Ralhan Capital

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Debt
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Debt financing plays a crucial role in the investment landscape and is an essential tool for investors. Debt financing allows investors to leverage their capital, diversify their investment portfolio without committing all their available funds to a single project or asset, seize time-sensitive investment opportunities quickly, preserve their equity stake in a project, can provide tax advantages, cash flow management, asset appreciation, fuel growth and expansion, and act as a hedge against inflation as the debt burden becomes less onerous in real terms as prices rise. Proper risk assessment and due diligence are essential when considering debt financing as part of an investment strategy.
Debt financing plays a crucial role in the investment landscape and is an essential tool for investors. Debt financing allows investors to leverage their capital, diversify their investment portfolio without committing all their available funds to a single project or asset, seize time-sensitive investment opportunities quickly, preserve their equity stake in a project, can provide tax advantages, cash flow management, asset appreciation, fuel growth and expansion, and act as a hedge against inflation as the debt burden becomes less onerous in real terms as prices rise. Proper risk assessment and due diligence are essential when considering debt financing as part of an investment strategy.
  • Construction loans (up to 85% of cost)

Construction loans are specialized financing solutions designed to support the development of new residential or commercial properties. These loans provide developers and builders with the necessary funds to cover the costs of construction, including labor, materials, and permits. Typically, construction loans disburse funds in stages, known as “draws,” as the project reaches specific milestones. As construction progresses, borrowers can access additional funds to keep the project moving forward. Once the construction is complete, borrowers can choose to either pay off the loan in full or convert it into a traditional mortgage. Construction loans offer flexibility, making them an essential tool for turning blueprints into reality.

  • Land Loans (Short-term: up to 75%; Long-term: up to 65%)
Land loans are financial products that provide financing specifically for the purchase of vacant land or undeveloped property. These loans are ideal for investors, developers, or individuals looking to secure a piece of land for future development or investment purposes. Land loans may have different terms and conditions compared to traditional mortgages, as they are specifically tailored to accommodate the unique risks associated with undeveloped land. Once the land is developed, borrowers can choose to refinance the loan or obtain additional financing for construction.
  • Bridge Financing

Bridge financing serves as a short-term financing solution that “bridges” the gap between the purchase of a new property and the sale of an existing one. This type of loan is particularly helpful for individuals or businesses who need immediate funds to secure a new property while they await the proceeds from the sale of their current property. Bridge loans offer quick access to capital, allowing borrowers to act swiftly in competitive real estate markets. They are typically repaid once the sale of the existing property is finalized. Bridge financing offers flexibility and can be a strategic financial tool to seize valuable opportunities in the real estate market.

  • Conventional Term

Conventional term loans are a common form of debt financing offered by traditional lenders, such as banks and credit unions. In this type of loan, borrowers receive a fixed amount of funds, which is then repaid over a set period, typically ranging from 5 to 30 years. Conventional term loans may come with either fixed or variable interest rates, depending on the borrower’s preference. These loans are versatile and can be used for various residential and commercial properties. Conventional term loans provide stability and predictability, making them a popular choice for borrowers seeking straightforward and reliable mortgage options.

  • CMHC Insured Term & Construction
CMHC insured loans are mortgage loans that have been insured by the Canada Mortgage and Housing Corporation (CMHC), a government agency. CMHC insurance protects lenders in case of borrower default, allowing lenders to offer more favorable terms and interest rates. CMHC insured term loans are typically for the purchase of residential properties, while CMHC insured construction loans are for financing new residential developments. These insured loans often require a smaller down payment compared to conventional loans, making them more accessible to first-time homebuyers or developers.