How to get financing?

DavesGirl

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Registered
Oct 9, 2007
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British Columbia
#1
I haven`t finished reading "RealEstate Investing In Canada" I had to return it to the library before I had a chance to finish it, but I`ve got it on hold again so I`m looking forward to getting it back! Anyway, I`ve been doing some reading on real estate investing and everyone makes it seem like money isn`t an issue... banks WANT to lend money.. soo.. how does this work? I know with our mortgage on our condo they would only give us a certain amount based on our income. I`ve heard that they don`t consider potential rental amounts in their decision.. is that true? How do you get into investing in rental properties if you don`t have any money, but the rental of the property would pay for it? We`re looking at an opportunity for $565,000 but can`t see the banks loaning us that amount of $$!? Looking for tips and ideas. Thanks!
 

MikeMcCrae

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Sep 3, 2007
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Leduc, Ab.
#2
Yes the banks do want to lend money, but they want the deal to make sense and not put you in hardship. Rental properties can be bought with as little as 10% down, with out getting very creative. On the property you are looking at you want to make sure that it debt services.(income covers expenses) Depending on the lender depends on how much rental income is included in the calculations for affordability. You are doing the right thing, start by asking lots of questions, and there are lots of people here willing to help you.
 

PeterKinchMortgageTeam

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Sep 11, 2007
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#3
Hi there,

Your membership in REIN will definitely give you some great strategies to get involved in properties with little or none of you own money. One of the keys will be to understand joint venture agreements. Genworth financial, currently has a program available through most lenders to put as little as 10% down, but you will pay a hefty insurance premium on top of the mortgage amount. Depending on the cash flow, it may make sense, but you want to make sure you are dealing with a lender that understands your long term goal as a real estate investor.

CMHC just announced another very innovative program, 100% financing on rental properties. This was a very recent announcement, we have not heard of any lenders offering the program yet, but we`re confident that other insurers, Genworth and AIG may follow suit.

Rob Macdonald
General Manager
Peter Kinch`s Canadian Mortgage Team
604-939-8326
 

DavesGirl

New Forum Member
Registered
Oct 9, 2007
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British Columbia
#6
Thanks everyone! I don`t think this property is going to happen for us. I was looking at all of the mortgage being paid by rental income... plus using the land for something ie. renting it to a farmer or something to cover the mortgage cost and hopefully earn us some money
Buuuuuuut.. there`s already an offer on the property and I guess I`m sort of giving up since it`s such a large purchase and I think I would need more time to work out the financing than the time I have available. OH well! We`re going to keep looking. Thanks again and I`m sure to be on these boards quite often now that I`ve signed up