When would a buyer need private lender financing to buy a tenanted fourplex in Ontario?

A buyer might turn to private lender financing when a conventional or CMHC-insured lender cannot approve or fund the purchase in time, or at all, for reasons specific to the deal, such as a tight closing timeline, income documentation that does not fit standard lender criteria, or property condition issues that a conventional lender is unwilling to accept as security. A tenanted fourplex with an unusual rent roll or a building needing repairs can sometimes fall into this category.

Private financing is generally more expensive and shorter-term than conventional options, so it is typically used as a bridge to complete the purchase rather than a permanent solution, with a plan to refinance into conventional or insured financing once the underlying issue, such as needed repairs or documentation, is resolved. Because private lending terms and costs vary considerably and are individually negotiated, review any private financing arrangement carefully with your lawyer before committing, and go in with a realistic plan for how and when you intend to move to more conventional financing afterward.