It’s not uncommon for United States residents to own second homes in Muskoka – or other parts of Canada. The trick, though, is leveraging a U.S. income source to fund the financing needed to buy, build or renovate a property north of the border. Banking regulations mean that even Canadian citizens living abroad can find it nearly impossible, particularly for construction loans.
This was the case with one of Donaldson Capital’s valued clients: a Canadian citizen who is a US resident living in New York City and was building a cottage on Lake Joseph. Midway through construction he needed a loan to complete the project. But Canadian banks would not accept his U.S. income.
“A private investor was the perfect solution in this case,” says Donaldson Capital mortgage broker Drew Donaldson. “We issued a $2.5 million construction loan through one of our investors, which was enough to get the project done.”
Construction financing plans always include a vital exit strategy. Once the build is finished, Drew and team can help to refinance through an institutional lender at the best possible rates. Or the client can pay out the construction loan and own the cottage mortgage free.
“This client was expecting a few large private equity investments to pay out soon, which they could then use to pay out the construction facility,” explains Drew.
As is the case with many of the firm’s high-net-worth clients, the strategies needed to navigate construction loans and other unconventional mortgages are designed to provide ample liquidity during specific – often very short – timeframes.
“Our clients use their mortgage as a tool to accomplish their goals in life,” says Drew. “We get creative with the strategy and advice. I’d say after working with so many high-net-worth individuals we understand them better than anyone else in the marketplace.”
One of their valued clients, Will, says he always recommends the Donaldson Capital team for these vital financial matters.
“Their insight and guidance were invaluable throughout the entire process,” he says. “They took the time to understand my situation and provided tailored solutions that exceeded my expectations. I give my highest endorsement and praise to the DC team.”
This service level and expertise is a testament to their team’s commitment and consistency, says Drew.
“The Donaldson Difference, which separates us from any other mortgage company in the industry, is encompassed and built upon by our four core strengths: key relationships with lenders, market experience in Toronto and Muskoka, our own personal experience, and our devoted team.”
TEXT CHRIS OCCHIUZZI
PHOTOS SCOTT TURNBULL
