Help with mortgage. Use big 5 banks or Commerical.

6 Replies

Hello, my business partner and myself are looking for some advice from experienced investors. To give a brief background about us, we each currently own 3 and 1 rental property in our own names. We each now have a holding company and also have a joint corporation that is owned by each of our holding company’s (50% each). We have purchased an out of province rental property and looking to see what is the best option for us to put a mortgage on the property. We are purchasing the property with cash and will be doing a brrrr 1-2 months and then putting a mortgage on the property. We have heard options of putting the mortgage under one name and using a big 5 bank (this will allow us to get 5 properties each under our own names, if 5 is the max allowed) or would you recommend using a commercial loan and purchasing it through the joint Corp? We are in BC and the property is in Saskatchewan.

Thank you in advance and if you need more info to answer the question I can provide that for you.

Jay.

@Jaydon H. Canada's big lenders don't have 'portfolio lending' that you may hear about in podcasts. Also, commercial loans have nothing to do with your business structure; a corporation can secure a residential loan and an individual can secure a commercial loan. Commercial loans are for 6+ (sometimes 5+) doors in one acquisition (generally one property, sometimes more considered). If you are buying multiple SFR properties or similar, each will typically carry its own loan. B class and smaller lenders (credit unions) can sometimes get more creative.

@Jaydon H. Investor focused Mortgage agent here. Its very hard to make a good suggestion for your specific situation without knowing more. I would have a million and one questions regarding your plans for future growth, existing portfolio, careers, income levels Etc. All of this is much easier over a phone call if you would like to give me a shout. Feel free to call me on my cell at 705-930-3770 if you think I may be of some help. 

@Jaydon H.

Jordan has given you great advice. There are so many “what if’s” here you need to sit down and map out possibilities.

Also, congrats on investing in Saskatchewan! I’m getting the same rents as Edmonton (suited houses) and paying $50-$75k less to do it. Great point in the cycle too!

Hi everyone, 

Thank you for responding to my thread. I know it is difficult to give a straight answer as there are so many variables to it and there isn't a "right answer". I appreciate everyones input on my question. After speaking with my local broker, a local bank and then a rep from CIBC located in Regina, my business partner and I have decided to go through CIBC as we feel it best suits our goals. They can work with us in having dept coverage ratio of 1.1 for our rental properties which will allow us to secure 5 mortgages (max allowed with CIBC) with them without needing a crazy amount of income which is needed with other banks were using the total dept service ratio. 

Good to hear you were able to get it done with CIBC, they are definitely the most investor friendly big bank.

I highly recommend spending some time reaching out to a mortgage specialist at at least two SK credit unions. They are subject to different laws(provincial) than the big banks and some are willing to consider portfolio lending. 

Good luck with your investing!