporations with real estate. Cause like there’s so many, like when you get like three accountants together in a room, they will not agree on using corporations. It’s like you guys will get together and it’s like getting three lawyers in a room. They’re never going to agree about anything. You got three accounts in the room. It’s the same thing. Yeah, it’s been, so having said that, what, what is, what do you do, do people, is it wise to use corporations to own real estate or not?
So we have a late, I have revise, uh, seven questions that I normally offer to my client, my prospects bikes to a tee time or whether they should incorporate one. One big thing is your strategies, right? So if you are buying flips, you or your intention is to do flips or assignments be construction assignments or you are thinking of doing land developments, those are active business hundred percent put it in their corporation. They are real business. Now, if you’re doing, we’re talking about buying long term buy and hold and it goes back to your long term goal, right? If you are thinking of while I’m going to bill a m empire, at some point you would think died, your personal name would be, um, would be uh, taking on too much risk. I have a client who is uh, um, the uh, real estate expert in a joint venture deal and he’s the one running the business day to day, uh, the client facing side. So Tenon managing the contractor and all that and somehow someone got light fell at the property slip and fall and sue the property owner. So his joint venture partner and him altogether. And the insurance company is not ensuring him who is not on title and so late to certain extent, light late. I don’t know how, like I’m not a lawyer, so I don’t know if a corporation is going to provide much help, but in a way like you feel better at least that
they are from a liability point of view. You’re inside the corporation. Yeah. Typically, I mean, we’re not lawyers, so do not listen to this as legal advice, but we’ve always been told it’s tough to break the corporate seal. Yeah. So that if something’s owned inside the corporation, any liabilities contained within that corporation. Again, if you’re listening to this get legal advice, do not listen to what we’re saying. Yeah. Yeah. And tough. Not Impossible. Yeah. Right. Yeah. Yeah.
And then I also have a, um, I also have a client who came in and told me that, uh, his rental house got blown up by a basement tenant.
This is like a Rambo, I hate you upstairs tenant. And they didn’t like Ryan bode that thing down. He
was enjoying himself, burned burning those marijuana oil. Okay. His men. So it was all in. The neos is back in the fall or October in wipie. So the whole house lift up for a little bit and then drop back down.
No Way. No. You must be producing marijuana oil or something like that. One’s kind of joint was this guy some strong ones? This is how the house was
not deem I was deemed unfit to live in afterwards. So the whole house has to be Terry down after and it like, I mean I tell people while there is no, nope.
But why? Yeah, there’s no tax benefit. Even that like insurance would you have the right insurance? I assume insurance is going to co I don’t even know. I’m saying that I didn’t even know. But I’m assuming the proper insurance on at home cover stuff like
so that that was covered by the insurance. That does scary part is that you don’t know what insurance don’t cover. Yeah. And then for liability purposes, okay. Well but that, that’s beyond me. If people are really setting up corporation for that reason these days now then there is something called tech suite integration. So if you set up corporation, um, technically speaking you, um, you basically pay it more or less the same amounts of tags. Whether, yeah,
I know I hate this whole concept. The government of Canada, that whole tax integration idea is that even if some of your money is coming in your life from a corporation or some of it’s coming personally, uh, personally, they’re going to integrate the tax so that you pay the same wherever the money’s coming from. So if you take out money, the via dividends and some personal income, it’s kind of like, I feel like such, like still like a rip off. Yeah, we’re on the same page with that.
Okay. Uh, but um, most importantly, the latest is that um, uh, I guess Justin Trudeau and bill more, no implemented a tax change and one of don off Ram to the tax change. Uh, in terms of income splitting is that you would be able to structure your corporation and certain people, the way income family members can own shares for over certain percentage, I think the percentage is 10%. Then those people can receive dividends. It doesn’t, it the income that they receive, whatnot be subject to Don Neil, a tax on split income tax. So that’s not right.
Capped at what amount? Like 10% of whatevers. So if they own 10%, it’s capped at 10% of whatever’s coming out of the car.
