Client Information
Name: John Doe
Location: Montreal, Quebec
Portfolio Value: $5,000,000
Total Considered Equity (based on a 65% LTV for each property): $3,250,000
Current Existing Financing: $2,350,000
Total Available Equity: $900,000
Investment Strategy
- Using Our Pre-Approval Letter:John used our pre-approval letter to assess the available equity in his current portfolio. This provided him with a clear budget for his next investment.Using his pre-approved $2,500,000 proof of financing, he started shopping.
- Identifying New Opportunities:With the budget in mind and his proof of financing in hand, John identified a promising multi-family building in a high-growth area.
- Securing 100% Financing:John decided to finance the building entirely and perform renovations. To achieve this, we financed 100% of his purchase using the purchase equity of 70%, paired with $650,000 from his refinance budget. Finally, he got a construction loan by using the remaining $250,000 in available equity to make key renovations.
Financial Details and Calculations
Pre-Approved Budget: $2,500,000
Purchase Price: $2,150,000
1st Rank Mortgage: $1,500,000 (70% LTV on the purchased property)
2nd Rank Mortgage: $900,000 (across other properties)
Renovation Funds: $250,000 (progressive disbursements)
Outcome
Congratulations! John successfully acquired the multi-family building with 100% financing. The financing structure included a 1st rank mortgage of $1.5 million (70% LTV) on the purchased property and a 2nd rank mortgage of $900,000 across his other properties. Of this, $650,000 covered the remaining purchase cost, and $250,000 was disbursed progressively for renovations.
Nine months later, John’s $2.15 million building increased its cap rate from 4.5 to 7 due to strategic improvements and filling vacancies. This resulted in a significant boost in property value and rental income, showcasing the effectiveness of expertly tailoring financing solutions.
