Private Mortgage Investment

Here are a few key benefits to investing in private mortgages:

* You can use your under performing RRSPs, TFSA funds without penalty

(simply move to a self directed RRSP account)

* Your capital remains fairly liquid as investment terms are typically one year

* You decide which clients/properties to lend to

* Your capital is secured by a lien on the property

* Passive investment after funds transferred

* Solid rates of return

Typical funding scenario:

Your comfort level will determine the properties you invest in, however, the below is meant to illustrate common scenarios.

1st Mortgages

Rate of Return = 7.5% to 9.5% annually

Loan to Value of Property = Up to 85%

Does not include any up front lender risk fee.

* * Client will be responsible to pay all legal fees. You the lender reserves the right have your solicitor close the transaction.

2nd Mortgages 

Rate of Return = 10% to 13%

Loan to Value = 80% or less

Does not include any up front lender risk fee.

* * Client will be responsible to pay all legal fees. You the lender reserves the right have your solicitor close the transaction.

As in any investment there are risks involved.

See the value but you do not have RRSPs or upfront capital to invest? Do you have equity in your home? Consider pulling equity out of your home on a secured line of credit. This way you won’t be charged interest on the money you’re “not using”. If you can borrow money at 3% and make 12%, that simply makes sense.

Keep in mind in the above example you could lend on four different properties $25,000 each minimizing your risk exposure even further.

Please contact me to discuss your overall investing needs. Upon completing your risk profile I will be happy to provide you with deals that fit your investing model.

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