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CMB MAGAZINE cmba-achc.ca spring 2016 | 39
constructionlending
35-unit residential condominium. Although
80 per cent of the project was sold, the bank's
requirements and demands were too
onerous. An $11.6-million first mortgage
was provided to take out the existing
financing plus cover the construction costs
to complete the project.
Takeaway: Alternative financing really
is a viable option when lending requirements
translate into major delays and administrative
headaches.
small & simPle: e developer had
the option of expanding an existing three-
storey, six-unit residential condominium
building by adding a seventh-floor penthouse
unit on top of the building. e 1,886 sq. .
penthouse with 568 sq. . terrace and private
elevator would be sold on completion. Due
to the complexity of the project (including
several years of approvals) and the small size
of the loan in the eyes of institutional lenders,
a $975,000 first mortgage was provided
through alternative lending.
Takeaway: Look for opportunities instead
of obstacles. anks to a simple underwriting
process, construction advances were provided
to help the project move forward quickly.
need FoR sPeed: e developer
purchased a semi-detached home on a
25.5 x 123 . lot, obtaining approvals to build an
addition and renovate the property into a two-
unit, three-storey, 3,850 sq. . condominium
building. In order to maximize return on
investment, the developer wanted to finish
the project as soon as possible. e mortgage
broker went with an alternative lender in
order to avoid costly delays with initial funds
and construction advances. A $1.78-million
first mortgage was provided to discharge the
existing mortgage, cover the hard construction
costs, so costs and provide funds for interest.
Takeaway: A quick approval process for
financing can get your builder to the finish
line faster.
If you want to really shine in this
marketspace, you owe it to yourself to get
to know the market in terms of what's viable
and what's not. At the same time, you should
cultivate relationships with builders (or
construction companies) and lenders that share
the same "half-full" mindset for these types
of projects.
Through alternative lending, the devel-
oper was able to secure funding quickly
and maximize profits when building an
addition on this semi-detached property.
