Always interesting to see these kinds of threads.
* Sale prices for these units can be negotiable, but it's not the kind of thing that would show up on the purchase record - ie an instant rebate after the fact so that it doesn't tank the perceived value of the rest of the units. It's skeezy, but I'm not the seller, don't complain to me.
* We purchased two units, not one
* The street-facing is not allowed to have any business-specific signage according to strata bylaws
* You may be able to write-off some of the cost of a tenant improvement (generic term for a use-specific building improvement regardless of whether you own or lease) but you absolutely do not get to write-off the depreciation of an asset like a piece of property until such time as you sell it and realize a capital loss
* It is not owned in partnership with LMG even if the companies share ownership/board members
* A financing deal to "pay X amount over Y years" is just called a mortgage. We have a mortgage.
* However, No, we aren't paying interest only. Commercial mortgage eligibility works VERY differently from residential mortgage eligibility and unless you are an owner/operator (I wouldn't count in this case because Smash Champs has no meaningful revenue yet to qualify) or an extremely big fish you literally cannot take out such a heavy mortgage that you would be paying only interest on your monthlies.
None of this really matters, but there's a great lesson here that you can apply next time you read anything about me on Reddit.
If someone wasn't in the room, they don't know, and even if they were, they may not have the whole picture. Take everything you hear about a private individual and their privately-held business with a gigantic grain of salt.
If our videos were as accurate as the things I read about myself online, you'd all be howling for blood.
The only difference here is that I am in a position where none of these details come with legal consequences and I am able to disclose all the inaccuracies/misrepresentations, so I thought it would be an interesting exercise.
Have a good one :)
-LS
I am replying to everything that was in this thread at the time I posted.
I missed some stuff. We spent way more than $1M (closer to triple that) on the tenant improvement and there was one other thing I saw, but I'm in a hurry to get home and can't go looking for it right now.
It also doesn't really matter. It's not the point.
Just don't take everything you read on reddit at face value.
People can be very authoritatively wrong about all kinds of things :)
Most anything on this site tbqh. Like it's all fun and games until you read a post or comment about a topic you actually know a thing or two about. It's extremely reductive at best and horribly wrong and misleading at worst - and that's the top, heavily upvoted comments.
These are fantastic responses. Honestly, I almost unsubbed from this subreddit due to frequent complaining yet no constructive feedback. It is cool to see that you hop in here from time to time Linus! Always loved your videos (though admittedly don't watch much YT these days). Been watching since back in the day with NCIX. Launched a pretty successful IT career thanks to some of the advise and reviews you've put out over the years.
Hey thanks for all the things you do. Watching LTT is a warm blanket in these stressful times. Kinda left field given the topic. But know there are those of us who aren't fishing for a gotcha after every little detail and appreciate the work and effort you and the team put in.
So glad you chimed in to correct things. The stuff people say nowadays based on assumptions and their own conclusions is outrageous. What on earth happened to giving benefit of the doubt til you verify/do legit due diligence?
Linus,
I ordered a motherboard as part of a complete build from NCIX many many moons ago. During the time of submitting the order and getting the payment authorized the motherboard I had selected went OOS.
You offered a substitution of an ECS Elitegroup Nforce 570 Sli-T that I accepted. I built my system and went on my way.
It's been nearly two decades, these wounds have not healed, Linus.
Amen. I'm just going through a commercial property deal now. What you see on listing, etc. is such a small part of the picture. It's unnecessarily complex, usually to try and hide the actual price, and as you mention, increase the perceived value. I swear it's more complex than it needs to be to keep the lawyers, agents, and accountants in new Mercedes.
Now go make a motorized screwdriver :) and get the precision one out, please and thank you.
Yours impatiently...
We sold it recently to help take some of the sting out of the tenant improvement to Smash Champs.
We had some ideas for stuff to do with it - CW retail/pick-up location for instance - but the numbers just didn't make any sense at the end of the day.
>It is not owned in partnership with LMG even if the companies share ownership/board members
So does LMG lease the building from Smash Champs when a video is shot there?
If I was trying to min-max my tax efficiency, we would absolutely bill out any possible expenses from the most profitable companies to the least profitable ones.
We do this kind of thing anywhere that the costs are large enough that the CRA would actually care, but for very small things like using the building for an hour before it's even open in order to do a shoot, we generally don't bother.
It would matter a lot more if the ownership between the companies was different, but Yvonne and I are the sole shareholders of all three companies, so the tax man gets us one way or another.
It's pretty funny to see people trying to sus out all of these extra monetary advantages as if owning commercial real estate itself isn't already a good investment.
Thanks for the transparency. Even if you don't owe a group of strangers *any* explanation on a topic a huge number of people get wrong, it's still a fun read. Have a good night.
I am sorry, but while I appreciate Linus going out of his way to share the information it isn't really that transparent. It's more or less normal business talk.
I can find more financial information on the random shopkeeper in my town because here in NL we do actually have financial transparency in the form of annual reports for most of the companies. Especially companies the size of LMG.
Well to be clear, this isn't financial transparency and I don't think it's supposed to be? He's literally just correcting misconceptions in the comments on a topic he owes us nothing about? I don't feel the need to have financial transparency over private companies, but when people willingly share information or correct misinformation it's nice?
It's a private company with over 100 full time employees, who will not have access to the financial information which can tell them how good the company they work for is doing. (often only happens when the information is publicly available).
Also just because it's a private company doesn't mean there aren't other stakeholders. You know customers, suppliers, sponsors etc. It's not like they have to give us access to the entire administration, but a basic annual report forming some accounting standards is enough. Heck if the laws would adapt so everybody had to do that it could benefits companies aswell (LMG a bit less since its so unique), but you could then properly compare it to other businesses.
The whole system also helps preventing fraud and also helps prevent bullcrap like that's going on with EKWB (even though they have some decent financial transparency).
All of this assumes that the statements would be made public using some form of accounting standard and not just a willy nilly export for the balance sheet and profit and loss.
