THE BM SELECT
INVESTOR EDGE
Build
up
Construction and renovation financing re-imagined:
Build more units, increase cashflow and watch your
portfolio grow.
Click here! to download the Investor Edge Toolkit.
Construction & renovation financing reimagined
What if you could unlock the hidden potential of a property — not based on what it’s worth today, but on what it could become?
With interest rates up and cashflow down, more and more investors are stuck with properties that are hurting their finances as opposed to helping. Whether you’re living in the home or holding it as a rental, the math isn’t adding up. That’s where Build Up comes in.
A program that helps you finance the creation of new units — basement suites, laneway homes, full rebuilds — so you can increase rental income, offset rising mortgage payments, and finally get your portfolio growing again.
We know how it goes….
You mapped it out. You ran the numbers. You brought it to your bank or a mortgage broker…
And they shut you down. Because they don’t finance potential — they finance the past.
And when they do offer something, it’s overcomplicated, and out of reach and at higher interest rates
Build Up flips the script:
We say yes. And we do it at big-bank rates — without the big-bank BS.
Key points:
- The mortgage is based on the as-complete future value of the property
- Completed renovation/build cannot exceed 4 units in total
- All units must be fully residential
- Interest-only payments while construction is being done
- Financing for owner occupied, second homes, and rental properties
- No maximum renovation amount
- Can be used for as little as simple renovations or as much as complete demo and re-build
- Borrower must have a minimum of 15% of the renovation funds on hand (can be from borrowed funds, personal funds, gift, etc.)
- Allowed on both purchases and refinances
- Qualification is based on total mortgage amount owing at the end of the project
Real examples ... How it works
Example #1: Jamie and Chris wanted to create a rental unit
Jamie and Chris currently live in their $625,000 single family home. Their existing mortgage is $440,000. They would like to add a rental unit to their home to help them pay the mortgage and get financially ahead. The cost to build the extra unit would be $300,000 and generate them $2,300 per month in rental income.
With the building plans in hand, an AS-COMPLETE appraisal was performed and it was determined the future value of the home, with the extra unit, would be $925,000. Using our ‘Build Up’ program we approved the clients for a total mortgage of $740,000 (80% of future value). The clients then received the first $440,000 which allowed them to payout their existing mortgage.
Then it was time to start the build. The first $45,000 to start the project came from Jamie and Chris (15% of build cost as per program rule), but once that was used up, it was time for the construction draws – which the borrowers received until the work was completed.
As soon as the renovations were complete, the borrowers’ mortgage transitioned from an interest-only mortgage to a normal amortized mortgage, at bank interest rates.
Let’s break down the numbers:
Initial Loan – $440,000 = $2,233/month (interest only)
Draw 1 – $75,000 = $381/month (interest only)
Draw 2 – $75,000 = $381/month (interest only)
Draw 3 – $75,000 = $381/month (interest only)
Draw 4 – $75,000 = $381/month (interest only)
Once the work on the home is fully completed, the mortgage gets automatically converted into:
- $740,000 total mortgage amount
- 5-year fixed rate at 4.19% = $3,969 per month
- 30-year amortization
Pre-renovation
Post-renovation
This is a monthly savings of $1,014.00
Example #2: Boris and Ingrid wanted to add a garden suite
Boris and Ingrid are purchasing an investment home for $500,000. They have a 20% down payment ($100,000) and want to also add a garden suite to the property. The cost to build is $250,000. We ran their application and then got them an as-complete appraisal of $812,500. Based on this, they were approved for a total mortgage of $650,000 (80% of future value).
On the closing date of their new home, Boris and Ingrid received $400,000 (80% of the home price) they needed to close on their purchase. It was time to start the construction, the clients used their own $37,500.00 (15% of the project cost), to get the construction started.
Once this was used it was time for the construction draws – which the borrowers kept receiving until the work was completed.
As soon as the renovations were complete, the borrowers’ mortgage transitioned from an interest-only mortgage to a normal amortized mortgage at bank interest rates.
Let’s break down the numbers:
Initial Loan – $400,000 = $2,030/month (interest only)
Draw 1 – $62,500 = $317/month (interest only)
Draw 2 – $62,500 = $317/month (interest only)
Draw 3 – $62,500 = $317/month (interest only)
Draw 4 – $62,500 = $317/month (interest only)
Once the work on the home is fully completed, the mortgage was automatically converted into:
- $650,000 total mortgage amount
- 5-year fixed rate at 4.39% = $3,236 per month
- 30-year amortization
Pre-renovation
Post-renovation
Disclaimers
- The initial INTEREST ONLY payment portion during the construction period is based on a 6-month interest rate term at time of application.
- Interest rates provided are subject to change and are for illustration only.
- Clients must meet the qualification requirements.
- All appraisals must be conducted by approved, accredited appraisers.
- programs and eligibility criteria are subject to change without notice.
- Construction draws are completed and funded based on a percentage-complete basis and are contingent on satisfactory progress inspections.
- It is strongly recommended that the borrower have additional funds available further to the required 15% to ensure that all draw completion percentages are met.
- Clients are required to have sufficient equity or down payment to meet loan-to-value (LTV) limits.
- This program may be subject to restricted loan-to-value based on loan size and location of property.
- All figures, costs, and cash flow projections are estimates and may vary depending on market conditions.
- Renovation timelines and draw schedules must adhere to the conditions specified in the approval process.
- Better Mortgage Select Ltd. is not responsible for delays, declines, or policy changes that may occur.
- Approval may be subject to a brokerage fee.
- You may be required to send in additional documentation at any part during the mortgage process up until the final closing.
