Using your property’s equity as down payment

Exciting news for real estate investors ! Keystone Capital can help in maximizing investment potential. Let's walk through an example:
 
Your Business-for-self client is eyeing a new rental property in Charlottetown selling for $500,000. They have $150,000 available and hoped to put $100,000 (20%) towards a down payment and use $50,000 for renovations. Tranditional lenders and banks may not consider 80% Loan To Value. However, you own another rental property on Prince Edward Island valued at $450,000, with a first mortgage balance of $250,000.
 
There is a great way to leverage private funds to minimize down payment requirements. By securing the existing rental property in the second position, Keystone can unlock an additional $50,000 in equity. This not only strengthens the client's financial position but also decreases the blended loan-to-value to under 70%. Here is the breakdown:
 

  Value / Purchase Price 1st Mortgage Balance LTV

Owned Rental $450,000 $250,000 56%

Newly purchased rental $500,000 $400,000 80%

Total $950,000 $650,000 68%

Purchase Price $500,000

Keystone Loan $400,000

Downpayment $100,000

 
With this creative solution, your client can use remaining funds towards renovation costs or to fund another project, optimizing returns and expanding their real estate portfolio. We can even offer 100% financing on purchases if there is sufficient equity in the additional property(s) across Atlantic Canada.
 
Connect with us today to see how we can help your client’s investment strategy!