BRRRR in Canada - how to refinance without proof of income?

[Jennifer T.]

Hi everyone,

I have successfully BRRRR'd in the US and now have found some opportunities in Canada.

Since I have no employment income, and very little investment income (as I have just started the BRRRR process), I relied on hard money lenders to purchase, and then DSCR/asset-based/no-doc lenders to refinance. This was very easy to do in US as there were an abundant of options.

However it doesn't seem to be this easy in Canada. I have reached out to mortgage brokers that work with investors, and was told that there are only short-term bridge loans available (for 6 months - a year). There are no private/alternative lending options available for a longer term-loan (like 10-30 years). 

I can get past the first stage and find the cash for purchase and rehab, but since the BRRRR strategy relies heavily on refinance to get the money back out, how can I do this in Canada without a conventional mortgage?

I would very much appreciate any sharing of ideas or experiences! 

Thank you in advance. 

[Hadi Hussaen]

@Jennifer T., fellow Canadian here.

It's a double edged sword - the strict financing policies in Canada make it much tougher to scale but are also what make our market more resilient/stable than others. 

If you don't want to partner with anyone: The key to scaling and securing conventional financing with low personal income, is to purchase properties with a MINIMUM of 5-units. This put's you in the "commercial lending" niche - the lender will now only consider the Net Operating Income of the property to determine your conventional mortgage.  Absolute game changer when it comes to scaling in Canada. 

Hope that helps, happy to chat anytime. 

Cheers, Hadi 

416-875-0735