How can I increase my odds of getting a high appraisal and be able to borrow against my new Commercial Property.
Recently I purchased a triplex with a "mixed use" designation in Cash.  It has a commercial element in the main floor unit which means I can't put it into a traditional Residential Mortgage with an A lender in Canada.  It has a cap rate of 7.3% and my hope was to have it appraised and refinanced so I could take my cash out and reinvest it elsewhere.  

I have a follow up meeting with a commercial lender and I want to present my business strategy in such a way that they a) put a mortgage on the home b) appraise it higher than my purchase price and allow me to borrow more money against the property.    

Any advice on how to present it to the lenders?  What am I missing anything? Is there a better option you see for my case?  One thing I was considering was getting the property re-zoned residential, but it would mean I couldn't use the commercial element in the future which could be very useful.

THANKS!
[{"id": "gtl12m8", "text": "Are the units occupied? Is 7.3 cap rate in line with the rest of the market?", "replies": [{"id": "gtl5mv1", "text": "The units were not rented when I purchased it which is why I couldn\u2019t put a mortgage on it originally, but now all three units are rented as residential.  Cap rates are usually between 5 and 6 in my area.", "replies": [{"id": "gtl8v79", "text": "They're rented as residential?  \nIs the main floor unit a live-work type deal or is the commercial element unused?", "replies": [{"id": "gtnf0zf", "text": "In the past, the front of the main floor unit has been used as commercial but is currently functioning as the living room of a residential unit. \n\nIt\u2019s my understanding that commercial lenders love multi-year leases as it avoids long stints of vacancy, but due to the fact that it\u2019s residential I can only sign my tenants to a 1 year lease lax before going month to month. That\u2019s the law(?) in Ontario, Canada or at least what is most typical.", "replies": [{"id": "gtnhngs", "text": "Yes, 1 year leases are typical in Ontario. I do not believe that it is against the Residential Tenancies Act to sign a longer initial lease. The tenants may elect to sign a new 1 year lease each year or to go month to month.\n\nCommercial lenders prefer multi-year leases, but it also takes much longer to fill a commercial unit vacancy than it takes to fill a residential unit vacancy.\n\nI am surprised you wouldn't be able to get it financed as a purely residential property if that is its current use (zoning notwithstanding).", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gtmlx4a", "text": "Lease out the spaces for the maximum dollar you can, have seasoned tenants (as in...been there for several years paying timely) and VOILA....high appraisal.", "replies": [{"id": "gtnfkh5", "text": "It\u2019s my understanding that commercial lenders like multi - year leases as vacancy can be much longer in commercial than in residential. That being said, it\u2019s being rented as residential, not commercial and I\u2019m concerned it will be poorly evaluated due to the fact that I can only ask my tenants to sign for 1 year before going month to month. \n\nWill lenders consider the fact that it\u2019s more residential or do their evaluation processes not take that into consideration?", "replies": [{"id": "gtofl1h", "text": "&gt;Will lenders consider the fact that it\u2019s more residential or do their evaluation processes not take that into consideration?\n\nLenders take everything in to consideration.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gtnw6mr", "text": "It all units are rented residential then why is it still considered mixed use? Zoning? If so, you need to back up why the appraiser doesn\u2019t throw out any income for that unit.", "replies": [], "depth": 1}, {"id": "gtqoaqh", "text": "If you recently purchased it, the lender will probably use the purchase price or appraised value, whichever is less. After a certain \"seasoning\" period (6-18 months depending on the lender) then they will go off the current appraised value. Discuss this with your lender.", "replies": [], "depth": 1}, {"id": "gu72x3c", "text": "Why do you think it has a cap rate of 7.3%?", "replies": [], "depth": 1}, {"id": "gu7551d", "text": "The only way you can influence an appraisal is to provide comparable properties and comparable leases that support your target value with more detailed data than would typically be available to the appraiser. If you can get hard data from other owners that will help. Otherwise, there\u2019s not much you can do unless you greatly improve the property\u2019s condition.", "replies": [], "depth": 1}]