I would highly recommend doing a renovation loan like the 203k or homestyle - you are able to leverage SO MUCH CASH for such a low down payment. 

Any laws against repaying the loan in stocks instead of actual cash?

Meet with financial advisers/wealth managers and see what other options other than real estate there are and how to best allocate / diversify. ie have you maxed out your TFSA?

So that she can get a loan for another home after she sells the house to you?

Look at me taking charge of my financial future!

To summerize, a DSCR loan, aka lite doc or business purpose loan, uses the rents you receive on the property and divided by the new loan PITI to receive a ratio.

@Richa Wardhan every investor has to find their own answer to your basic question - focus on portfolio growth or paying off what you have.Portfolio Growth leverages your money using loans and tenants paying off these loans.

And the "hook" is that it's paying 12%+ interest distribution plus depending amount LOANED (one may say invested in a note but again, if a note is a loan, it's not investing is it, it's a loan, a loan is a loan is a loan). 

If you believe you will be financially ready to build a year from now, perhaps you enter into a lengthier contract where you can obtain all of your building approvals and then settle at a later date.

Often times, their approval processes are slow.Credit Unions - Their member structure also subsidizes their financial structure so they can also be a source of low-cost financing.