Bridging the Gap: Short-Term Financing for Alberta Multi-FAmily Acquisitions
Any commercial mortgage broker operating in Alberta knows that multi-family real estate is one of the most lucrative asset classes right now. Driven by strong migration, rising rents, and a robust economy, investors are scrambling for apartment buildings in Edmonton, Calgary, and secondary markets.
But there is a glaring problem: speed.
When your client finds a great 12-unit building, they want the premium rates and amortization terms that come with CMHC’s MLI Select program. The reality? CMHC is notoriously slow. A full multi-family application, underwriting, and commitment process can easily take 60 to 90 days—sometimes up to 6 months for complex files. Sellers in a hot market simply will not wait that long.
If you make your client’s offer contingent on a 90-day CMHC approval, you are going to lose the deal to a buyer who can close faster. Here is how elite brokers use private bridge financing to solve this problem.
1. Secure the Asset First
The first rule of commercial real estate is to control the asset. A private bridge loan acts as high-speed capital. Hard money lenders underwrite the equity in the building and the viability of your exit strategy. Because we don't have layers of bureaucratic red tape, we can fund a multi-family acquisition in days.
Your client submits an offer with a fast, confident closing date, beats the competition, and takes possession of the building.
2. Buy Time for the CMHC Process
Once the property is secured, the pressure is off. Your client now holds a short-term, interest-only private loan. You can now take the next 6 to 12 months to properly structure their CMHC application. This gives you time to:
Complete necessary Phase 1 Environmental assessments or Appraisals.
Execute minor cosmetic renovations to stabilize rents and improve the Debt Service Coverage Ratio (DSCR).
Work with your energy consultants or architects to maximize points for the MLI Select program.
3. The Broker's Double Payday
From a broker's perspective, pitching a private bridge loan is a highly profitable strategy. You aren't just saving the deal for your client—you are structuring two transactions. You earn your broker fee on the initial private acquisition loan, and you earn your fee again when you successfully refinance them into the permanent CMHC product 8 months later.
The Bottom Line
Fast money secures the deal; cheap money holds the deal. Your job as a broker is to construct the bridge between the two.
Do you have a client looking at a multi-family property in Alberta but the seller won't wait for CMHC? Contact AJS Capital today and let's structure the bridge loan you need to close the deal fast.
