Duplex or Fourplex as a Principal Residence

[mikemcmillan49]

I'm considering buying a duplex or 4-plex in the neighbouring city to where I live and work now, and want to purchase it as my principal residence. I own my double wide free and clear, and don't want to use the equity for this purchase.

My 1st question has 2 parts. One is can I do this and ? Two use the positive cashflow from the other suite(s) in my mortgage calculations to qualify?



Second Question is that if I am worried about my cap limit 5-8 years down the road, which type of lender should I use for my principal residence purchase?

 

[Sherilynn]

First National would be one of my first choices for lenders. They only lend to people with 4 properties or less, so once you have more than 4, you cannot use them again until you get into multi-family (6-plexes or more).



Last time I used them, they also had a 1-year insurance policy (for unknown issues) at no extra cost. In our case, we had to replace our main sewer stack because of a leak in the joint, and they paid the $1000 bill. It's been a while, so I don't know if they still offer that.



If you are buying the new property as your personal residence, then you may want to consider getting a HELOC (home equity line of credit) on your double wide for future investment properties. The interest will be tax deductable as long as you use the money for investments.



You may also want to consider an all-in-one product for your new personal residence mortgage. That way you could channel all rent payments from all properties to the personal mortgage and have an automatically increasing HELOC to fund the rental property expenditures. Transfers your debt from non-tax-deductable to tax-deductable.

 

[tnguyen]

You can check out Peterkinch.com or talk to Peter Kinch. He will recommend you which one is the best for you.

 

[markl]

up to a Duplex you can put 5% down and on a 3 - 4 unit you can put 10% down. Rents can be used to help qualify assuming the suites are legal.



As for Capping out on mortgages from certain areas I would definitely speak with a mortgage broker who works with investors.



I would give Kevin Boughen a shout he is PK approved and one of the best in the business. [email protected]

http://www.InvestorMortgages.ca



Where are you purchasing your property?



Regards,

 

[TonyMandrique]

Remain cautious in choosing your team members.....

 

[mikemcmillan49]

[quote user=Sherilynn]



You may also want to consider an all-in-one product for your new personal residence mortgage. That way you could channel all rent payments from all properties to the personal mortgage and have an automatically increasing HELOC to fund the rental property expenditures. Transfers your debt from non-tax-deductable to tax-deductable.



Exactly the answer I was seeking Sherilynn. I am unclear however about what an all-in-one mortgage is. I will look into First National or that type of lender. Thanks alot.

 

[mikemcmillan49]

Mark, your reply along with Sherilynn's rounds out the answers to all of my questions and points me in the right direction.



I will be buying my principal residence in Prince George, BC. I know the city fairly well and have a good handle on which areas to focus on.



Cheers



Mike

 

[Sherilynn]

There are threads here about automatically increasing HELOCs, or you can google it.



Manulife One, Scotia STEP, and National Bank, are just a few, but many banks now offer them. Just be sure that the product suits your needs. Some offer chequing accounts under the umbrella to make the account a true all-in-one, whereas others are very limited as to how you can divide the borrowing.