No. If they own 10% share or more minimum 10%, then the dividend distribution it to them would not be subject to the highest hikes rate. It’ll be subject to their personal tax rate. Yes. So the whole situation would not be subject to that tax integration stuff, uh, now, but then the key here is that, uh, if that corporation is providing service, it’s, it gets exempted from that exception. So, uh, providing service means like, uh, doctors and dentists,
so they don’t want to income split with doctor in town and professional services can account into, I guess. Yeah. So you’re getting screwed in this under this scenario.
Kids have to y’all okay. It doesn’t really matter.
Okay. But you’re sending the money to Hong Kong to buy condos and Hong Kong or units or whatever they’re called. I can’t afford those condos. Yeah. You’re buying an car where you buy one script for to go find a mailbox. Can you buy a mailbox? Even afford the parking spot in Hong Kong. Sorry. Canada’s a great country. Everything’s on sale here. It’s cheap. Yeah. That’s why everyone’s coming here. I know. I know. I looked at the last nine people who bought on my street. I’m pretty sure they’re all Chinese. Yeah. You know, it’s so, it’s fascinating. It’s an interesting time in this [inaudible].
Oh yeah, yeah. Uh, so, uh, sold the question threw back at coe is that, is was the corporation a corporation that only on a investment properties consider a surface court in this definition. Got It. Okay. So if it is not, then, then obviously you can leverage again, so split income, right. But if it is considered a service Corp, then you cannot split income then see, oh, a provide a really, um, great area. Great answer. Oh, of course. Yeah. So all yeah, if you provide certain servers then it is considered a service Corp, then you are still subject to the Tossi route we call it the new rule is called Hasi rule and yeah. So that, that was, that I thought was interesting.
Okay. So there’s something else I wanted to ask you about. Well, I got to go back to this, this rental property thing for a second because I looked it up. So, because it’s a, it’s a great, uh, you know, with so many real estate investors listening to this, it’s a great story. So it was, um, I guess someone was attempting to make marijuana oil and they think it was butane gas that caused the explosion. It’s nice. The whole walls knocked her to the house and stuff like this. So that’s good. That was the lower tenant. So the upper tenant is a, with someone that that was worried they had to find a place to live for her and her pet because she had a pet pig that she just knows her quote. She just wanted to make sure that he is safe and won’t be eaten because he, his family. So that’s, she’s worried about her pet pig because of this explosion. And I’m just like, so you, so you’d say, I like Bacon. Is that like offsite? So this isn’t really this investor, this investor that you know, had a PR, has a property where the guy blew up the basement and the tenant upstairs has a pet pig. That’s, that’s great. That’s a great story for her.
Didn’t tell me about the pepe part. All I know is that,
all right. Holy smokes. Yeah. Crazy stories. So if anyone’s looking for a tenant with a pet pig, if you look up the article, her name’s right there. You can Google her and say, Hey, I got, I got a place that you and your pink can stay at. Um, I just can’t stop thinking about Bacon right now. Um, but it was going to ask you about is something Nick and I didn’t know once you get into business, is that in Canada we have a pretty good test tax structure for small business. So I’m not talking to real estate now cause I know there’s all ins and outs. I just mean a straight up active business. We have a really lucrative small business tax rate that I didn’t understand. So please correct me if I’m wrong, but um, you can be running a multimillion dollar business and the first $500,000 of net income, so let’s say gross, you make $1 million, the first $500,000 of net income in this country. So if, if after your million dollar businesses run for that year, you have $100,000 net leftover, you’re only going to be taxed on that $100,000 at the small business tax rate, which I believe currently it went down. If it’s 12 and a half now, right? It was 15 and a half for then 15 they’ll for 12 and a half. Yeah, it’s 12 a half percent. Yeah.
