The Situation
A couple with two young children had just opened a pizza franchise in Metro Vancouver and were carrying about $100,000 of unsecured debt. Their rental property in the Fraser Valley, worth about $870,000, had a credit-union first mortgage of roughly $455,000 and equity to spare.
The Challenge
The franchise was weeks old, so its income did not exist on paper yet, and the family home already sat on a private first mortgage from an earlier purchase that had outrun the bank's timeline. No bank or alternative lender would add to that picture until the business had months of deposits.
The Solution
We arranged a private second mortgage of about $197,000 on the rental, interest-only on a one-year open term at 75% combined loan-to-value, with the exit written in: six months of franchise income, then a refinance to the alternative side. The funds cleared the unsecured debt and capitalized the business.
The Outcome
Ten months later, with the franchise grossing about $600,000 in its first year and the family home moved to an alternative lender at 80% of value, the proceeds paid out both the private first on the home and this private second, a case study in the residential batch. The private second did its job and was gone inside a year.