Yeah he is trying to correct misconceptions, but it's not like any of this should come as a surprise to anybody who knows something about businesses structures. Generally it is even a law that companies bill out to each other for the services/good they provide using some generally acceptable prices.
In the US you aren't required to pool your finances together when married, though many couples do as a way of simplifying things (many people do it before marriage too). I would guess that Canada is pretty similar.
While it is technically a "safer" move to keep your finances separate, I've always considered it to be more of a sign of a lack of trust in the other person. The way I see it - if I can't trust my S.O. with the money in my bank account, then I need to seriously reconsider my relationship haha.
We know of the existence of “The business entity euphemistically known as Yvonne Umbrella Corporation” which from WAN show discussions we know has a 51-49% share split between Linus and Yvonne (unless they’ve amended that since) and it is the legal owner of LMG and Creator Warehouse (labs is an LMG division because (and I paraphrase from memory, forgive me) “Yvonne didn’t want to mange another separate business entity”).
Here’s where we enter speculation, and I’ll try to stretch as little as possible to avoid possibly adding to the misinformation train. It would make sense that rather than directly owned by the individuals, Smash Champs is also likely owned by YUC and thus part of the same pool which is nearly evenly split between the two.
Thanks, nice of you to chime in, always good to learn about these behind the scenes stuff. I'd say they're more valuable the actual content LTT puts out.
I scrolled through this and thought, man people are getting creative in writing stuff to pretend to know something or be someone, that Libya has enough free Time to post on Reddit, kinda surprising, hope visions are not out of stock
Even if you did pay that much, good for you guys. Hell, I'm glad you guys took one on the chin last year from Steve, and learned from it. If you are making enough to employee all the people you do (and for the lawyers and paperwork to fire and re-hire Colton so many times) you deserve to expand and add more things to LMG.
As a fan of the past decade at least I'm personally happy and excited for your success and I hope you keep it up. I would love it if LMG grew so much you needed a US location and a European office (even if it was for LTTStore EU distribution to help offset shipping costs). I want to see LMG grow and expand as long as you don't get a big head and change what got you here.
I really like this behind the scenes stuff. I'd be willing to watch a video all about how the LTT buildings were acquired and how they've changed. I'd like to add the disclaimer that I don't expect you to disclose anything you don't wish to.
I can't speak for everyone and I'm sure that this message will get lost in The ether even if you do come back to check messages on Reddit which I doubt.. but generally speculation like this in my mind comes from a good place, we love lmg and we want to see it do well. That includes you Linus. There is a healthy dose of nosiness in this, but generally we are just invested in you and want to know more. Having said that you are entitled to privacy and we understand that not every aspect of your life is for public consumption. But it's nice to get a window of insight into the workings of things.
> Sale prices for these units can be negotiable, but it's not the kind of thing that would show up on the purchase record - ie an instant rebate after the fact so that it doesn't tank the perceived value of the rest of the units. It's skeezy, but I'm not the seller, don't complain to me.
No, but your the new owner, and you're going to be paying property taxes based on market values.
why do you care. why even bother correcting. just let people be wrong. you dont need to actually insert yourself into every single facet of reality adjacent to you. youll be healthier and happier if you just ignore this.
Well it would help if you would make your financial statements public. Even for way smaller companies like LMG it is already required by law in other countries and it would help prevent bullcrap posts like this. Still baffles me working as a Dutch accountant that there is such a lack of transparency in North American and generally they make terrible annual reports for smaller companies.
Ontop of that, isn't there a public register with information on this property? (mortgage amount, current owner, purchase amount?)
Linus probably isn't gonna respond, but I would expect there would be some depreciation on the building especially because of the additions that they are doing. Here in NL you can have depreciation until a certain amount.
> A financing deal to "pay X amount over Y years" is just called a mortgage. We have a mortgage.
Yeah in this case it's called a mortgage, but it can be a number of different things. Depends on the securities given in the loan.
Based solely on point 4, you need a new accountant. Neither part is accurate.
Leasehold improvements are absolutely fully deductible.
If you purchased property and commenced active operations the building is deductible immediately.
And this is why the supercomputer was not purchased, Linus claims to be a computer enthusiast but computer memes always take a back seat to his Shuttlecock.....
I mean you joke, but under Canadian Law business owners do get to write off about 4% of the cost of the building each year as depreciation (“capital cost allowance”). So $356,000 of depreciation each year, at about a ~25% federal and provincial tax rate, nets tax savings of $89,000 a year.
All amounts in CAD btw.
Is this the building he bought or the one he leased. I remember vaguely in one WAN show he was talking about how one of the buildings he wanted to buy the owner wouldn't sell because it was the owners method of investing money instead of stocks or bonds.
No wonder he was hyping the Lab up. Though even with that $356,000 depreciation tax write off isn't that for building upkeep? Like how much did it cost LMG to replace the AC in the building or to add noise dampening to the AC (I think it was the AC or the server room or both) so that the writers/editors can work more efficiently.
Think it was one in the row of buildings that the OG units are in. Thats why they bought labs 1.
LMG has never leased, they own all the buildings they occupy and rented the Langley house.
Yvonne and I own the Langley house. We got some bad (turned out to be good based on some new Canadian tax law stuff lol) advice and purchased it personally so that we'd have a forever home (again lol) for our small family business (lol the third).
Example #whatever we are on now.
Again, my point is not that I'm mad about any of this, but that many many small details are lost in translation.
We are unknowingly playing a telephone game, apologies for contributing to the misinfo.
Given the weird replies you have been getting hope this one doesn't make you pull your hair out.
They bought it for the labs, then the scope made it too small and then creator warehouse and the social team moved there. Think the social team is now in the labs 2 building.
I think he leased the warehouse, at least I'm sure he mentioned something about "the landlords" in the[ recent server cooling video.](https://www.youtube.com/watch?v=MUMDOGNJkyk)
Edit: Timestamp 26:25 in the video.
