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Creative Solutions With Guardian Financing – Case Study

If there’s one thing no mortgage broker wants to see, it’s money left on the table. We are proud to share with you a recent complex file and our creative solution.

The Problem

Where there are problems, there are opportunities.

Let’s take a look at a challenging file. A local multi-plex owner with several vacancies requires important renovations to appease prospective tenants. Currently, money goes out regularly to pay monthly mortgage payments on a $340,000 mortgage, property taxes, insurance, repairs and maintenance. Not much revenue is coming in from only a few tenants left, who have started to withhold rent due to the various issues faced within the building.

The property owner, an elderly gentleman, is seeing red, has no cash to complete the necessary renovations, and has no capacity managing such renovation projects. In addition, the property owner is behind on property taxes, and has the city knocking on his door demanding him to fix the broken balconies and stairs, threatening with fines.

The whole situation appears like a flaming disaster, financial institutions and even other Private Mortgage Lenders have turned down the owner’s multiple attempts to acquire financing due to the hefty amount of risk involved. Most mortgage brokers would likely pickup this file, slice it up and use the cardboard to prepare season’s greeting’s cards. However, the seasoned mortgage broker would see this as a relevant occasion to turn to a savvy private mortgage lender like Guardian Financing.

The Solution

The first step is always due diligence and completing research on JLR, which is used to verify owner information, average household income in the surrounding area and the property Market Value. Following our research, we concluded that once all units were renovated and rented, the owner would be in a good position to refinance with a regular bank mortgage and pay off the private mortgage.

We offered the owner a $915,000 first private mortgage loan that enabled the owner to pay off his first mortgage, overdue taxes and a reserve fund for the necessary construction. Knowing that the property owner would not be able to afford additional monthly overhead due to the current cash flow issue, we also included the prepaid interest for one year.

As an additional service and to ensure that the project is executed property, we included project management of all the renovations and related activities, for a reasonable fee.

This scenario is a real life example of how a good mortgage broker can turn in a disaster file into a great opportunity! The owner wins, the mortgage broker wins, and Guardian Financing wins!

Get more wins for your clients and call Guardian Financing when facing a difficult file.

“Every problem is a gift. Without them we wouldn’t grow” – Tony Robbins

“Problems are nothing but wake-up calls for creativity” – Gerhard Gschwandtner

“We cannot solve our problems with the same thinking we used when we created them.” – Albert Einstein

 

Guardian Financing is a private mortgage lender. We serve the greater Montreal area providing short term residential and multifamily mortgage loans, typically ranging from $50,000 to $3,000,000. Contact us today to discuss your file at 514-700-3121 or by email at files@guardianfinancing.ca

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