That’s amazing. Yes, up to the first $500,000 then after 500,000 your tax at the standard corporate tax rate here in Canada yet, but the first 500,000 so let’s say you make net $600,000. That’s a lot. That’s a big business. If you’re netting $600,000 you’re a multimillion dollar business. Now, that means the first $500,000, you’re only texted 12 and a half percent. Then the hunt $100,000. After that, you’re taxed at the standard corporate tax rate. Am I explaining properly?
Mosley. Okay. Okay. So there is a qualification to that. That’s complication even before it, it has changed. It always happen. If you have a big, um, you bore a lot of money. Um, there is something called taxable capital calculation. If you have, um, uh, taxable capital, like all these loans and your injection to the company is over $10 million, then um, that small business deduction, the $500,000,
well, it goes away. Goals when you talk like that, I think you for sure got 96% in Waterloo, by the way, when you talk about all these kinds of exemptions, no, but no, no, no, no. It’s really good. Yeah,
but I just want to qualify it and there is a second qualification after the will change is that if you earn more than $50,000 passive income, then that would make a difference too.
If you make more than $50,000 in passive, what are they? What do they qualify as passive income? Like just investments, like dividends and rental. Rental property. Yeah. Yep. So if you’re making more than $50,000 gross or net,
uh, net net, yeah, but not a but before capital cost allowance. So it will just be lowering your $500,000. But if you don’t make $500,000 to begin with, then it really doesn’t.
Okay. And your first exemption kind of makes sense if you’re getting that much injection of capital, you’re might be a small business, but you’re not being funded by small business. Like no one’s putting corporation, they call it slash corporation because no one’s putting $10 million to fund a smell, a new small business. Like that’s generally another big business that’s spinning off another business, I would think. Um, but uh, in general, I think that’s a huge thing for Canadians in this country to start businesses. I really, Nick and I just went in blind. We didn’t even know that. Like we didn’t know. We were so concerned about just having enough money to like make it to next month. It was probably two or three years before we even had any net income to worry about. And maybe even then it was like $1,000 or something leftover. No, really to, and then it was like, oh, okay, the tax rates this. And once we discovered that I 15% I was happy. Now it’s 12 and a half percent. I really think that creates a good entrepreneurial environment here in this country.
Yeah. When, um, small business ray was introduced many, many years ago, it was 25% and I’ll lay, it has been coming down, down, down to 12 and a half percent. And so that’s why there’s still a lot of reason why people would invest in a corporation. You bill all your asset because you only get taxed at 12 and a half percent.
So do you have any clients that you’re working with or do they have the goal? I guess I’m just asking. I already know what I’m leading you to the answer here, but I guess, um, they don’t own anything personally or very little. Like just their corporate structure is owning their life.
Yes, absolutely. I really liked that. Like to me that’s a great thing. Yeah. Like, um,
I don’t, trying to think of the negative of that. And what I mean by that is that you might have multiple corporations, maybe a holding company as well and that you are basically as a person or as an individual, you don’t own very much.
Well, late there. I just recently did a presentation on family trust. Um, in the presentation I identify the rest. Like many people own shares of the corporation, but they still only personally, right. So then that means if you ever get sued personally, you still Yo, you share then the courageous 100%. Yeah. Got It. But the cost to get to the next level of production, which means that it’s all owned by a family trust is really expensive too. Right? It’s not for everyone. But just to clarify, to raise late, you need to understand like every day we, we live with all the risks, all kinds of risks. I’m just,
Oh yeah, we’re just talking. Worst case scenario is here, but, um, the family trust, what does that look like? Like what is the structure of the family trust? I don’t think I even still understand. I, and we have some shit, but I don’t even know if I fully understand it
right now. Typically, family trusts in the past is used as a vehicle to split income with, uh, your lower income.
Got It. Is it a corporate setup? Like what constitutes a family trust?
