Quote from @Allan C.: You both make good points, but like everything else the points are not absolute.

Quote from @Evan C.: Maybe someone can educate me on the actual uses and mechanics of using a substitution of collateral clause (aka substitution of security) in a loan when you are the borrower.

.- My advice; however, is to work with a good mortgage broker as they often have access to more lenders (B or C lenders) that might be more flexible than the 5 big banks.- Finally where to buy: in general, ON, BC are expensive while AB, QC follows and other provinces, such NB, NS, PEI are much much more affordable.

.- I've read about A, B, C, and D class properties. 

Now we're seeing investors pouring money into buying Class C rentals - but, many are getting burned.In our experience & opinion, the main determinant of property Class is not location or even property condition, those are #2 and #3.

The City of Detroit is block-by-block in many Class B & C areas.In our opinion, zip codes cover too large an area.We use Detroit Neighborhoods, which are much smaller than zip codes.

I've settled on wanting to do Commercial Real Estate Multifamily 20+ units, Class B, C in Texas or California. 

Regardless, you might find the copy & paste info below helpful:)--------------------------------------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

., if this was a 506(c) offering, and the sponsor did not make "reasonable efforts" to confirm all investors are accredited, than that is a direct violation of rule 506(c) from the SEC.If this was a 506(b) offering, there needs to be an existing relationship with all investors before any investment opportunities are shared.  

I would say maybe Class C if I could label it such.