Direct Investment With
Administration
Another option for investing in a mortgage
without assuming 100% of the risk is to take a
percentage interest in a syndicated mortgage. We
manage these mortgages and take care of all
administration work associated with these mortgages
for a fee of 7.0% of the interest earned. Your name
and the percentage interest in the mortgage you hold
will appear on title. We however assume the
obligation of hiring a lawyer to enforce the
mortgage should default occur with any fees incurred
being paid from the proceeds of sale.
A common investment that comes available is a
larger commercial mortgage. Most owners of
commercial properties want to finance these loans to
75% of the value of the property. However
traditional Canadian lenders will only fund these
mortgages to 60% of the value if they will fund it
all. This leaves an opportunity for private funds to
fill the void and earn 8.5% to 11.0% on first
mortgages and 11.0% to 16.0 on second mortgages.
These mortgages are fully administered and each
investor receives a cheque for their share of the
mortgage payment every month.
The second option it to participate in
subordinate financing granted to developers and
builders of viable real estate projects. In this
scenario you not only receive interest on the
mortgage each month but a “piece of the profit pie”
when the development is complete. Risk is controlled
by having our lawyer hold back sufficient funds to
pay the interest owing on the mortgage for the
anticipated time it will take to complete the
project, and advancing funds only as required to
complete the project. As these advances are made,
the value of the project increases. This type of
investment is riskier but the potential return is
substantial as we look for a minimum return of 30%
per annum over the term of the project.
As an individual investor you can minimize risk
by building a portfolio of this mortgages. The
minimum investment is $25,000 for all mortgages, and
as each investor can participate in as many
opportunities as they have funds for.
To see the investment options currently available
please access Fully Administered Investment
Opportunities now.
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