New to Real Estate · Montreal, Canada · Member since 2020 · 7 posts · 1 vote
Looking to purchase a multifamily home (2 to 4 units) in Montreal, Canada to househack. My parents own a small business and they would like to invest with me, can a business co-sign the mortgage and be co-owner with an individual?
Also, would we be allowed to purchase the home with less than 20% down? (since it would be owner occupied).
One way I see it, we could set up and LLC and the business and myself would have a stake in it, but I feel like this is overkill with just one small property and would probably eat a lot of the cashflows (from an already tight market) from the related expenses.
Hello @Alberto Foglietta, instead of putting down the whole down payment you are also able to use an other house as collateral, this will sometimes allow you to pay less down payment. It all depends on how big of a collateral you are able to put up and the one offering the collateral will have to be on the mortgage. I am not sure how this works if you want to co-sign with a business.
Hello @Alberto Foglietta, instead of putting down the whole down payment you are also able to use an other house as collateral, this will sometimes allow you to pay less down payment. It all depends on how big of a collateral you are able to put up and the one offering the collateral will have to be on the mortgage. I am not sure how this works if you want to co-sign with a business.
I don't know all of the specifics for Canada, but you could do what you propose in your personal names, but not an LLC. Mainly because a brand new LLC has no assets, no payment history, etc. It would be the equivalent of a bank letting an unemployed 12 year old buy an investment property, financially speaking.
You could buy it together and then quit claim it to an LLC, but there are risks to that strategy as well- endless threads here on the forum about that, so I won't belabor the point.
If you do buy it as individuals, there are loan products that would allow you to pay less than 20% down, but you'd also have to pay PMI, which can eat any cashflow out of the deal, BUT, if you are in an appreciating market, you may be able to eliminate PMI fairly quickly and it can be a means to an end.
Accoring to Ratehub (https://www.ratehub.ca/investment-property) for a 3-4 unit owner occupied property the max LTV is 90% (so 10% down payment) which means I could still qualify for the CMHC.
Originally posted by @Account Closed:
Hey @Alberto Foglietta,
Pretty sure that you have to have it under your name in order to get a first time home buyer loan and a lower DDP. (not certain)
Also, LLC is US specific. If I remember correctly you're investing from Montreal.