Two business partners are acquiring a 12-unit multi-residential property in Toronto for real estate investment purposes.
The partners believe that there is an opportunity to increase rents, which are currently below market. An Equitable Bank commercial mortgage helps finance the acquisition of the property.
The CELOC opportunity
- The investors would like to renovate the units, and eventually upgrade the roofing and balconies.
- As their capital has gone into the acquisition of the property, a Commercial Equity Line of Credit can help finance their renovation plans.
- Tenant turnover will provide the opportunity to renovate the units, and as the rents from new tenants increase, so will the cash flow generated from the property.
- This surplus cash flow can be used to pay down the CELOC and reduce interest expense, as well as finance ongoing repairs and maintenance on the property.