# Mortgage on Rental Property



## skoobyroo (Mar 2, 2011)

Hi all, I'm looking for some advice. I want to purchase a student property under a corporation and was wondering if i could get a loan for the property with no personal guarantee? If I could put up a 40% downpayment do you think they'll give my corp a loan? 

On a side note, the property I'm looking at is going for $375K with 18K net income (5% cap) but has an unfinished basement that could fetch me another $800 a month that could raise the cap to 7.5%. Do you guys think I should tie my capital up on such a sutdent property?


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## iherald (Apr 18, 2009)

skoobyroo said:


> Hi all, I'm looking for some advice. I want to purchase a student property under a corporation and was wondering if i could get a loan for the property with no personal guarantee? If I could put up a 40% downpayment do you think they'll give my corp a loan?
> 
> On a side note, the property I'm looking at is going for $375K with 18K net income (5% cap) but has an unfinished basement that could fetch me another $800 a month that could raise the cap to 7.5%. Do you guys think I should tie my capital up on such a sutdent property?


I doubt they will loan you the money without a personal guarantee.


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## Cal (Jun 17, 2009)

Same.

But they may, I would ask what downpayment would be necessary to help in your situation of not wanting to have to be the personal guarantor.

For a student rental, I would hoe that you live relatively close. Just to keep an eye on the place, and to do repairs.


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## marina628 (Dec 14, 2010)

We had discussions with our bank on this ,the corporation was in business 5 years and average bank balance of $300,000+ at all times.They wanted us to set up holding company to purchase real estate ,deposit 35% down and still had to personally guarantee it.The mortgages would not report on our personal credit though .


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## Mall Guy (Sep 14, 2011)

skoobyroo said:


> Hi all, I'm looking for some advice. I want to purchase a student property under a corporation and was wondering if i could get a loan for the property with no personal guarantee? If I could put up a 40% downpayment do you think they'll give my corp a loan?
> 
> On a side note, the property I'm looking at is going for $375K with 18K net income (5% cap) but has an unfinished basement that could fetch me another $800 a month that could raise the cap to 7.5%. Do you guys think I should tie my capital up on such a sutdent property?


For a new corporation with no other assets . . . not a chance . . . maybe back in 2007, but post sub-prime crash . . . not even in Canada!


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## Just a Guy (Mar 27, 2012)

skoobyroo said:


> On a side note, the property I'm looking at is going for $375K with 18K net income (5% cap) but has an unfinished basement that could fetch me another $800 a month that could raise the cap to 7.5%. Do you guys think I should tie my capital up on such a sutdent property?


I'd question the wisdom of such an investment, it seems to be a bit high to be safe, have you read the "Simple Solution to Canadian Real Estate Investing"? I've found being closer to $100k/door to be more prudent.


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