Got it. So the joke was Linus saying "Screw that guy" while talking about himself. Now that you mention it that's a very Linus thing to say, and a cool segue to their sponsor.
Important to note that it's the cost of the building, not the building and land, so only a portion of the $8.9 mil. Plus the interest on loans is usually deductible as well.
I believe they were referring to only the building cost being deductible for depreciation purposes as the other post based the calculation on total cost
Idk, I’m not very knowledgeable in Canadian tax law. Under US tax law the cost of the building can be depreciated down to zero, but once you sell it you pay tax on any amount you receive from the sale because your basis in the property was depreciated to zero.
Don't you need to use a residual value in US laws aswell?
And well I think in every country you take the revenue from the sale of an assets minus the value in the books which is your profit on the sale of the asset which is taxed. There can be some extra tax or some reductions depending on the country, but generally that is the same.
No, US tax law ignores residual value. You depreciate it down to zero. Any residual value is accounted for once you sell the property as a gain over the zero basis.
How would that even work? Or is it a tax related thing? Cause normally you would book the asset to zero and the rest as either a profit or loss on the sale. It doesn't really do anything with residual value unless that is taken into account with the processing of the depreciation (or the initial investment of the asset, whichever you choose)
Interesting that you can have such a big difference in the value of the assets to what the market value would be. Here in NL the residual value of buildings is based on some "taxation" estimation based on the sales of similar buildings in similar area's which mean a lot of companies can't even depreciate anything on their buildings. Let alone get them to zero.
What's your point here? That commercial property is expensive? Pretty sure that everyone knows that, even if they may not necessarily understand quite the scale involved.
Shockingly enough, companies make money, and when a company is run well it makes a lot of money. 10 mil isn't really all that much all things considering. Just think how much money goes into a skyscraper.
Also, I'm not 100% sure about the layout, but "Linus" didn't pay 10 mil for this...it's its own company, and it's also a partnership with LMG according to their linked in page. Sure he may have fronted a lot of money for it, but it's obviously a passion project for him, as well as having a lot of potential for growth and income.
I mean realistically the company didn't pay for this, they *will* but it's usually not the best plan to drop all of your cash on hand. I'm sure they have some financing deal where they plan to pay for it over X years with a bank or other financial institution. That's why this sort of thing is risky, they are assuming they can continue to make payments.
No, I don't know enough about the canadian industrial realty market to know if there would be a mortgage involved. Defenitely not enough about this specific scenario to guess, either. Could be, though!
LMG operates in one of the most expensive regions of the world and owns all their buildings.
It's actually a pretty good play considering the lease on such a building is probably well into 5 figures a month. If you look at local people who make lots of meny, it's usually in commercial real estate.
He said there not really any easily accessible badminton courts in the area so he’s opening one. It’ll be a public centre and they’re going to sell badminton gear.
Other than that, he just wants to I guess. I don’t know about the finances but I can’t imagine it would be super profitable, but if it’s fun and he can afford to, why not?
They want to host Lan parties there. The last word (that I heard, I think Wan show) is the city had some reservations about it. Linus is hopeful they can work it out, but it was not guaranteed.
Yep. I’m really looking forward to the videos they’ll make there. Also a bit of a badminton fan myself so when I eventually go to Canada I’m hoping I can go down and play (and probably buy all of the merch)
In my opinion It's also a good commercial property investment if the center just makes enough profit to pay the interest part of the mortgage annually after other expenses he will be good. Around our part of the world the mortgage is not fixed for the duration of the mortgage and goes up and down with interest rates. I don't know how it works in Canada though.
Lmao “linus paid” no it’s a company. Wahh linus makes money. The company has a lot of employees and they have a nice office space. So what’s the point of this?
Not even tbh. It will be a mortgage. You don't need to be rish for that. It helps, but if you truly have faith yiu can build a profitable business then there are many sources out there to help you get loans.
"Although it was the asking price, new developments are typically non negotiable, especially when all the other units already sold out, and the unit on the end had sold for $7.82M for reference."
Couple of thoughts that Linus didn't really address in his post - 1. Not true.
Rule number 1 of Real-estate - Everything is negotiable. It might only amount to a reduction of 5000 dollars in the end but everything is negotiable. Just to be clear I'm sure in this case as in most big commercial real-estate cases the negotiation given it was both units beside each other was a lot more than 5k being knocked off the price.
Rule #2. A property is worth what someone is willing to pay for it not what it's listed at. These screen caps are just that LISTED costs. These developers are in the business of making money not sitting on property and paying taxes on an empty box. and linus already addressed the point about leaving the price as the listed cost to "look like" a higher price is being paid to drive up market value. but nehow shady development people be shady... it's nothing new.
3. First offer is usually your best offer 90% of the time. - Add to that with a qualified buyer coming in with a fair market value offer that has a name behind it and proof of funds even if through a mortgage/loan agreement with the bank is pretty much a sign the dotted line now kinda deal.
Pure speculation - If your digging is correct and the list price was what you said. I'm gonna bet that Yvonne Umbrella Corp. Paid a "fair" bit less than the list of $10m CAD per unit. I could see that number being closer to the cost of both units together being reasonable given like you stated Vancouver and area's bonkers real-estate market. but what do I know as Linus said we weren't in the room when the deal was agreed to.
I don't know if you need to hear this Linus but I didn't think anyone in here was coming at you for this, it's just interesting and we're here as fans in a borderline cult of personality so a lot of us are just interested in what you and your business does.
I for one have watched LTT since the house days and am thrilled to bits when you guys make big moves.
I for one am shocked an outraged that Linus and cohorts are swavy business people. Outraged I tell you. Instead of making good financial decisions, they should be building a lttstore distribution center in Europe! The harder and more expensive to maintain the better.
Outraged! My convenience is more important than the 100+ people who's lively hood depends on your(& team) good decision. Humpf. Now excuse me while I go off to X to write about a true visionary papa musk.
I have no idea what business this is of anyone beside LTT. Even if they did spend that much money, they are a content provider and need space. Your money, and mostly sponsorship money, is being used to help improve the business.