I trust is a legal ownership, sorry, legal relationship between trustees and the beneficiaries. It’s not really, it’s just a relationship. And so you have this trust legal document saying that you have a trust and you follow the tax return for the trust and it can own the shares off your corporation, which I’m guessing that’s your case. And when your corporation, district bill, um, dividend the trustee, who’s the, the one in charge of the acid, a say, well, I wanted this rebuild to your son, I want hit this rebuild to your daughter. I wanted this rebill it to your mom and within.trust or regional set up documents obviously as whoever that set it up as beneficiary. So we set it up and then, um, all these people can get their dividends and they can use their low marginal tax rate and not pay any tax on it if you structure it properly. Uh, but right now those are going away because I’ve done new tax rule change. And the only reason why you would have to family trust in today’s wall is essentially, um, two reasons. One is your worry about the risk. Um, and then the second reason is if you’re building a business that you could potentially sell, um, there is, uh, there is a way to sell your small business qualified small business to a third party. If you sell it, buy shares, you can qualify for lifetime capital gains exemption for about $800. $850,000
yeah, you can definitely got 96 at Waterloo Cherry. Sorry. Listen. Ah. Do you tell when people talk to you, I, a lot of people just want to get corporations right away, like there are like Carrie, I want to use the corporations for my real estate. Is this, when you said you had seven questions, you ask people like you kind of slow people down and say, okay, let’s look at the big picture here. Yeah. I think that’s the most important thing. If you’re listening to this, what Nick and I did, which I think was a mistake, is we took like we
paid three or $4,000 to go to some wealth bootcamp or something like that. What was, I forget what it took something else you, you. I went to go and I, you met 2,500 bucks to go. You Go, you bought some additional courses, anything. I went to a different lawyer and they basically just said, hey look, at the time I think we had owned a couple of properties and they said, if you’re a real estate investor, you definitely should own corporations. And we went out and incorporated three corporations and kind of like a holding company and like a middle company use them for, you didn’t use them, but we paid like corporate tax, corporate tax returns and then we got so cheap that I said, I’m not going to pay an accountant, sorry Jerry to do $0 corporate tax returns because there were like 750 bucks just at zero.
So I printed off the forms from the government of Canada’s website and I just wrote Zeros all over them and I just submitted them myself and then they would send me something in the mail saying, Oh, you messed this up. Like you have to tell us this. And I would just go back and forth with the government because I didn’t want to do these corporate tax returns, but longterm owning the property, we’re very grateful. Yeah. The, the way the corporate structure works, I think everybody should sit down with an accountant and go through this stuff because the benefits are just so huge. You obviously agree. Yeah, yeah, yeah, yeah. It’s when you put the cart before the horse, right? So like when you’re like you don’t have any properties, you have a sort of interesting it. You’re like, oh my God, this is amazing. I’m going to own a corporations.
You go set up all these corporations and you don’t use them, then you’re stuck with these damn things. You got to file tax returns and then, or you going to closing down and closing them down to a process. So you’ve got to pay to close them and you have bank fees that you, every business bank fee. I had them for years before you even have bank accounts. So I didn’t even worry about that. But you know, and we, one of our, one of our accountants early on was dealt with a number of investors that, and he kind of disclose to us like, yeah, he goes, look, these p I do this, this course, I teach people about this stuff. They all consent up corporations, they’re all really happy about it. Then they don’t use them and then they’re all pissed off cause services because they haven’t used them.
And I’m like, yeah, to close them it’s work. So we’ve got to charge you to close them. And they’re like, well why am I doing all this? He’s like, I dunno, you decided to do it. Right. So, so yeah, I think that’s the thing. So if you’re gonna use it generally makes sense. Totally. But, and, and all the things that are going on in the Canadian government with the tax system, both provincially and federally, I just tell everyone, look, it’s probably in your best interest if you think you’re going to be buying more than two or three properties to sit down with an accountant and get off the quick tag. You know, like those other self-service tax things because the advice that you’re going to get is, is really beneficial. And sometimes you don’t recognize it for three or four years. But the way our accounts set us up, and I’m sure it’s just the way you would cherry, it’s been so benefit looking back now, we’re so grateful than an accountant sat us down and said, guys, here’s what you’re doing and this is why you’re doing it.
