Scaling Number Of Properties in Canada

[Brian Dean]

Hi, I’m new to the BP forums as I wanted to hear more specifically from Canadians but I’m a long time podcast listener. 

Two friends and I together own two small multi-family units (Triplex and Fourplex) in Windsor Ontario, but live in BC. So far we’ve had good cash flow, like our property manager and would like to keep adding properties. Currently the two properties are owned personally, rather than in a corporation. It seems like Americans have it easy in this regard but far less advantages to incorporating in Canada. We’ve heard that it’s difficult to have your names on more than five rental properties. Over time we want to build a large portfolio of properties.

So my question is, in Canada how do you keep adding properties beyond those first five? Even if we incorporate, they would want us to personally back it, so it wouldn’t be very different, right? Is our only option private lending? Is there a way to get past this hurdle?  Thanks!

[Chris Ferreira]

if you are planing on growing a real estate portfolio then you should look into incorporating, especially because you have partners. When you own properties inside a corporation you will need to co-sign the mortgage but it wont show up on your personal credit profile. Next, you need to find a commercial lender who can lend based on the assets and not your personal debt ratios. Desjardins commercial in montreal does this for me. I know they are in Ontario as well. Keep in mind that it will more expensive with commercial lending but it wont restrict on how properties you want to own.