Direct Investment Without Administration

Provided you are willing assume 100% of the risk associated with investing in a mortgage, you can hold 100% of a mortgage by going on title to the property as the sole mortgagee. You can hold the mortgage personally or you can incorporate a company to hold the mortgage. You also will receive the mortgage payment from the investor directly by way of cheque payable to you each month. As this is a private contract, you will not receive an institutional “interest earned” statement which they forward to Revenue Canada as you would if you were holding a GIC.

You can control the amount of risk you wish to take by the type of mortgage you invest in ie: first vs second; the amount of money loaned relative to the value of the underlying security; the credit history of the borrower etc. However the downside is you assume 100% of administrative work associated with the mortgage and 100% of the risk of default. In other words if the borrower stops paying you for any reason, you must pay a lawyer to enforce the mortgage yourself, and if not all of principal is realized upon enforcement, you assume 100% of the loss.

We recommend this alternative only for sophisticated investors with experience in investing in mortgages, the time to perform the work associated with underwriting and administering the mortgage, and sufficient funds to invest to allow adequate diversification ( we recommend a minimum of $250,000).

If you are looking for direct mortgage investments please access Direct Investment Opportunities Without Administration for an inventory of available mortgages.