How a Canadian Investor Used a Cash-Out Refinance to Build in the U.S.

As a loan consultant at Milo, I’ve worked with many clients, but one recent case stands out. It involves a Canadian home builder who successfully transitioned into the U.S. real estate market—a move that came with its fair share of challenges and triumphs.

The client was a self-employed home builder in Canada, known for crafting high-quality homes. He had recently completed his first U.S. investment property, a stunning single-family home valued at $1,000,000 in Tennessee. His goal was to continue expanding his business into the U.S. real estate market, but he needed to pull cash out of the property he had just built to fuel this expansion.

When he found Milo online, he was searching for a lender who could handle the complexities of international mortgages. He had initially approached RBC for a loan, but they denied him due to a high Debt-to-Income (DTI) ratio in Canada. Being self-employed, his tax returns reflected significant expenses, which only made the situation more difficult. Additionally, the fact that he had purchased the property less than a year ago further complicated matters.

After speaking with him, I quickly realized that a traditional mortgage wasn’t the right fit. What he needed was a DSCR (Debt Service Coverage Ratio) loan, which assesses the loan based on the income the property generates rather than the borrower’s personal income. This was a crucial distinction because it allowed us to focus on the rental income his property in Tennessee was producing.

We structured the loan as a 40% LTV (Loan-to-Value) cash-out refinance, which enabled him to take out the cash he needed without over-leveraging his investment. The property’s rental income was strong enough to support the loan, and this approach ultimately allowed us to bypass the hurdles that had previously stopped him.

The process wasn’t without its challenges, but we worked closely with the client, keeping him informed at every step. The result? He secured the funds he needed to continue his U.S. expansion. For him, this loan wasn’t just about getting cash—it was a strategic move that set the foundation for future growth in a new market.

From my perspective, it was deeply satisfying to help someone overcome obstacles that initially seemed insurmountable. This wasn’t just another loan; it was the start of something bigger for my client, and I’m proud that Milo could play a role in that journey.

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.