Files of the Broker: Oddball Property Private Mortgage Financing

June 30, 2010

What do you get when you try to buy a property that was once a jail, fire hall, dance hall & town hall? A financing conundrum.
This is exactly what one of our clients purchased, where we provided private mortgage financing.  The purchase is even more remarkable when you consider that the jail, fire-hall, town-hall and dance hall are joined as one property, on one deed.
The property has an interesting history going back to the early days of Ontario, when towns sprung up around employment opportunities of budding industries. The property is located in a small sawmill town, along a railway line, and developed to serve the needs of the town’s people. Construction of the town-hall was considered for obvious administrative functions with an office on the ground floor, town hall and stage on the floor above to function not only for meetings, but also on weekends for dances, theatre and other festivities.

The fire-hall evolved from the voluntary fire brigade of citizens who were ready to spring into action when needed. But the jail is more intriguing and amusing. Crime was not a big problem but there were plenty of people who liked to have a good time with alcohol. When they became a nuisance they were simply put up for the night in the specifically constructed cell, adjacent to the office on the ground floor. It has three-foot-thick walls of field stones and a solid, heavy wooden door, making escape virtually impossible and muffling any sound such as singing from the intoxicated revelers.

Over the years the building became redundant, not for lack of drunks, but through amalgamation of administrative functions and services with a nearby, larger town.

In time the building deteriorated and was in need of maintenance and upgrading for which there was no money in the budget. In addition the lack of income, via property taxes persuaded the Town to sell via a judicial sale.

Our handy purchaser obtained the entire property, bounded by a park on two sides, for less than $100,000 when it was offered for sale to the highest bidder. He now lives there happily after renovating and restoring the property extensively with ‘sweat money’ and converted the jail into a wine cellar.

Such situations require private mortgage financing not only due to the zoning but also in circumstances of judicial sales. Because we are over 30 years in business as mortgage brokers we have come into contact with many situation that require private mortgage financing. Over the years, we forged long term relationships with private investors who approach lending, besides concerns over security, with a lot of common sense.

This story serves to illustrate our pivotal broker-role in transactions. Furthermore, it shows how borrowers can benefit from our experience and connection with private mortgage investors with whom we have developed, over the years, trusted relationships.

If you are a private investor looking for opportunities to invest, or a borrower needing help with your own unique and challenging circumstances, we invite you to call us with your story.
From the “Files of the broker”


Christopher Molder

Mortgage Broker

Christopher is a mortgage broker based in Toronto, Canada. And a son of a broker too. He’s a second generation mortgage broker. Following in his father’s steps he joined the family mortgage business straight out of university.