And we stuck with the plan, not even for tax, just for liability, like just to protect your other assets. Right. And, and I mean, you know, it’s like, you know, we joke like you haven’t really been in business long enough if you haven’t been served with the lawsuit. Yeah. Like you’ve got to get at least one lawsuit and then, you know, you’re like, you know, in a real business. And, um, and so I was involved in a business with my friend when he was getting sued and everyone in the business kind of got circled in. So I got served with the lawsuit to, um, and I drove my dad’s car one day and they took the law, that license plate down, they put his name on the loss. They literally put like 50 people in the lawsuit. They, but they wanted him. Right. And that’s just not our father on a loss.
Just the way he did it shows in his face when he got the papers. He was impressive. Um, but uh, but yeah, but that’s when it hit home to me. So I was on this lawsuit. I had already had properties at this time. I was in my early twenties I had properties and I was like, holy crap, man, I’ve worked so hard for these properties to get those first few properties for me. Like you, you’re like, you’re scraping up the money. You don’t have the funds. It takes everything to get going. And I’m like, man, now I can lose all this, all this work. I’m like, this sucks. And that’s why I got kind of serious. What the asset protection side of things. Like it’s, it’s important, just the liability aspect of it. For sure. I’m Jerry, I want to switch gears a little bit as a, and just ask you, you go to this gym that we go to and sometimes I’m amazed cause there’s like, you know, middle of the day and they’ll be like six of us there all kind of guys grunting Ah, look how strong we are. But really we’re not that strong and stuff. And you’re there doing your thing with us, which is amazing. Why do you go to the jams comic relief? I think for her. Yeah. No, no seriously. Because there’s, I’m curious why two it’s a pretty, it’s a pretty hardcore kind of gym with weights flying all over the place and stuff. Why do you go?
Um, uh, I don’t know, but know. So I try uh, drinking in my early twenties. I don’t know where this is headed. You got drunk,
basically got drunk in your 20s. Yes.
So I didn’t exercise much, like not consistently. Like there would be stretch of my life that I would go hard at it. And then I stopped like for a few years and then I go, ah, I got an attic, get again. I think the biggest motivation is that, um, uh, when you are an entrepreneur, you get really stressed out and that is the place to kind of just calm your mind down. Uh, you, you’re just sweating, not focusing on anything else and you’re just trying to get through the workout on its own or you’re just trying to sweat this billions of times and still the cocks not stopping. But like for me it’s really, um, it’s a game changer too light thanks to you guys to introduce us to this whole world of CrossFit because I could not have thought that I would be able to do so much. So much of these movements. I’ll lifting weights. I wasn’t lifting. I’m still not lifting a lot of ways, but I’m so like I’m trying, oh, every day, every time we go there. Um, but it’s a huge confidence boost.
I find that too. Just the ability to move your body and yet in certain ways just gives you confidence in other areas of life. It’s weird. Yeah. Yeah. Um, okay. And then, uh, w we talked about the vacation. One thing I wanted to mention is that, look, you, you weren’t born in this country, you’re kids are born in this country. One thing reflecting back on our parents is I realize that when they came to this country, they didn’t have a big network of people to help them out and you not being born here, you obviously have a network. So wait, something I wanted to ask you is do you ever call Cra and talk to anyone at Cra? Yeah. Do
they also speak like Mandarin or Cantonese? No, cause I was, I was wondering if Carrie ever calls the Canadian CRA and then someone over there and you guys were like talking mandarin or Cantonese back into there, but Canadian taxes cause I just felt like that would be amino one. Look, it’s not going to be long before strs taking payment with Ali pay or whatever, you know? Yeah, yeah. But I just thought that would be awesome to Canadians speaking mandarin and Cantonese about Canadian taxes in Canada.