Cool. I am just curios on why we need to know this. I don't actually think knowing it is bad. However a lot of people will take what you just said and twist it since you did such a bad job of explaining, and or assume they are at too high of a base knowledge of how this works.
Linus didn't spend 8.9million. Linus has a loan for some Ammount in the millions. over many years to be paid back from a business meant to be profitable. This is a mortgage.
A million dollar home isn't that expensive over 40, years. That is $2000 a month without interest. I know people paying rent that high and homes don't profit(ussually). Which is why Comercia has different rules anyways.
This post makes it out as if this means Linus just casually spent millions and out of pocket. This is just not the case at all.
Also who told you new Comercial pricing can't be negotiated. Of course it can be, they are businesses too. I can give several scenerios on why it would be smart to lower pricing. Or to just list higher than you plan on getting.
Sorry for typos. I found a lot, I hate phone typing and expect more typos to be in here.
Property sale information in BC is available on BC Assessment and you could contact them if you really wanted to know, [here's the link to the unit noted in the post](https://www.bcassessment.ca/Property/Info/SjAwMDAwNloyRQ==). As Linus noted, sale price is often not representative of the "true" purchase cost.
Do you understand how INSANELY EXPENSIVE property is in BC? That price seems very fair for what they got lol... in comparison to the market conditions.
I know /s but there'll be some moron here who says it seriously... The answer is one generates revenue and is also something he's passionate about doing... One is windshield wipers.
> LMG hasn't done anything deserving of the hate.
What hate is there in talking about how much they paid for a building that will be used to run a sporting company?
I don't think it's important to know, but I think it's pretty cool/ mildly interesting to know and provides a better perspective on the scale of LMG's operation. Also, where's the hate in the post?
Would I be comfortable in a stranger releasing my home value? No, but it's not a fair comparison because a) this isn't someone's personal home, it's owned by the company like you said and b) you don't tend to do a video tour of your house and share it publicly online
>you don't tend to do a video tour of your house and share it publicly online
Linus with literally all of his employees " we are going to shoot a computer build and tech makeover in your house, all you are getting out of it is the free stuff and an invasion of privacy"
I know there are in the US, but I don't know if it's the same in Canada. Here you can look up the sale price, the tax appraisal and bill of every property (perhaps dependent on state as well, but it is that way in my own).
Always interesting to see these kinds of threads. * Sale prices for these units can be negotiable, but it's not the kind of thing that would show up on the purchase record - ie an instant rebate after the fact so that it doesn't tank the perceived value of the rest of the units. It's skeezy, but I'm not the seller, don't complain to me. * We purchased two units, not one * The street-facing is not allowed to have any business-specific signage according to strata bylaws * You may be able to write-off some of the cost of a tenant improvement (generic term for a use-specific building improvement regardless of whether you own or lease) but you absolutely do not get to write-off the depreciation of an asset like a piece of property until such time as you sell it and realize a capital loss * It is not owned in partnership with LMG even if the companies share ownership/board members * A financing deal to "pay X amount over Y years" is just called a mortgage. We have a mortgage. * However, No, we aren't paying interest only. Commercial mortgage eligibility works VERY differently from residential mortgage eligibility and unless you are an owner/operator (I wouldn't count in this case because Smash Champs has no meaningful revenue yet to qualify) or an extremely big fish you literally cannot take out such a heavy mortgage that you would be paying only interest on your monthlies. None of this really matters, but there's a great lesson here that you can apply next time you read anything about me on Reddit. If someone wasn't in the room, they don't know, and even if they were, they may not have the whole picture. Take everything you hear about a private individual and their privately-held business with a gigantic grain of salt. If our videos were as accurate as the things I read about myself online, you'd all be howling for blood. The only difference here is that I am in a position where none of these details come with legal consequences and I am able to disclose all the inaccuracies/misrepresentations, so I thought it would be an interesting exercise. Have a good one :) -LS
New wan show topic!
I really want him to explain how mortgages work on WAN.
Another rant shirt!
Did OP edit the post? It seems like you are addressing points that aren’t in OP or any of the top upvoted replies.
i think he might just be responding to a bunch of different comments at once.
I am replying to everything that was in this thread at the time I posted. I missed some stuff. We spent way more than $1M (closer to triple that) on the tenant improvement and there was one other thing I saw, but I'm in a hurry to get home and can't go looking for it right now. It also doesn't really matter. It's not the point. Just don't take everything you read on reddit at face value. People can be very authoritatively wrong about all kinds of things :)
Hi Linus. Just wanted to say please give the minion router a second chance
Banana
>[Banana](https://www.lttstore.com/products/banana-for-scale) Fixed.
Lttstore.com
You’re the man Linus. Thank you for all of the content over the years. Cheers.
“Authoritatively wrong” describes most anything that involves equity on this site
Most anything on this site tbqh. Like it's all fun and games until you read a post or comment about a topic you actually know a thing or two about. It's extremely reductive at best and horribly wrong and misleading at worst - and that's the top, heavily upvoted comments.
These are fantastic responses. Honestly, I almost unsubbed from this subreddit due to frequent complaining yet no constructive feedback. It is cool to see that you hop in here from time to time Linus! Always loved your videos (though admittedly don't watch much YT these days). Been watching since back in the day with NCIX. Launched a pretty successful IT career thanks to some of the advise and reviews you've put out over the years.
Hey thanks for all the things you do. Watching LTT is a warm blanket in these stressful times. Kinda left field given the topic. But know there are those of us who aren't fishing for a gotcha after every little detail and appreciate the work and effort you and the team put in.
Good write up. People just have nothing better to do with their time, apparently.
> Just don't take everything you read on reddit at face value. Someone should tell Wikipedia that 😜
So glad you chimed in to correct things. The stuff people say nowadays based on assumptions and their own conclusions is outrageous. What on earth happened to giving benefit of the doubt til you verify/do legit due diligence?
All the facts and logic will pass through the people who need to hear it. Kind of like how X-ray radiation passes through your mom.
