Achieve Outstanding Results for Your Investments

As with any mortgage transaction – there are costs involved with arranging the loan and making changes to the title of a property. With private mortgages this is not an exception but the rule. As there are professionals involved in the process (Mortgage Broker, Appraiser, Lawyer etc.) – there is also a bill at the end of the day.

The good news for the mortgage investor is that these costs are never yours to pay. The borrower is responsible for all the costs associated with the loan. The actual dollar amounts vary by the amount of loan and the risk associated with the file. The bottom line is that any and all costs involved with setting up the loan are the borrowers responsibility and fully disclosed to the borrower before they choose to commit to a course of action.

Opportunities vary but typically start at $40,000.00. There is no upper limit in terms of the maximum you can invest.

For those with a larger portfolio, for example 100K – I could spread this over 2 mortgages in a diversified geographic area to mitigate risk, if required.

YES absolutely and the process can’t be any simpler.

First, we use our partner Trust company who will create a Self-Directed RRSP on your behalf. This company is fully registered under the Loan and Trusts Corporation Act and actively traded on the TSX.

Second, the money you wish to invest is then transferred* from your existing RRSP account into the new Self-Directed RRSP. And because the transfer is from RRSP to RRSP there will be no tax consequences to you.

Third, when a mortgage investment becomes available, after you have reviewed the details and agreed to invest, our legal team then works with the Trust company to ensure a smooth transition of funds from your account to the borrower. In addition, the monthly payments from the borrower are sent directly to the Trust who deposit it into your account on a monthly basis. So totally hands free for you! And again, because this is an investment from within your RRSP, the money deposited is tax-free just like any other fund or stock held in an RRSP. So a win-win-win!

Finally, to help you through this process, along with myself, you will be assigned a Trust representative who will help guide you should you have any questions or concerns.

Again simple!

Scenario: 1-Year Private Second Mortgage

Borrower:	An individual with a high debt-to-income ratio or recently lowered credit score due to unforeseen circumstances, preventing them from qualifying for a traditional bank loan.
Goal:	Pay off high-interest credit cards and consolidate debt to improve credit score within one year.
Collateral:	A second mortgage placed on the borrower's home (which has high equity).
Term:	1 Year (12 months).
Interest Rate:	14% (fixed, often compounded monthly).
Payment Structure:	Often designed as Interest-Only, with the full principal amount due at the end of the term (balloon payment).

The Numbers: 1-Year Cost Breakdown

Principal:	$50,000
Annual Interest Payment:	$50,000 x 14% = $7000
Monthly Interest Payment:	$583.33 per month
Total Payoff Amount:	$50,000 (principal) + $7000 (interest) = $57,000 (after 12 months)
Borrower Exit Strategy:	Because this is a 1-year, high-interest loan, the borrower must have a plan to repay the $50,000 at the end of the year.
Strategy:	Improve credit score during the 12 months by paying off other debts.
Outcome:	Refinance with a traditional lender at a lower rate after 1 year, or sell the property.

Like every investment vehicle there are fees to cover the cost of administration and account handling. In the case of RRSP investment, there are 4 primary but minimal fees to be considered.

1. Yearly administration fee
2. A one-time mortgage purchase fee for each mortgage loan
3. A monthly administration fee for any active mortgage held within the account
4. A fee when a mortgage is discharged

However the important thing to note is that ALL these fees are reimbursed to you from the borrower at the end of the loan term.

So not only are you getting a superior rate of return but you are also recovering the costs of your investment. What other investment does that?

• Collectively my team has over 20 years of private mortgage investing in the province of Ontario.
• Each year we market, organize, arrange, manage and secure over 500 mortgages between Borrowers and Private Lenders.
• Our rock solid administrative systems combined with our professional partners ensure the utmost security for our valued Investors.

I understand that there is a learning curve involved with any new investment avenue. My hope is that these FAQ's has provided that information to you. However if you still have any questions, please ask...that’s what I’m here for.