• Every once in a while as investors, we come across an amazing deal and usually that deal is a deal because it needs a lot of work – otherwise known as a “handyman special”.

    Then the question becomes what is the best way to financing this opportunity and which lenders will consider the “after repair” value and not the “as is” value.  Currently there are very few options that exist to renovate properties using the “after repair” value.

    Options using the “as is” value literally suck!  You can do a purchase plus mortgage, where the lender will give up to 10% or $40,000 max. of the “as is” value for renovations and after all is said and done, you get to include that cost into the mortgage. However the caveat is that you must have those funds in your pocket to begin with. Another way might be to take it out of your existing HELOC or unsecured LOC, but then you are worried about timelines, paying it back, over-extending your lines of credit and worse if another opportunity comes along you have now tied up that money into the current property, waiting to flip it!

    Furthermore, how far is 10% of the value going to get you? Not very far in most cases! The rest comes from your own pocket and if you are like me there are typically other uses for that money.

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    Up until now, there was nothing in the marketplace that would convince a flipper or even somebody looking to renovate their commercial property to take a purchase plus mortgage. Too many restrictions, including limited funds, restrictive timelines and the steps one must go through to access this financing is rigorous.

    As a residential and commercial mortgage broker, I am happy to offer the “Property Renovation Fund”, offered exclusively through The Financing Hub, Canada’s first Commercial Financing Hub. The Property Renovation Fund is now offering a terrific way for investors to renovate their properties without having to break their mortgages to do so and allows an investor to obtain the necessary financing to do the renovations, using the “after-repair” value!

    As mentioned above, presently in the market there are not that many great options when it comes to renovations so with that in mind, we are happy to create this financing option that is available to both residential and commercial property investors.

    In this post, I will concentrate solely on the option available to Residential Properties that an investor will buy, renovate and then flip!

    Below are the criteria for acceptance as well as an example for how the program can work in real life.

    Let’s go through them.

    Acceptable properties 

    • Single family rentals carrying an existing property value of at least $150,000, where the property has been purchased solely for the purpose of renovation and then re-sale (flipping).  For Buy & Hold properties we have other financing programs available!


    • Urban setting with a population of 65,000 or more


    • Fixed terms of 3 months, 6 months, 9 months or 12 months (completely open)


    • Target properties can have first mortgages but outstanding principal balance
      • cannot exceed 70% LTV on the current pre-reno appraised value
    • The aggregate first mortgage plus renovation loan cannot exceed 80% LTV of the estimated post – renovation property value
    • Applications for combined borrowings of up to 85% may be considered on a
      • case by case basis but only at the sole discretion of the lender

    Second Mortgage Rules

    • No 2nd mortgages ahead of the renovation loan will be allowed.  However where one does exist, the lender on a case by case basis may provide enough funds to pay out the 1st and 2nd and fund the planned renovations

    Loan Size

    • Min $50,000 with no maximum
    • The amount of the renovation costs are calculated on the “As Is” Value x 40%


    • Loans are interest only and completely open with no penalty for early
    • repayment

    Interest Rates

    • 5% – 10% depending on project type, location and risk

    Lender & Broker Fees

    • 1-3% depending on project

    Now, let’s look at the example below.

    An investor, who flips properties in the Hamilton – Burlington area, recently approached us. His last reno deal did not deliver the money he was hoping, due to the way the deal was structured. He had a 1st and 2nd with Home Trust but still needed to do renovations. To get the needed renovation funding he took out a 3rd mortgage on a promissory note, with the goal of renovating and flipping the property in 6 months.

    Well to make a long story short, he was unable to finish on time, had to extend the 3rd mortgage another 3 months and at the end of it all, when he sold, he had a massive shortfall due to the costs associated with the financing he had to put together for the property.

    With the next property he has purchased, he has purchased a SF home but will turn it into a triplex. He is choosing a 9 month term to give himself the buffer he needs to ensure the project gets finished within the set timeline.. As this is a huge renovation, he knows the value will be in the “post renovation” value and not the “as is” value, so he needed financing that could adjust for that.

    Purchase price is $210,00 however by making this into a legal triplex, the post renovation value jumps to $400,000, which means, under this new Property Renovation Fund program, he now can access 40% of the post-reno value to complete his renovations.

    He is currently in the midst of his reno’s and is slated to finish on time or perhaps even a little ahead of time. Under the program there will be no penalty for early repayment, so he keeps that money he saved in his pocket and not the lenders.

    Reno Illustration copyAre you a flipper and want to maximize your renovation dollars? Tired of using your own money to renovate your flips or seeking a JV partner, which then causes you to split the profits 50/50? Keep the money in your pocket by using our “Property Renovation Fund” and renovate your properties using the “After Repair” Value!

    This renovation financing is exclusive through the Financing Hub and can be accessed by going to my link at:


    To learn more about what The Financing Hub offers,

    please visit: http://thefinancinghub.com