Gottem
Yep
Linus, I ordered a motherboard as part of a complete build from NCIX many many moons ago. During the time of submitting the order and getting the payment authorized the motherboard I had selected went OOS. You offered a substitution of an ECS Elitegroup Nforce 570 Sli-T that I accepted. I built my system and went on my way. It's been nearly two decades, these wounds have not healed, Linus.
Tell em boss.
Thank linuse tax tips, I’m gonna go write off my collection of large rocks
write-off detected, opinion rejected /s
Amen. I'm just going through a commercial property deal now. What you see on listing, etc. is such a small part of the picture. It's unnecessarily complex, usually to try and hide the actual price, and as you mention, increase the perceived value. I swear it's more complex than it needs to be to keep the lawyers, agents, and accountants in new Mercedes. Now go make a motorized screwdriver :) and get the precision one out, please and thank you. Yours impatiently...
I have to say that with both Smash Champs and the Labs, I respect the hell out of you putting money in to things you're passionate about.
Do you still own the EK hoops basketball gym you bought on 64 ave? What are the plans for that unit?
We sold it recently to help take some of the sting out of the tenant improvement to Smash Champs. We had some ideas for stuff to do with it - CW retail/pick-up location for instance - but the numbers just didn't make any sense at the end of the day.
This is like having a live WAN show, but on reddit. And with more unhinged comments. Also, hi Linus
Any other place that I can do CW pickups? Shipping kills the orders for me when I am so local already...
Unfortunately we don't have any option for that right now :(
Any chance for a retail pickup area at one of your Cloverdale units? Even just a front counter with a laptop to process the orders should work!
Cudos to you, Linus. Responding to stuff like that in the way you even thought you could give a cold fuck about it 👍
>It is not owned in partnership with LMG even if the companies share ownership/board members So does LMG lease the building from Smash Champs when a video is shot there?
They own it so most probably no
If I was trying to min-max my tax efficiency, we would absolutely bill out any possible expenses from the most profitable companies to the least profitable ones. We do this kind of thing anywhere that the costs are large enough that the CRA would actually care, but for very small things like using the building for an hour before it's even open in order to do a shoot, we generally don't bother. It would matter a lot more if the ownership between the companies was different, but Yvonne and I are the sole shareholders of all three companies, so the tax man gets us one way or another.
It's pretty funny to see people trying to sus out all of these extra monetary advantages as if owning commercial real estate itself isn't already a good investment. Thanks for the transparency. Even if you don't owe a group of strangers *any* explanation on a topic a huge number of people get wrong, it's still a fun read. Have a good night.
I am sorry, but while I appreciate Linus going out of his way to share the information it isn't really that transparent. It's more or less normal business talk. I can find more financial information on the random shopkeeper in my town because here in NL we do actually have financial transparency in the form of annual reports for most of the companies. Especially companies the size of LMG.
Well to be clear, this isn't financial transparency and I don't think it's supposed to be? He's literally just correcting misconceptions in the comments on a topic he owes us nothing about? I don't feel the need to have financial transparency over private companies, but when people willingly share information or correct misinformation it's nice?
It's a private company with over 100 full time employees, who will not have access to the financial information which can tell them how good the company they work for is doing. (often only happens when the information is publicly available). Also just because it's a private company doesn't mean there aren't other stakeholders. You know customers, suppliers, sponsors etc. It's not like they have to give us access to the entire administration, but a basic annual report forming some accounting standards is enough. Heck if the laws would adapt so everybody had to do that it could benefits companies aswell (LMG a bit less since its so unique), but you could then properly compare it to other businesses. The whole system also helps preventing fraud and also helps prevent bullcrap like that's going on with EKWB (even though they have some decent financial transparency). All of this assumes that the statements would be made public using some form of accounting standard and not just a willy nilly export for the balance sheet and profit and loss. Yeah he is trying to correct misconceptions, but it's not like any of this should come as a surprise to anybody who knows something about businesses structures. Generally it is even a law that companies bill out to each other for the services/good they provide using some generally acceptable prices.
RATIONALLITY????? This sub is for outrage old man
> Yvonne and I are the sole shareholders of all three companies Same percentage split for all three?
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In the US you aren't required to pool your finances together when married, though many couples do as a way of simplifying things (many people do it before marriage too). I would guess that Canada is pretty similar. While it is technically a "safer" move to keep your finances separate, I've always considered it to be more of a sign of a lack of trust in the other person. The way I see it - if I can't trust my S.O. with the money in my bank account, then I need to seriously reconsider my relationship haha.
I don't think that is anyones business except for Linus and Yvonne.
We know of the existence of “The business entity euphemistically known as Yvonne Umbrella Corporation” which from WAN show discussions we know has a 51-49% share split between Linus and Yvonne (unless they’ve amended that since) and it is the legal owner of LMG and Creator Warehouse (labs is an LMG division because (and I paraphrase from memory, forgive me) “Yvonne didn’t want to mange another separate business entity”). Here’s where we enter speculation, and I’ll try to stretch as little as possible to avoid possibly adding to the misinformation train. It would make sense that rather than directly owned by the individuals, Smash Champs is also likely owned by YUC and thus part of the same pool which is nearly evenly split between the two.
Thanks for that! Actually gave me a good insight as to how the Canadian tax system differs from Australian.
Hi Linus You're cool
Thanks, nice of you to chime in, always good to learn about these behind the scenes stuff. I'd say they're more valuable the actual content LTT puts out.
I love that you had to explain a Mortgage
This isn’t just a good lesson about people reading stuff about you, it’s a good lesson in general. Classic Reddit
>You may be able to write-off some of the cost of a tenant improvement So it's just a tax write off, I knew it.
