Private Mortgages – Be a Secured Lender..Not a Speculator!
When it comes to investing, you can generally invest for cashflow, speculation, or some combination of each. Personally, I don’t like my money going up and down every day based on the whims of a rigged stock market, which is full of insiders, high frequency traders, and short sellers trading on whatever “news” the media happens to churn out that day. I don’t know about you, but I have also had more than my fair share of managed products like mutual funds, usually with fancy names and bloated fees, pushed by banks and “financial advisors” because no matter what happens to YOUR money, up-down-sideways, doesn’t particularly matter to them, those fat management fees keep on rolling in. The alternative to mutual funds, that unfortunately far too many Canadians follow, is buying low yield GIC’s at 1.5-2.5%, which also is clearly insufficient for most people’s retirement and income needs.
Instead of being a speculator, consider putting your money to work as a secured creditor and mortgage holder in Canadian real estate. Depending on the type of mortgage you invest in, the going rate for private mortgages is between 8-12%. Although private mortgages are not entirely without risk, this risk is very dependent on the specific type of mortgage, property, or mortgage investment corp. (MIC) one lends through. The thing to realize is that a mortgage is not a speculation, as your money is not fluctuating up and down. Mortgages are a contract, where the borrower is obligated to make payments delivering this steady return to the investor, secured with quality marketable real estate, which is usually also the borrowers principle residence. Investing in private mortgages is a less known alternative where you get most of the return on your money, not the bank. It gives you the opportunity to be the bank on a qualified mortgage application as a secured creditor with a steady stream of high interest, rather than a speculator, hoping your investment goes up (And not down) over time.
As a mortgage broker active in the private equity space, I can tell you there is currently and immense demand for private mortgages. Our government, mortgage insurers, and traditional “A” lenders have been consistently tightening mortgage lending rules, to the point of turning their back on many borrowers that may have been fully qualified just a short time ago. Many self employed individuals and business owners in particular, have had the banks turn their back on them, favouring the “golden paycheque” borrower instead. Because of these recent changes, the demand for alternative private mortgages has never been higher, along with the quality of borrowers as many of these borrowers would have been bankable on the “A” side of lending, only a short time ago, and are now forced to look for alternatives in the private mortgage market.
To find out more about the immense opportunity in lending funds to qualified borrowers, secured with Canadian real estate, using tax sheltered RSP/TFSA funds or non-registered money, please contact me. I can present a variety of options in lending your money to qualified borrowers, and assist you in garnering a generous stream of regular interest income. So the real questions is…do you want to be a speculator or a lender? Lenders wanted!
About Alan Fetterly:
Alan is a Certified Financial Planner and licensed Mortgage Broker with over 20 years experience in banking, investments, real estate, and mortgage brokerage. He has worked within major banks and credit unions in both an advisory and management capacity. Alan aims to open opportunity and education in alternative investments, as well as assists a vast array of borrowers with their mortgage financing needs.