BRRRR Insight Canada (British Columbia)

[Kevin Keresztes]

Hello,

I am hoping to learn more about financing a BRRRR in Canada. I recently had an unsuccessful offer on a house and was pre-approved by one of the Canadian Big 5 banks. Because it was a rental property, the bank would have had to get a market rent appraisal, and if the market rent was lower than I had anticipated in my analysis, then I would have had to put more than 20% down on the property. The stress test was also another factor making it harder for the bank to lend.

Rather than locking away all that equity in the DP on a buy and hold, I am now interested in trying the BRRRR method; however, I am worried that during the refi the ARV will make it unsustainable to the bank if I cannot achieve the high rents they require to make the mortgage work under the stress test.

I know there are lenders out there that would be easier to work with on a BRRRR, but the Big 5 bank rates are very attractive right now.

Also, are there lenders out there that would finance the initial purchase and then allow for a refinance say, 6-months later after the renovation and tenants are in place? 

I really appreciate any insight or advice on this topic!

Thank you,

Kevin