Conventional or commercial mortgage for RTO`s?

[hanwellboy]

If you do one RTO every other year or so, I can see getting a conventional mortgage. But what if you did want to make your real estate investing a career and started doing multiple RTO`s? Would you still be able to get conventional mortgage financing, or would the banks insist you take a commercial mortgage? In my opinion, a conventional 25year mortgage on a RTO is the way to go. It keeps your, and your TB`s monthly payments low, and you can get one with very little down.
Any opinions?

Aaron

 

[kboughen]

QUOTE (hanwellboy @ Sep 25 2009, 08:48 AM) If you do one RTO every other year or so, I can see getting a conventional mortgage.
When you say "conventional" I believe you mean "residential". Many RTO investors use 10% down, 35 year amortization, CMHC small rental program residential mortgages to fund RTO properties. This maximizes the use of capital while keeping monthly payments low; however, you need to make sure your ratios, DCR and other critical components are inline. The key is to make sure you are financing your properties in a way that will allow you to continue purchasing.

A Mortgage Broker with a successful track record in funding multiple investment property purchases for investors will be an essential part of your Team.

 

[GaryMcGowan]

QUOTE (kboughen @ Sep 25 2009, 09:24 AM) When you say "conventional" I believe you mean "residential". Many RTO investors use 10% down, 35 year amortization, CMHC small rental program residential mortgages to fund RTO properties. This maximizes the use of capital while keeping monthly payments low; however, you need to make sure your ratios, DCR and other critical components are inline. The key is to make sure you are financing your properties in a way that will allow you to continue purchasing.

A Mortgage Broker with a successful track record in funding multiple investment property purchases for investors will be an essential part of your Team.

As Ken said start with an experienced broker FIRST.

On our RTOs we have CMHC 90% LTV 35 yr am and 80% 35 yr am. The term of the mortgage will match the term of the RTO. The LTV depends on how much we want to put down on the property.

 

[markl]

Hey Gary that was Kevin not Ken.

And Kevin works with a number of our investors. As stated the most popular product among our investors is 90% LTV insured by CMHC. We have had some go as high as 95% as well. If you are going conventional therefore not insured products we like the Scotia step program interest only LOC or Street capital.

These are all residential mortgages therefore you do not have to pay a premium in interest rates or fees.

Regards,

 

[hanwellboy]

QUOTE (markl @ Sep 25 2009, 12:06 PM) Hey Gary that was Kevin not Ken.

And Kevin works with a number of our investors. As stated the most popular product among our investors is 90% LTV insured by CMHC. We have had some go as high as 95% as well. If you are going conventional therefore not insured products we like the Scotia step program interest only LOC or Street capital.

These are all residential mortgages therefore you do not have to pay a premium in interest rates or fees.

Regards,

So the Scotial step LOC would allow me to pay interest only for the term of the loan? And there is no CMHC fee? Wow, that would definitely improve the monthly cashflow.