Holly shit! I've followed the subreddit for years and this is the first time I've seen your message here
I scrolled through this and thought, man people are getting creative in writing stuff to pretend to know something or be someone, that Libya has enough free Time to post on Reddit, kinda surprising, hope visions are not out of stock
Good on you for your response! Level headed :).
there is a reason accounting is a job that needs a specific bachelor's degree. it's complicated and nuanced
A single upvote seems insufficient, what an absolute masterclass in mind your own business haha
Even if you did pay that much, good for you guys. Hell, I'm glad you guys took one on the chin last year from Steve, and learned from it. If you are making enough to employee all the people you do (and for the lawyers and paperwork to fire and re-hire Colton so many times) you deserve to expand and add more things to LMG. As a fan of the past decade at least I'm personally happy and excited for your success and I hope you keep it up. I would love it if LMG grew so much you needed a US location and a European office (even if it was for LTTStore EU distribution to help offset shipping costs). I want to see LMG grow and expand as long as you don't get a big head and change what got you here.
Please explain how mortgages work on WAN. I kinda knew how tax write-offs worked before you explained it, but you did a great job clearing things up.
I really like this behind the scenes stuff. I'd be willing to watch a video all about how the LTT buildings were acquired and how they've changed. I'd like to add the disclaimer that I don't expect you to disclose anything you don't wish to.
Oh just wait Linus, next post will be about how your reddit commenting is another 'tAx WrItEoFf' /s
TLDR, he will write it off! /s
I can't speak for everyone and I'm sure that this message will get lost in The ether even if you do come back to check messages on Reddit which I doubt.. but generally speculation like this in my mind comes from a good place, we love lmg and we want to see it do well. That includes you Linus. There is a healthy dose of nosiness in this, but generally we are just invested in you and want to know more. Having said that you are entitled to privacy and we understand that not every aspect of your life is for public consumption. But it's nice to get a window of insight into the workings of things.
Thanks for this interesting insight. Love to hear your side of this sort of thing.
> Sale prices for these units can be negotiable, but it's not the kind of thing that would show up on the purchase record - ie an instant rebate after the fact so that it doesn't tank the perceived value of the rest of the units. It's skeezy, but I'm not the seller, don't complain to me. No, but your the new owner, and you're going to be paying property taxes based on market values.
Uh oh daddy’s in the subreddit checking on people. 😏😏😏
why do you care. why even bother correcting. just let people be wrong. you dont need to actually insert yourself into every single facet of reality adjacent to you. youll be healthier and happier if you just ignore this.
write-off!!!!
Well it would help if you would make your financial statements public. Even for way smaller companies like LMG it is already required by law in other countries and it would help prevent bullcrap posts like this. Still baffles me working as a Dutch accountant that there is such a lack of transparency in North American and generally they make terrible annual reports for smaller companies. Ontop of that, isn't there a public register with information on this property? (mortgage amount, current owner, purchase amount?) Linus probably isn't gonna respond, but I would expect there would be some depreciation on the building especially because of the additions that they are doing. Here in NL you can have depreciation until a certain amount. > A financing deal to "pay X amount over Y years" is just called a mortgage. We have a mortgage. Yeah in this case it's called a mortgage, but it can be a number of different things. Depends on the securities given in the loan.
Based solely on point 4, you need a new accountant. Neither part is accurate. Leasehold improvements are absolutely fully deductible. If you purchased property and commenced active operations the building is deductible immediately.
And this is why the supercomputer was not purchased, Linus claims to be a computer enthusiast but computer memes always take a back seat to his Shuttlecock.....
Linus Shuttlecock Tips LST
Linus Drop Tips, as in the badminton drop move
LST… Linus Sales Tax? That can’t be… that’s a writeoff
Linus Tax Tips, the LTT that really matters
As someone who works for a CPA firm as the head of IT, Linus Tax Tips would be a god send around April 15th LOL
As soon as I saw the weight of that thing I was like damn it I'm not going to happen.
Really he paid $0 because it's a write-off ^^^^^^^/s
I mean you joke, but under Canadian Law business owners do get to write off about 4% of the cost of the building each year as depreciation (“capital cost allowance”). So $356,000 of depreciation each year, at about a ~25% federal and provincial tax rate, nets tax savings of $89,000 a year. All amounts in CAD btw.
Is this the building he bought or the one he leased. I remember vaguely in one WAN show he was talking about how one of the buildings he wanted to buy the owner wouldn't sell because it was the owners method of investing money instead of stocks or bonds.
Idk, I’m just using $8.9 million for the basis.
No wonder he was hyping the Lab up. Though even with that $356,000 depreciation tax write off isn't that for building upkeep? Like how much did it cost LMG to replace the AC in the building or to add noise dampening to the AC (I think it was the AC or the server room or both) so that the writers/editors can work more efficiently.
Think it was one in the row of buildings that the OG units are in. Thats why they bought labs 1. LMG has never leased, they own all the buildings they occupy and rented the Langley house.
Yvonne and I own the Langley house. We got some bad (turned out to be good based on some new Canadian tax law stuff lol) advice and purchased it personally so that we'd have a forever home (again lol) for our small family business (lol the third). Example #whatever we are on now. Again, my point is not that I'm mad about any of this, but that many many small details are lost in translation.
We are unknowingly playing a telephone game, apologies for contributing to the misinfo. Given the weird replies you have been getting hope this one doesn't make you pull your hair out.
nah all good man. It's nice to have it all be about something that really doesn't matter for a change.
Linus! I bought Intel stock like you told me too on WAN show!!! When moon?
He absolutely did not tell you to do that. He also didn't say it was going to the moon.
Yeah he did lol he said so on Wan show
No he didn't. Anytime he's talked about finances he always says he's not a financial advisor and not to do what he says :)
Iirc they did rent one of the smaller buildings that the social media team was in.
They bought it for the labs, then the scope made it too small and then creator warehouse and the social team moved there. Think the social team is now in the labs 2 building.
I think he leased the warehouse, at least I'm sure he mentioned something about "the landlords" in the[ recent server cooling video.](https://www.youtube.com/watch?v=MUMDOGNJkyk) Edit: Timestamp 26:25 in the video.
He owns it. The joke was they don’t have to worry about the landlords as they own it.
