Friday, November 15, 2024
Real estate investing has always been a path to building wealth, but for many, larger investment properties seemed out of reach. What if acquiring these high-value properties was more accessible than ever? Thanks to CMHC’s MLI Select program, buying larger, multi-unit properties is no longer reserved for seasoned investors. Here’s what you need to know about this game-changing initiative and how it can open opportunities for you.
What Is the MLI Select Program?
CMHC’s MLI Select program is designed to encourage the creation and retention of affordable, accessible, and energy-efficient housing. It offers investors significant incentives, including:
– Down payments as low as 5%
– Amortization periods of up to 50 years
– Reduced interest rates compared to traditional commercial loans
These benefits make it possible to acquire properties that were previously considered out of reach, especially for newer investors or those looking to scale their portfolio.
How Does It Work?
The program uses a point system to determine eligibility and the level of benefits an investor can access. Points are awarded for meeting criteria in three key areas:
- Affordability: A percentage of the property’s units must be offered at rents that are affordable based on CMHC’s guidelines.
- Accessibility: Properties that include accessible features, such as wheelchair ramps or elevators, earn additional points.
- Efficiency: Energy-efficient buildings or upgrades can contribute significantly to your point total.
The more points your property qualifies for, the greater the benefits you’ll receive—whether it’s a lower down payment, extended amortization, or reduced interest rates.
Why Larger Properties Make Sense
Traditionally, larger properties required significant capital and came with complex financing structures. The MLI Select program flips the script, making these properties more attainable. For example, with just $100,000, you might only be able to buy a $500,000 duplex. But under MLI Select, that same $100,000 could help you secure a $2 million property with 5% down. The ability to scale your investment amplifies your potential for long-term wealth.
The Win-Win-Win of MLI Select
One of the standout features of this program is how it benefits all parties involved:
– Government: By incentivizing private investors, the government can increase the stock of affordable housing without directly managing it.
– Tenants: Affordable and energy-efficient housing reduces living costs for tenants.
– Investors: Lower financing costs and better terms allow investors to achieve cash flow while building equity.
Getting Started: What You Need to Qualify
Even if you’re new to larger investments, you can still benefit from the MLI Select program. CMHC requires investors to demonstrate experience managing rental properties. If you lack this experience, you can partner with a professional property management company to meet the qualifications. This approach opens the door to opportunities for newer investors, ensuring they have the support needed to succeed.
Imagine purchasing an eight-unit building for $4.4 million. With MLI Select, you could qualify for financing of up to $3.9 million, drastically reducing your initial investment. By meeting affordability and efficiency criteria, you secure better rates and terms, turning a significant purchase into a manageable, cash-flowing asset.
Take the Next Step
Navigating programs like MLI Select requires expert guidance. The Dekker Team is here to help you determine whether this program aligns with your goals and connect you with the right opportunities.
Ready to explore the possibilities? Contact us at together@dekkerteam.com or call Ken Dekker at 613-867-6058 to schedule a clarity call. Let’s make the dream of larger real estate investments a reality for you.
