Success Stories

Canadian Investor Refinances 11 U.S. Properties in 30 Days

By Colin McMahon

February 19, 2024 6 min read

Canadian Investor Refinances 11 U.S. Properties in 30 Days

In Miami's vibrant real estate market, a seasoned Canadian investor found himself at a crossroads. Having acquired 11 condos valued at $5,500,000 with a high-interest hard money loan, he faced the steep costs of his decision. This type of loan, favored for its speed over traditional financing, left him searching for a more sustainable financial strategy.

Hard money loans, also referred to as bridge loans, often used in real estate for their quick approval times, come with higher interest rates and shorter repayment terms than traditional mortgages. They are a go-to for investors needing swift financing but can significantly impact long-term investment returns due to their cost. Our client, having committed to such a loan for his substantial $5,500,000 investment in Miami, found himself in a position where the financial strain was becoming all too apparent.

The challenge he faced was not just the high interest of the hard money loan but also the complexity of refinancing multiple properties held by a foreign national through a corporation. This scenario is particularly challenging due to the additional scrutiny and regulatory requirements involved in lending to corporations, especially those owned by non-residents of the United States. Moreover, not all of the condos were rented, adding another layer of complexity to securing traditional refinancing, as lenders typically look for steady income from properties to ensure loan repayment.

The turning point came when a mortgage broker, aware of our expertise in handling non-traditional buyers and complex financial situations, referred the investor to us. Understanding the unique challenges faced by our client—being a foreign national, owning properties under a corporation, and the urgency to refinance 11 properties simultaneously—we proposed a solution that would not only alleviate the financial burden but also streamline the entire refinancing process.

Our approach involved structuring 11 separate loans with a 55% Loan to Value (LTV) mortgage. These loans were designed as Foreign National DSCR (Debt Service Coverage Ratio) loans, a type of financing that evaluates the loan's safety based on the rental income generated by the property relative to its loan payments, rather than the borrower's personal income. This was particularly suited to our client's situation, where personal income documentation from a foreign country might complicate traditional loan approval processes.

Achieving this feat required meticulous planning and coordination, ensuring that all loans closed on the same day—a critical component in replacing the previous hard money blanket loans under one coherent and more financially sustainable strategy. The result was a triumphant closing of all 11 properties within the ambitious timeframe of 30 days, marking a significant achievement for both the client and our team at Milo.

This refinancing venture not only saved our client over 2.5% on his interest rate compared to the hard money loans but also translated into annual savings exceeding $75,000 in interest. Such financial relief has profound implications for an investor's portfolio, offering greater flexibility and the potential for further investment opportunities.

This story exemplifies the power of specialized financial solutions in overcoming the hurdles of international real estate investment. It underscores the importance of understanding not just the immediate financial implications but also the broader strategic benefits of such refinancing efforts. For investors navigating the complexities of the Miami real estate market or any global investment landscape, this case serves as a testament to the value of finding the right financial partners—partners capable of understanding and addressing the unique challenges faced by international and corporate investors.

At Milo, we pride ourselves on our ability to tailor our services to meet the diverse needs of our clients, ensuring that their investments continue to grow and thrive. For those facing similar challenges or seeking to explore the possibilities of real estate investment, we invite you to reach out to our team for guidance and support in your financial journey.

The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

Author

Loan Consultant Sales Team Lead

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