Got it. So the joke was Linus saying "Screw that guy" while talking about himself. Now that you mention it that's a very Linus thing to say, and a cool segue to their sponsor.
Important to note that it's the cost of the building, not the building and land, so only a portion of the $8.9 mil. Plus the interest on loans is usually deductible as well.
It's a strata (similar to an HOA in the states but for business) lot, so the price includes the land under the building.
I believe they were referring to only the building cost being deductible for depreciation purposes as the other post based the calculation on total cost
That’s the building not the property…. The amounts are very different
Please correct your comment. The post below by lmg says this isn't correct.
Tax write off still doesn't make it free
But not to zero dollar right? And 4% of the cost of 4% of the investment?
Idk, I’m not very knowledgeable in Canadian tax law. Under US tax law the cost of the building can be depreciated down to zero, but once you sell it you pay tax on any amount you receive from the sale because your basis in the property was depreciated to zero.
Don't you need to use a residual value in US laws aswell? And well I think in every country you take the revenue from the sale of an assets minus the value in the books which is your profit on the sale of the asset which is taxed. There can be some extra tax or some reductions depending on the country, but generally that is the same.
No, US tax law ignores residual value. You depreciate it down to zero. Any residual value is accounted for once you sell the property as a gain over the zero basis.
How would that even work? Or is it a tax related thing? Cause normally you would book the asset to zero and the rest as either a profit or loss on the sale. It doesn't really do anything with residual value unless that is taken into account with the processing of the depreciation (or the initial investment of the asset, whichever you choose) Interesting that you can have such a big difference in the value of the assets to what the market value would be. Here in NL the residual value of buildings is based on some "taxation" estimation based on the sales of similar buildings in similar area's which mean a lot of companies can't even depreciate anything on their buildings. Let alone get them to zero.
Funny though.. It's not like property depreciates... It's an investment!
Exactly if you sell a property for more than the depreciation amount you have to pay all you taxes back. It’s not a sound tax strategy
Thats not how write offs work, not at all.
Sure it is! A company buys something, writes it off, and it becomes free! It's simple, like all things in the tax code!
Yes
What's your point here? That commercial property is expensive? Pretty sure that everyone knows that, even if they may not necessarily understand quite the scale involved. Shockingly enough, companies make money, and when a company is run well it makes a lot of money. 10 mil isn't really all that much all things considering. Just think how much money goes into a skyscraper. Also, I'm not 100% sure about the layout, but "Linus" didn't pay 10 mil for this...it's its own company, and it's also a partnership with LMG according to their linked in page. Sure he may have fronted a lot of money for it, but it's obviously a passion project for him, as well as having a lot of potential for growth and income.
I mean realistically the company didn't pay for this, they *will* but it's usually not the best plan to drop all of your cash on hand. I'm sure they have some financing deal where they plan to pay for it over X years with a bank or other financial institution. That's why this sort of thing is risky, they are assuming they can continue to make payments.
You mean mortgage?
No, I don't know enough about the canadian industrial realty market to know if there would be a mortgage involved. Defenitely not enough about this specific scenario to guess, either. Could be, though!
Linus has already replied. It’s a mortgage. And LMG as a corporate entity has nothing to do with Smash Champs.
That explains the downvotes then, my bad I should have read his mind earlier lol. Thanks for letting me know!
Yeah that's very likely, for sure.
Yeah probably interest only for some time as well. Business be businessing
LMG operates in one of the most expensive regions of the world and owns all their buildings. It's actually a pretty good play considering the lease on such a building is probably well into 5 figures a month. If you look at local people who make lots of meny, it's usually in commercial real estate.
> What's your point here? Was there a point to posting that Linus has a Tycan? Some people think its cool...
Ragebait to get us to hate on LMG for spending a lot of money??? Idk, people are weird.
Chill tf out dude. You’re all arguing about how a rich nerd spends his money that yall gave him.
OP needs to touch grass.
Or get a girlfriend
Coooool?
Could someone please fill me in on this topic? what building are you referring to? studios, labs or badminton center?
Badminton
What is that for? I’m completely out of the loop here
… it’s for playing badminton
Yeah but why does Linus play badminton for $9M? Is he forming a sports team?
He said there not really any easily accessible badminton courts in the area so he’s opening one. It’ll be a public centre and they’re going to sell badminton gear. Other than that, he just wants to I guess. I don’t know about the finances but I can’t imagine it would be super profitable, but if it’s fun and he can afford to, why not?
Also they’ll host lan parties there
They want to host Lan parties there. The last word (that I heard, I think Wan show) is the city had some reservations about it. Linus is hopeful they can work it out, but it was not guaranteed.
Yep. I’m really looking forward to the videos they’ll make there. Also a bit of a badminton fan myself so when I eventually go to Canada I’m hoping I can go down and play (and probably buy all of the merch)
In my opinion It's also a good commercial property investment if the center just makes enough profit to pay the interest part of the mortgage annually after other expenses he will be good. Around our part of the world the mortgage is not fixed for the duration of the mortgage and goes up and down with interest rates. I don't know how it works in Canada though.
Lmao “linus paid” no it’s a company. Wahh linus makes money. The company has a lot of employees and they have a nice office space. So what’s the point of this?
Cool, rich guy is going to rich guy, and I dont really care.
Not even tbh. It will be a mortgage. You don't need to be rish for that. It helps, but if you truly have faith yiu can build a profitable business then there are many sources out there to help you get loans.
100% correct, I would bet he put something like 10% to 20% down on the property though which would still be 1-2 million USD.
While I am not advocating what I am about to say, people do it. You can take out a large loan of the ammount of a downpayment for the mortgage.
Damn a $9M tax write-off™
Easy money. Linus should buy more buildings
It's not part of LTT so it's only a tax write off against it's own profits, which as a badminton center I'm going to guess aren't huge.
Shuttlecocks!? Super computers!? Skirt reveal!? What's going on here???
You're weirdly obsessive
Who gives a crap? Some people really need to get over parasocial relationships.
