All Forum Posts by: Sean Osborne

@Dominic Mazzarella  I think so as well. My only concern is the borrower has no skin in the game 

Hey guys, need some insight.

I’ve got two private loan deals on the table. The first is for a property in Hamilton being purchased for $254K—he’s asking for a $250K first mortgage. He’s a broker with other properties in the area valued around $340K and the current owner had a $330K appraisal last year on the subject property. I have a conservative appraiser from Schindler going in who does appraisals for the banks. If the value holds, I’ll likely do the loan at 11–11.5% interest with a 2–2.5% lender fee. The property is held in his corp, but I’ll get a personal guarantee, and if appraisal value is lower than expected , I’ll ask for cross-collateral or reduce amount loaned out. I also think to myself with this deal Worst case, I’d foreclose and offer to buy the property back at my loan amount for 250k. Since I’m about 600k liquid right now. Then I could just hold it until it appreciates.

The second deal is with my real estate broker—he’s asking for $300K as a second mortgage on a construction property in Pickering that’s about 70% complete. RBC holds the $1M first mortgage, and comps are around $2.5M. I told him I’d only consider it if he adds cross-collateral as the market is a bit risky and the property is u see construction. He hesitantly offered another property that just closed for $1.3M with 20% down that he uses for his office. If he allows me to use both properties, I’d lend at 11% annual interest with a 3% renewal fee after one year. His exit strategy is to refinance next year and pay my 300k back.

Which deal makes more sense?

The other person is my personal broker

Hey guys

I’ve got two private loan deals on the table. The first is for a property in Hamilton being purchased for $254K—he’s asking for a $250K first mortgage. He’s a broker with other properties in the area valued around $340K and the current owner had a $330K appraisal last year on the subject property. I have a conservative appraiser from Schindler going in who does appraisals for the banks. If the value holds, I’ll likely do the loan at 11–11.5% interest with a 2–2.5% lender fee. The property is held in his corp, but I’ll get a personal guarantee, and if appraisal value is lower than expected , I’ll ask for cross-collateral or reduce amount loaned out. I also think to myself with this deal Worst case, I’d foreclose and offer to buy the property back at my loan amount for 250k. Since I’m about 600k liquid right now. Then I could just hold it until it appreciates.

The second deal is with my real estate broker—he’s asking for $300K as a second mortgage on a construction property in Pickering that’s about 70% complete. RBC holds the $1M first mortgage, and comps are around $2.5M. I told him I’d only consider it if he adds cross-collateral as the market is a bit risky and the property is u see construction. He hesitantly offered another property that just closed for $1.3M with 20% down that he uses for his office. If he allows me to use both properties, I’d lend at 11% annual interest with a 3% renewal fee after one year. His exit strategy is to refinance next year and pay my 300k back.

Which deal makes more sense?

The other person is my personal broker 

@Cody Neustaedter Send me a PM & we can chat

Hello everyone, are there any Canadian investors here? I currently oversee five rental properties with the assistance of a small team. I have significant equity, which I won't fully disclose, but I'm keen to network with individuals in Toronto, Ontario, Canada. Please let me know, thank you.