multi-unit purchase?

[zapper7177]

Thanks invesmart.

My original question was in regards to the 25% down on my part which you seemed to answer.

I have my eye on a couple of sub 55k/door in northeast alberta but in "crappy" town as you guys define it. This area has strong rental rates but is directly tied to the oilfield. But people still need places to live.

I have a duplex which we completely renoed and are recieving arond $900/ month cashflow after all contingencies are paid.
The commercial properties I know of is a 12 unit low rise and 46 units (1,2,3 bedrooms) in three different complexes.

But once again it all depends on the cash needed to bring these units up to snuff.

Thanks again for all your input

 

[dbutler]

QUOTE (investmart @ Dec 27 2009, 04:47 PM) Hi, not sure why zapper7177`s original question was not clear. the question is not how much the banks will give. as mentioned zapper7177 already knows/assumes the bank gives 25%(!) that`s close enough. His question (if I understand it correctly) is whether or not the bank will be OK with a VTB covering the remaining 25%. I believe the answer is no but close - the banks in many cases will accept a VTB of around 15% so you have to put around 10% or maybe 15% of your own money or your JV partner`s money in which case you put zero. Regards, Neil

 

[dbutler]

Is there a difference between VTB mortgage and a second mortgage - I assume they are the same. If I have a JV partner with the downpayment but I will be the only one on title, how do I prove the income to qualify for a mortgage? Also, I am looking at an 8-plex, so can I use his money as the downpayment and then take a VTB mortgage from seller to make up the difference required by the bank. At the end of the day, I will be on title, using a JV partner funds for downpayment as he doesn`t qualify for mortgage and using VTB to top up difference in funding needed by the bank? Is this doable?

 

[Nir]

"how do I prove the income to qualify for a mortgage?"
T4, tenant acknowledgement, NOA, etc... in other words, what do you mean? question is not clear - not sure why you think your JV partner putting the down-payment amount has any influence on the process/documents YOU have to follow/provide to prove YOUR income.

"Is this doable?"
yes, this is doable... in theory. whether or not this is doable by you, only time will tell good luck.

 

[Thomas Beyer]

QUOTE (dbutler @ Mar 12 2010, 11:21 PM) Is there a difference between VTB mortgage and a second mortgage - I assume they are the same.yes it is usually a 2nd mortgage but could be a 1st .. i.e. a vendor supplied mortgage or in other words: the Vendor Takes Back a mortgage !

QUOTE (dbutler @ Mar 12 2010, 11:21 PM) If I have a JV partner with the downpayment but I will be the only one on title, how do I prove the income to qualify for a mortgage? Also, I am looking at an 8-plex, so can I use his money as the downpayment and then take a VTB mortgage from seller to make up the difference required by the bank. At the end of the day, I will be on title, using a JV partner funds for downpayment as he doesn`t qualify for mortgage and using VTB to top up difference in funding needed by the bank? Is this doable?
for an 8-plex the building has to qualify for the loan .. NOT YOU ! It is a commercial mortgage / underwriting !

Yes, they will look at your networth statement too .. as secondary / supplementary information.

In some province, like Alberta, the commercial asset has to be held in a corporation. Thus, the title and the mortgage is in the corporation`s name, not your own, but it is usually also personally guaranteed by the class A voting shareholder`s of the corporation. So depending on the agreement with your investor partner, he/she may or may not be required to sign a personal guarantee. In most of my (earlier) JV agreements the investor had class B non-voting shares and as such was not required to sign a personal guarantee !