Best Financing for a Mix Use Property

[reinvestors88]

We are considering to buy a rental property with a residential and commercial zoning. We checked with a bank lender if they will be willing to take the mortgage but they declined it because of the zoning. Is there a better way to finance this?



Your expert advise is much appreciated. Thanks.

 

[Thomas Beyer]

Talk to a mortgage broker. Likely you will get up to 65-70% or so LTV, with higher interest rate than pure residential. Depends on income and area. Lower LTV (and/or higher interest rate) for small towns or weird sub-location or poor income or huge deferred maintenance. Often local credit unions are good sources of capital in smaller markets !

 

[reinvestors88]

We also checked with a credit union but they also declined to commit. The property is in great location and shape with rental income of 1% of our planned Offer price. Yes, I will approach a mortgage broker in this case.



Thanks Thomas for your advice.

 

[RobMacdonald]

Where is the property you are looking at? As Thomas mentioned, you'll have to check with many different lenders.



At the end of the day, you may have to pay a slightly higher interest rate, but sounds like the overall investment is worth it.



Let me know if I can help out.

 

[reinvestors88]

Thanks Rob. The property is in one of the best cities in Ontario and will generate descent cash flow after paying all expenses.



As Thomas suggested, I arranged appointments with local (instead of national which I previously approached) credit unions who are more familiar in the area and go from there.



I'll be in touch Rob. Thanks again.