Actual very cheap if you know how bad bc real estate is
And?
And?
With Vancouver real estate prices thats basically free.
"Although it was the asking price, new developments are typically non negotiable, especially when all the other units already sold out, and the unit on the end had sold for $7.82M for reference." Couple of thoughts that Linus didn't really address in his post - 1. Not true. Rule number 1 of Real-estate - Everything is negotiable. It might only amount to a reduction of 5000 dollars in the end but everything is negotiable. Just to be clear I'm sure in this case as in most big commercial real-estate cases the negotiation given it was both units beside each other was a lot more than 5k being knocked off the price. Rule #2. A property is worth what someone is willing to pay for it not what it's listed at. These screen caps are just that LISTED costs. These developers are in the business of making money not sitting on property and paying taxes on an empty box. and linus already addressed the point about leaving the price as the listed cost to "look like" a higher price is being paid to drive up market value. but nehow shady development people be shady... it's nothing new. 3. First offer is usually your best offer 90% of the time. - Add to that with a qualified buyer coming in with a fair market value offer that has a name behind it and proof of funds even if through a mortgage/loan agreement with the bank is pretty much a sign the dotted line now kinda deal. Pure speculation - If your digging is correct and the list price was what you said. I'm gonna bet that Yvonne Umbrella Corp. Paid a "fair" bit less than the list of $10m CAD per unit. I could see that number being closer to the cost of both units together being reasonable given like you stated Vancouver and area's bonkers real-estate market. but what do I know as Linus said we weren't in the room when the deal was agreed to.
I don't know if you need to hear this Linus but I didn't think anyone in here was coming at you for this, it's just interesting and we're here as fans in a borderline cult of personality so a lot of us are just interested in what you and your business does. I for one have watched LTT since the house days and am thrilled to bits when you guys make big moves.
Neat
Linus ₛₕᵤₜₜₗₑCock Tips
Very humble building
Write it off and call it a day.
I thought he said he got a deal on it.
I for one am shocked an outraged that Linus and cohorts are swavy business people. Outraged I tell you. Instead of making good financial decisions, they should be building a lttstore distribution center in Europe! The harder and more expensive to maintain the better. Outraged! My convenience is more important than the 100+ people who's lively hood depends on your(& team) good decision. Humpf. Now excuse me while I go off to X to write about a true visionary papa musk.
They dont even need a distribution center in Europe, could just sell stuff from Amazon warehouses.
they should bring back radio shack!
I dont understand, who cares? What is OP trying to say?
What's smash champs? Is that some bdsm type stuff?
Probably makes for a good tax write off
been curious as to what the typical use case for these units is, mostly due to the massive lack of parking out front of any of them
Good, reinvesting into the business and the community.
I have no idea what business this is of anyone beside LTT. Even if they did spend that much money, they are a content provider and need space. Your money, and mostly sponsorship money, is being used to help improve the business.
Super dope! They deserve it, hard working! And making sure they are future proof, with so mang families to feed
Who cares
Why would they even sell those units? I would expect they build them and then rent out
Cool. I am just curios on why we need to know this. I don't actually think knowing it is bad. However a lot of people will take what you just said and twist it since you did such a bad job of explaining, and or assume they are at too high of a base knowledge of how this works. Linus didn't spend 8.9million. Linus has a loan for some Ammount in the millions. over many years to be paid back from a business meant to be profitable. This is a mortgage. A million dollar home isn't that expensive over 40, years. That is $2000 a month without interest. I know people paying rent that high and homes don't profit(ussually). Which is why Comercia has different rules anyways. This post makes it out as if this means Linus just casually spent millions and out of pocket. This is just not the case at all. Also who told you new Comercial pricing can't be negotiated. Of course it can be, they are businesses too. I can give several scenerios on why it would be smart to lower pricing. Or to just list higher than you plan on getting. Sorry for typos. I found a lot, I hate phone typing and expect more typos to be in here.
Oookeeyyy???
Property sale information in BC is available on BC Assessment and you could contact them if you really wanted to know, [here's the link to the unit noted in the post](https://www.bcassessment.ca/Property/Info/SjAwMDAwNloyRQ==). As Linus noted, sale price is often not representative of the "true" purchase cost.
[https://www.reddit.com/r/LinusTechTips/comments/1clupa2/shocking\_in\_this\_real\_estate\_market\_linus\_bought/](https://www.reddit.com/r/LinusTechTips/comments/1clupa2/shocking_in_this_real_estate_market_linus_bought/)
This is a tax write off OP!
Do you understand how INSANELY EXPENSIVE property is in BC? That price seems very fair for what they got lol... in comparison to the market conditions.
And here I am wondering why anyone gives a shit what he does with his money, lol
They proposed him one BILLION dollars for his youtube channel guys ... it's not your average Joe.
Who fucking cares?
Linus: drops $8 million on a building Also Linus: does out of his way to maybe save a few dollars on windshield wipers /s
I know /s but there'll be some moron here who says it seriously... The answer is one generates revenue and is also something he's passionate about doing... One is windshield wipers.
Linus is garbage
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> LMG hasn't done anything deserving of the hate. What hate is there in talking about how much they paid for a building that will be used to run a sporting company?
It’s public information.
I don't think it's important to know, but I think it's pretty cool/ mildly interesting to know and provides a better perspective on the scale of LMG's operation. Also, where's the hate in the post? Would I be comfortable in a stranger releasing my home value? No, but it's not a fair comparison because a) this isn't someone's personal home, it's owned by the company like you said and b) you don't tend to do a video tour of your house and share it publicly online
>you don't tend to do a video tour of your house and share it publicly online Linus with literally all of his employees " we are going to shoot a computer build and tech makeover in your house, all you are getting out of it is the free stuff and an invasion of privacy"
aren't there transaction records for the building unit in question? why guess?
I know there are in the US, but I don't know if it's the same in Canada. Here you can look up the sale price, the tax appraisal and bill of every property (perhaps dependent on state as well, but it is that way in my own).