Hello Everyone
I am a Canadian Expat considering the purchase of some investment property in Ontario. I have a partner who lives in Canada and we had a few questions that maybe some of the experts can answer.
1. We have approached a Commercial Mortgage Broker and were told that their fees were 3% of the total mortgage amount, with typically 15% down. They prefered that we had a corporation and would require us to have a networth that would cover 25% of the financing. They also said we would be required to sign a personel guarantee on the mortgage. oes this sound typical? If not, can anyone recommend someone better?
2. Interest Rates: When evaluating property, is it typical to use current interest rates or is it more prudent to use an inflated interest rate? How does one minimize the risk against interest rate increases?
3. Insurance: What types of insurance do owners recommend acquiring? I have a friend from New Zealand who says that they buy rental default insurance. Is that possible in Canada?
4. Property Management: What would you typically look for in a property manager? What rates do they charge? We would like to get one Manager that we could rely on and use them over and over.
5. Joint Ventures: What terms are usually offered to persons who put up financing on JVs? How are these usually structured. We are looking at the 6-24 unit sized buildings.
6. Rent to Own: How does this structure work? We have been looking at a set of properties (3 6 plexs) and may approach the owner to buy 2 but want the option next year to purchase the 3rd. This is mostly do to available cash.
I know these are alot of questions. I am aware of all the tx considerations from my Accountant. Thanks in advance for any help or insites.
Regards
Bruce
I am a Canadian Expat considering the purchase of some investment property in Ontario. I have a partner who lives in Canada and we had a few questions that maybe some of the experts can answer.
1. We have approached a Commercial Mortgage Broker and were told that their fees were 3% of the total mortgage amount, with typically 15% down. They prefered that we had a corporation and would require us to have a networth that would cover 25% of the financing. They also said we would be required to sign a personel guarantee on the mortgage. oes this sound typical? If not, can anyone recommend someone better?
2. Interest Rates: When evaluating property, is it typical to use current interest rates or is it more prudent to use an inflated interest rate? How does one minimize the risk against interest rate increases?
3. Insurance: What types of insurance do owners recommend acquiring? I have a friend from New Zealand who says that they buy rental default insurance. Is that possible in Canada?
4. Property Management: What would you typically look for in a property manager? What rates do they charge? We would like to get one Manager that we could rely on and use them over and over.
5. Joint Ventures: What terms are usually offered to persons who put up financing on JVs? How are these usually structured. We are looking at the 6-24 unit sized buildings.
6. Rent to Own: How does this structure work? We have been looking at a set of properties (3 6 plexs) and may approach the owner to buy 2 but want the option next year to purchase the 3rd. This is mostly do to available cash.
I know these are alot of questions. I am aware of all the tx considerations from my Accountant. Thanks in advance for any help or insites.
Regards
Bruce
