• Investing for Financial Freedom

  • With the paltry returns we are seeing these days, Canadians are seeking other viable ways to get healthy returns through investing.

    Some like to invest in properties – preferring a bricks and mortgage asset, while others prefer to look at their statements and see their money grow without dealing with tenants and toilets (so to speak!).

    As a mortgage agent and real estate investor I like both, but lately with property prices rising and market rents not rising in relation, cash flow is not as healthy as it once was so I went on the search for a different product and liked it so much that I decided I would go on a mission to sharing what I learned.

    Don’t get me wrong, I still like to have my bricks and mortar investments but at the end of the day, I prefer to be a backseat investor over dealing with tenants and toilets – at least for now!

    investing-for-financial-freedom

    In this post, I will speak about investing for an 8-12% return.

    How can you get an 8-12% return on your investments without any fees? Sounds intriguing but also unlikely right?  That’s what I thought until I investigated every aspect of this opportunity and here’s what I discovered, but first a little history.

    After the crash of 2008-2009, I woke up like so many others’ panicked as I realized that most of my so-called savings went up in smoke.  My RRSP’s had been decimated and after the fees that my account manager was taking I literally had a ¼ of my investment left.  I decided right then to take control.  I started to self-direct mine and my husbands’ RRSP’s and have been getting a return of 4-6% per annum, with very little MER fees.

    MER or Management Expense Ratio fees are what you pay your financial advisor or bank to invest on your behalf.  Would it surprise you to learn that in Canada we pay one of the highest MER fees in the world! We went from paying 3% on our RRSP’s to less than .50%, which was a substantial savings.

    Then I learned about 2nd mortgages and specifically lending my money out and investing in syndicated mortgage investments.  I will speak about both separately.

    Being the Lender

    With this option, you lend in 1st 2nd or 3rd position on a single-family home for a single borrower.  In 1st position, your rate of return is lower because your risk is lower.  Meaning that if the borrower defaults you are in a better position, being lender in 1st position to recoup your funds in a power-of-sale situation.  Would it interest you to know that in Canada the amount of people going through power-of-sale is less than .35%?

    I recently lent my money to a borrower (files are completely underwritten and the borrower is thoroughly vetted by licensed mortgage professionals so we can avert power-of-sale situations) for a 15% return.  My investment is in 3rd position, thus my risk is a bit higher and therefore my return is higher.

    Investing in Syndicated Mortgages

    Syndicated Mortgage Investments (SMI’s) are large-scale, blue chip real estate investment opportunities. Using this vehicle, investors lend money to Canada’s most experienced, successful real estate developers to support their urban housing, and commercial real estate development projects.

    Now you can invest in a diverse suite of high quality real estate developments as a lender and realize consistent, predictable premium returns with physical collateral you can touch and feel insulating your money.

    There are numerous development companies in the marketplace today, however not all are built the same.  When doing my research, I searched for a company, that had a track record of successful development projects, that was associated with the best developers in their field and a company that had successful exits (projects that had been built and sold).

    I found such a company in Fortress Real Developments.

    I decided to take my husbands’ RRSP’s and invest it in a project through Fortress. Our investment will grow at a minimum rate of 8%, however with every investment, there is the opportunity to participate in the developer’s profits.

    Development is devised upon a capital stack. Developers must have their own funds of at least 20% to put into the project and must pre-sell 50% of the units before construction financing through the bank is triggered.  You and I as investors fill in the 15% gap, which goes towards marketing, building the sales center, etc.

    Benefits of Investing in Syndicated Mortgage Investments:

    • Minimum fixed annual returns of 8-12%.
    • No Fees. Ever.
    • Eligible with RRSP, LIRA, TFSA, RESP, CASH
    • Direct collateral to protect every investment – you are registered on title
    • Robust suite of high quality opportunities to choose from
    • Flexible terms ranging from 1-5 years.
    • Easy to participate – minimum investment only $30,000.00
    • Eligible for US and Foreign Investors
    • Fully vetted by Mortgage agents/brokers who understand development and real estate

    Want to get improve your current ROI? Reach out today and let’s see what option is best for you.