Written by MASOUM JALILI
Broker, Commercial Financing 
OMJ Mortgage Capital

(license # 11288)

Multi residential mortgages  require some preparation. Of course when it comes to apartment building financing you need to start the process off by determining your net worth and experience that you’ve got in the necessary management. Starting with this kind of solid foundation is best jumping off point.

The down payment needs to be considered and you’ll need to name the source as required by law. Money laundering is a problem, so you’ll need to keep records of how you accumulated the cash that will get the ball rolling. Records of savings accounts or receipts from the sales of assets are all important here.

You might also be expected to have 25% of the total value of the loan in personal net worth on hand.  Remember you’ll also be asked to prove that you are in fact capable of managing the enterprise. A resume is what’s required here, and if you don’t have the necessary hands on experience, the financial institution that you’re dealing with might ask that you hire a property management company.

An inspection of the property is, of course, one of the other things that you’ll need to have done so that any prospective lender can see that it is in fact worth the value of the loan. This information needs to include property operating statements for the last several years as well as photographs and a Phase 1 environmental report. Remember that a CMHC insured mortgage will help you to get the maximum loan amount that’s available.

All the necessary reports need to be paid for by the borrower and once this phase has been seen too the commitment letter is the next step in the process. Make sure you get your lawyer to go over this important document. Once this is accepted, you’ll need to come with a holding fee for the lender.

You’ll have an investment schedule and it’s a good idea to have a broker that understands the importance of each of these steps and how best to get you the lowest rate so your frustration is kept to a minimum.