Canadian Flip Financing

[Jeremy Johnson]

Hey guys first time posting! Looking to start flipping full time in Canada. Red Deer, AB to be exact. A city of about 120k ppl right in the middle between Calgary and Edmonton. My dad was a builder back in the day and I am handy on the tools. Being able to carry out the framing, hanging board, general finishing, etc. This saving $$$ I Have done 2 deals so far using the principal residence exemption. Lived in the houses for over a year. Net profit on house #1. 62k. House #2 76k. Used that $138k for a down payment on our current forever home. The problem/question I have is for any Canadian flippers out there is where do you get your capital to expand? How can you finance bigger deals? If you run it as a full on business as in set up a corporation etc. Present a business plan as a builder will the major banks give you a loan or L.O.C? For example the deal I want to do now I can get the place for 270k. But it requires 170k in renovations. Unbelievable location backing a forest that elderly owners have let go-that I have a in with. Could 100% sell for 600k plus. I can get hard money at 15% for the purchase at $270. But where can I fing the financing for the renovations? Sorry for the long post! Looking forward to any insight I can get! Thanks

[Brianne H.]

@Jeremy Johnson welcome! Not sure I'm much help for hard money since I've never used it myself,but I do have a few tips on getting the most unsecured credit you can with banks. 170k might be a little bit of a stretch but it may be doable. 

Make an appointment to set up an unsecured line of credit at multiple different banks and credit unions. Do this all in the same week. At every appt (and it sounds like you have a wife or partner - joint applications always look better to get more cash if they also have an income and good credit and they're willing to get on board), bring your pay stubs/letter of employment/tax summary if self-employed to do the application right away. They'll check your credit, but because you are doing all the applications the same week, it only reports as one hit to the credit bureau because they assume you're rate shopping (or so I'm told). Also when they check your credit, any newly approved lines of credit aren't going to show up on your credit report, so your debt to income ratios aren't going to be thrown off. Ask for as much as they'll give you, tell them it's for home renovations (technically true, but do not call it a business) and hopefully the money availability should start rolling in. If you've got decent credit, Scotia will grant up to 25k without asking too many questions, anything more than that and it's a more in depth application. My husband and I did this and it ended up funding the last project we did - buying vacant land, moving an older 60's bungalow onto a new foundation, renoing it, etc. Between the 2 of us, we were able to get 62k from TD, 66k from Scotia, 20k at ATB, 30k at RBC, and if you also combine our credit cards as well, that was 53k... so all together, up to 231k in unsecured credit (at various interest rates... my LOCs are between 5.5% - 9% at the moment, with Scotia being the best rates.) Good luck!