So, um, uh, I cannot carry on a business conversation about hikes and accounting in Cantonese. You got it. Okay. Yeah. Got It. So that Canadian, no, because I always learn it in English, so I don’t know what that billing credit and Chinese, yeah. Got It. But um, but there are some Chinese auditor’s am the thing is there are a lot of tech centers that are really located in not in Toronto and they’re not as
of course. Yeah, yeah, of course. Okay. But what it was going to say, it’s just that the network that you are growing here for yourself, the, the uh, your kids are going to benefit that from that. Whether you know that are not like the people that our parents were able to meet and kind of grow their network was a little bit, now Nick and I being born here in educated here, we’re growing our network of that much larger again. And that’s really powerful for our children because if our children want to get a job in saw the software, like I still have tons of contacts in the software industry if they want to go to a different industry, Nick and I have likely worked in five or six different industries and know people in those industries. And that’s something we can pass on to our children.
And I didn’t realize the benefit of that, but that’s actually a really huge benefit. Um, and you’re developing your network here and your kids are gonna benefit from that. So it’s, it’s a really big thing that you’re in, whether they use it or not, it’s, it’s a big deal. Yeah. You know, because when you go to some other countries like Hong Kong or when we go back to Croatia, everyone knows each other. And if you don’t know who’s who and who’s doing what, it’s hard to kind of get ahead. Yeah. Right. In Canada, we are very fair, like there’s lots of problems in this country, but it’s a very fair country overall. So if you have a good network, you can kind of move through it and get what you want out of this country as well. As long as you’re willing to put the work in. And, uh, I just see you developing your network and I’m just, it’s awesome. So, you know, it’s fun to see you grow your, but it’s fun to see. We’ve watched you from the beginning, you know, quit your job, go into this kind of wild world of real estate and starting your own accounting firm. Yeah. Um, we’re just big fans. You know, you’re, you’re a, you’re a great example on many levels, on a whole bunch of different stuff.
Well, we, uh, I just, I just liked to implement what I learn, so I learned a lot from both you and Nick and it’s awesome to take some of your, like all these advisors, uh, and implement it and awesome to be able to walk up to you and asks you, hey, how do I approach this sales conversation? And the answer we give you might not be right, by the way. No, no. You told me a long time to digest, to answer and I’m still trying to implement it. Like it sounds so simple. I overtime I finally get it, but yeah, like it’s so sad that in our, uh, in our school system, we never got taught how to do sales and marketing and it’s,
yeah. Yeah. Um, okay. So Cherry, I you have a book, you’re about to have a second book, a website. How do people find you? What’s the best way?
Uh, the best way is through my website. It’s at, I need to say it really clearly real as the tax tips.ca
real estate tax tips.ca. Yeah, so we’ll, if you’re listening to this, we will link to it in our little show notes at rockstarinnercircle.com Forward slash podcast. You’ll find the link to this episode. On that link we will have the URL realestatetaxtips.ca. Yeah, and you, your book is available through that link somewhere.
Well, yes, yes. And then my second vote will come out later this year.
Whoa. Really? You’re, you’re committing. Awesome. That’s it. That’s Jerry, thank you so much for doing this. Really, really appreciate it.
Thank you for having me. Thanks.
Hey everyone, it’s Tom Karadza again, so hopefully enjoy that episode of the your life. You’re a term show with Cherry Chan and remember, thank you for all your feedback that has been coming in around the podcast. We totally appreciate it. I have a new email address, I’m about to release for the email that you can reach out to us with from listening to this podcast and if you are listening to this and think we have earned or deserve or rating on iTunes, we would please ask that you do it. We’re using that as the fuel and the feedback to drive this podcast. So thank you. You can do a rating if you feel like you want to give a review of the podcast, you can do it on there as well. It really means a lot to us, so thank you for everyone who has done that and if you haven’t yet and you think we’ve earned it, that would be fantastic if you go off and do that, but I guess you really don’t need to either. We’ll leave that up to you. I think that’s it for this episode. Listen. If you’re looking for YouTube videos on real estate investing reports, articles, blog posts, free copies of our book, you can get all of that rock star inner circle.com so if you haven’t visited that yet, you can check all of that out at rockstarinnercircle.com that’s it for this time. Until next time, your life, your terms.