3 Unnecessary Hoops Foreign Investors Have to Jump Through
When you go out for lunch with the team at your office, does the conversation usually circle right back to subjects relating to work, even though you specifically went to a different location in an attempt to switch things up?
Happens to us too.
You can imagine the scene earlier this week when we ventured to our favourite lunch spot in East Vancouver, the world famous Tacofino Commissary on Hastings. Sure, we started off talking about sports and our kids, but sure enough, within a few minutes we were engaged in a heated debate about foreign investment.
(Stay tuned for next week’s post: Why Chinese Investment is Actually a Good Thing for Vancouver.)
We believe strongly in introducing new revenue into the lower mainland economy. It’s where we live, it’s where we eat lunch, and it’s where our friends and family stand to benefit from the increased cash flow. That’s why it’s important for us to assist the foreign investment process. It’s not always easy for investors - there are countless roadblocks.
Roadblocks such as:
1. Foreign Credit
Applying for loans on foreign soil is difficult when you don’t hold local credit. Canadian banks are set up to approve applications on an automated basis - as such it’s nearly impossible for some investors when they currently hold nothing that’s recognized by the bank.
2. Proving Income
In the same vein, local banks don’t recognize where the investment capital was earned. A foreign investor might have a large sum of cash to contribute, but if the bank doesn’t recognize the source, the amount simply doesn’t matter. Canadian banks normally require investment funds to sit in a Canadian account for 90 days, which is often not possible when it comes to foreign investment.
3. Owning vs Occupying
Canadian banks want people to live in the homes they purchase. We recently worked with a client from Vancouver who lives in Vancouver, but the fact his investment originated with a foreign holding company meant he was turned away by the bank. He was unable to make the purchase of a rental property even though he’d be living nearby.
That’s where One Stop came into the mix. We broker mortgages for clients if they have a down payment and own property. It’s not the traditional method of investment, but that’s why it’s called alternative financing.
It’s important to us that the local economy continues to grow and develop. We’re strong believers in foreign investment and we work hard to create the best deals possible for people regardless of where they’re from.
Because who wouldn’t want to live (and eat lunch) here?