How a Canadian Investor Maximized Rental Income with a Cash-out Refinance

Navigating real estate financing as an international investor comes with unique challenges, especially when you're self-employed. This was exactly the situation faced by one of my clients, a Canadian investor who had recently purchased a single-family home in Estero, Florida, for $764,000. Due to struggles securing financing through his Canadian bank, he decided to buy the property in cash for a quick sale. With the purchase completed, his next goal was to renovate and install a pool to boost the home’s rental value. However, having just made a significant all-cash purchase, he didn’t want to tap into his liquidity again. Instead, he set his sights on finding financing options in the U.S.

While researching cross-border mortgage solutions, he came across Milo. He was specifically looking for a lender who understood the complexities of financing for international investors. His biggest concern was finding a solution that wouldn’t require extensive income documentation, which had proven difficult due to his self-employed status. That’s when he reached out to us.

The Loan Obstacle

Our client’s experience with traditional banks in Canada had been frustrating. His self-employed status made it challenging to qualify for a loan under the debt-to-income (DTI) ratio that many banks use. DTI compares a borrower’s monthly debt payments to their gross income, which can be difficult for those with fluctuating or harder-to-prove income. He had encountered these issues before, but he was determined to explore other options that wouldn’t require him to dip further into his financial reserves.

Given his situation, I knew that a Debt Service Coverage Ratio (DSCR) loan would be an ideal fit. A DSCR loan allows international investors to qualify based on the rental income potential of the property, rather than their personal income. This meant we could focus solely on the cash flow the property could generate, which was exactly what my client needed to move forward without the hassle of providing extensive personal financial documentation.

The Solution

The property’s estimated rental value was nearly twice the projected monthly mortgage payments, so it was clear that he would qualify for one of the best DSCR rates available. This was a relief for him, as it allowed us to move forward without requiring a deep dive into his income. With a DSCR loan, all we needed to show was that the rental income from the property would cover the loan payments—a far simpler approach than the one his Canadian bank had used.

We proceeded with a cash-out refinance. This allowed him to pull equity out of his property without having to sell it or use personal funds. The 46% loan-to-value (LTV) ratio we secured meant that he was able to cash out enough to fund the pool installation he had been planning. Not only would this improve the property’s appeal and increase rental income, but it also gave him enough funds to put a downpayment on another investment property in Florida.

The Outcome

Working with this client was a reminder of how vital it is to have flexible loan products that meet the unique needs of international investors. Not all lenders can offer the kind of tailored solutions that allow someone to navigate the challenges of self-employment, cross-border finance, and the U.S. real estate market simultaneously. With the right loan structure, we were able to turn what could have been a complicated process into a straightforward solution.

At the end of the day, we didn’t just secure a loan—we empowered my client to grow his rental income and expand his portfolio without sacrificing his financial stability.

The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.