Creative financing for Canadian residential properties

[Eric Chang]

I have a small portfolio of residential rental SFRs. As fellow Canadians, we all know the challenge to get bank financing beyond 3-5 properties. I've done some creative financing structures such as partnerships, seller financing, etc. so far.

I recently came across on the BP podcast that in the US, some banks would allow bundling a portfolio of residential SFRs into a commercial loan. I spoke with a commercial mortgage broker and he said he isn't aware of any lenders doing that in Alberta. He did say if I can bundle a portfolio to around 5mil range, he might be able to do something.

I'm curious if the experienced Canadian investors here have any suggestions other than using private lenders?

Appreciate your insights.

[Roy Cleeves]

Hi Eric

I recently did exactly what you are talking about.  I have a portfolio of Single Family homes worth around $5M and I bought a 5 plex which is commercial and because of that purchase they were willing to give me commercial financing on that purchase as well as on a condo that is just a single family.  I would be happy to share the discussion paper on it so that you can see the full structure.  I did promise them that I would bring my other homes into commercial financing with them when they come up for renewal.  That way I don't have any extra fees for moving them before renewal and they will refi up to 80% for me on these homes that probably have a 60% equity position now.  Whereas the bank with the residential mortgage would only do a renewal and no refi.  So I am happy to pay commercial rates and access more cash for more purchases.