Best lenders for rental property?

[John Wesbrook]

Hi guys,

I'm currently aggressively saving for a down payment with the goal of getting into the student rental market. Once I get my first property, my goal would obviously be to maximize cash flow. In that regard, I've heard of financing terms in the US where the lender allows you to only make interest payments for the first two years of the loan and start paying down the principal from the third year onward. Are such terms typically available to first time buyers in Canada by the big five banks? 

Thanks!

[Huong Luu]

Suggest you sit down with a mortgage agent that specializes with investors (you will be able to find a few on BP). If you are getting student rentals, some lenders won't lend on that. Also, depending on how you are set up (ie solo or corp) your debt service ratios will affect your application regardless of your down payment. Some lenders will consider just the building you are buying if it is over a certain # of door. 

Have you run the #'s using a HELOC as your 'build up capital'? That way you have principal paydown and not carrying interest on the private loan until you need it. Also keep in mind, with the economy the way it is now, may private lenders are slow to lend. You might want to get a traditional and when you are ready to buy the next property, get a 2nd position private.