Begin with the property and the purchase agreement
Before relying on a financing plan, review the building’s unit count, legal use, occupancy, purchase conditions and closing date. A small multiplex may be considered differently from a larger apartment building. A financing consultation is not a commitment from a lender.
- Purchase price, financing condition and proposed closing date
- Legal residential units, any commercial space and ownership structure
- Available equity, its source and your investment objectives
Build an income picture the lender can verify
The seller’s asking price and projected rents are only a starting point. Lenders assess actual rental income and realistic operating costs. A current rent roll supported by leases and financial records helps distinguish dependable income from assumptions.
- Current rent roll, leases, occupancy and rent arrears
- Operating statements, property taxes, insurance and utilities
- Maintenance history, planned capital work and management expenses
Compare the appropriate financing pathways
Conventional commercial and CMHC-insured multi-unit financing have different eligibility and documentation requirements. For 2 to 4 units, residential or small-rental lending may be relevant. The choice should fit the property, your timing and the ongoing responsibilities, not a headline promise.
Underwriting, reports and conditional terms
The lender reviews debt coverage, valuation, borrower credit and financial strength. It may request an appraisal, environmental assessment, building-condition report or other evidence. A conditional term sheet is not the same as final approval or permission to remove purchase conditions.
Satisfy conditions before closing
Accepted terms are followed by lender instructions, legal work and completion of funding conditions. Your lawyer coordinates registration and closing with the lender. Confirm what remains outstanding before relying on funds being available.
- Review fees, security, guarantees, covenants and prepayment provisions
- Confirm insurance and required reports meet lender requirements
- Coordinate your equity contribution and closing documents with your lawyer