Should I walk away from this condo in Kelowna

[MKBridge]

HI:
I have an offer in on a condo in Kelowna BC. It is 2 blocks from downtown and the city waterfront park and fairly close to the hospital. I completed the property analyser and came up with positive cash flow. I have been dealing with Peter Kinch`s team for a mortgage (great people by the way).
The issue is that it is a 19+ building. I thought this would be ok because of the location and attract hospital workers or downtown employees. Plus the location is pretty attractive from a selling point in the far future.
The lenders do not like the fact that it is a 19+ building for marketability reasons, and age discrimination.
The mortgage lender said she could probably get me a mortgage from a particular lender, but I would have to put 25% down. That does not thrill me because I would like to distribute my cash/loc over several real estate investments. It would be an extra $7500 cash.
This is my first real estate investment, but I am keeping my emotions out of it. My thought is to walk away from it today
My condition for financing is finding a mortgage that I am satisfied with. I don`t think I am satisfied with 25% down.

Thanks MK

 

[mortgageman]

[quote name=`MKBridge` date=`Jun 23 2009, 08:29
The issue is that it is a 19+ building. I thought this would be ok because of the location and attract hospital workers or downtown employees. Plus the location is pretty attractive from a selling point in the far future.
The lenders do not like the fact that it is a 19+ building for marketability reasons, and age discrimination.
The mortgage lender said she could probably get me a mortgage from a particular lender, but I would have to put 25% down. That does not thrill me because I would like to distribute my cash/loc over several real estate investments. It would be an extra $7500 cash.


CMHC will not insure high-ratio mortgages in age-restricted buildings. This is because it is a Crown corporation and can not be seen to discriminate in any way.
Your broker will have to select a lender that will use Genworth as the insurer if your deal is indeed high ratio. High ratio for most banks is anything less than a 20 percent down payment. There are a few that want 35 percent down for rentals.

 

[RobMacdonald]

And the problem you`re going to have is that Genworth is no longer offering financing for real estate investments. So you may not have any choice. You could probably get 80% financing and if you have a good debt service ratio, there may be some other options.