All Forum Posts by: Roy N.

@Kenny Clark

If you received the downpayment as a gift from your father-in-law, undoubtedly he will be required to sign a declaration that the funds are a gift (with no expectation of repayment).   Any arrangement between you to the contrary would need to be on your bond and off books.

Conversely, if he were to come on title as a Tenant in Common, then his money becomes his equity share in the property and you can draft an agreement whereby you buy him out over time.

@Kenny Clark

As you discovered, your down payment must be of your own means (which is why equity drawn out on a secured Line of Credit qualifies, but borrowing against an unsecured line of credit, rotating credit, etc. does not).  Alternatively, the downpayment may be "gifted" to you by a third-party (typically a family member).

Seller/Vendor financing is essentially when the Vendor becomes the bank and takes-back a mortgage following the sale of the property.  A vendor may carry the entire financing in first position, but more commonly carries a smaller (10-15%) second position to your primary lender.

The first scenario is not terrible common in Canada - in instances of smaller properties - unless the property is hard to move or you have some other connection with the Vendor.   If the Vendor is to be the primary lender, then the down payment is negotiable between buyer and vendor.  The second scenario could allow you to reduce your downpayment to 15% or 10%, but some lenders will not entertain Vendor second on residential (1-4 unit) properties.

Another option is an instalment sale.  This scenario differs from the Vendor carry / Vendor financing in that title to the property is not transferred to the buyer until the end of the instalment contract.   Again, this is not a common option vendors are willing to pursue.

While a trust (or trusts) may ultimately play a role in your organization - particularly w/r to sharing with your family, they will create more overhead and generally have a fixed lifetime.  The use of trust, along with corporations, is something to explore with your accountant as your holdings grow.

Information security and privacy is my "other" profession ... I've spent decades educating folks to be more critical of disclosing personal / sensitive information, so it would be a little hypocritical - or, in the case of a person's SIN, illegal - to insist otherwise ;-)

I would have been a tenant candidate who would not have disclosed his SIN.

We provide all those who enquire a copy of our application.  Most enquiries arrive via e-mail these days and we have an information package on the property along with a PDF copy of the application sent in response.   We also provide an on-line (via DocuSign) version of our application - I prefer this approach as mandatory fields cannot be skipped.

In rare instances we still provide paper copies to candidates.

We've been reporting rent payments for years, even in instances where we do not have the tenants SIN.  

@Yuan He

There is a mix of advice above ... some of it poor.

In Canada, you may ask an applicant to provide their SIN on a tenancy application, but, legally, you cannot make it a mandatory requirement -  not on the application nor when a lease is signed.

On our application we clearly indicate that providing their SIN is optional.  We also advise the applicant that without their SIN number there is a risk we will not be able to pull their credit history.  In reality, unless the applicant has a very common name (i.e. John Smith), if they provide their residential addresses for the past 3-5 years you will usually be able to find the correct credit profile.

You should always pull your credit reports independently.  We use RentCheck and TVS to pull credit histories in Canada and the U.S.A.   There have recently been some third-party providers start-up in Canada which will provide screening services - I have not evaluated any of them; they didn't exist when we started and performing our own verification process runs smoothly.   Do not accept a credit report from an applicant - they are too easily doctored.

@Account Closed

There is a substantial spread between a live-in superintendent who handles day-to-day matters (cleaning, minor repairs, etc) and light turn-over activities and full property management (advertising and leasing, managing service providers, receipts & payables, etc).

Without knowing your role activities, it's hard to determine where you might fall on that spectrum. 

@Joaquin Camarasa - there are no legal issues with respect to discounted rent in exchange for performing work activities the property, nor for including accommodations as part of a compensation package.   Both are common practices.  

There may be reporting requirements, incumbent on the property owner and the employee, for taxation purposes.  Additionally, in many jurisdictions when accommodations are provided as part of employment, an end of the employment results in a termination of tenancy.

Vincent:

There is nothing new here.  Might want to reach out to  @Doug Pretorius who uses lease options extensively in Ontario.

@Jon Marois

The rule is your investor comes first.   That said, if the private investor is experienced and simply providing financing,  s/he would have presented you with a set of terms (rate, duration, costs, etc).  While they may request an assignment of rents as a means to guarantee they receive their repayment, they typically want only repayment of principal and interest.

If the investor's offer is more of a short-term partnership - i.e. they provide the purchase capital  - and perhaps some rehab funding - then when you refinance or sell, you pay them out (principal, plus interest / profit percentage).   In these situations, your agreement could see you making interest payments to the investor during make-ready and wile you stabilize the property.   In private lending, the arrangement is whatever the parties negotiate (within the confines of the law)

@Taylor L. Private money is not the same as hard money.   Additionally, U.S.A. style hard money lenders do not exist in Canada.   We do have comparable entities in Mortgage Investment Corporations (MICs), but their operations are a little different (naturally as the legal and regulatory framework are different).