In the Canadian private mortgage marketplace there are many Mortgage Investment Corporations and even non exempt securities dealers offering investment opportunities. With security dealers they offer 'memorandums' or offerings of whatever they are wishing to raise capital for; often for a commercial venture of some kind; which involves many people giving their funds on a promise that the venture will complete. The actual return depends on that success of that venture. Your money, as an investor, will not be registered on land title, the venture corp will be named instead. Sounds more risky to us.... a bit like flying blind... with so many variables that you have given away all the control on.
Mortgage Investment Corporations (also called a MIC) also raise capital from many investors in which funds are all 'pooled together' but the main difference between them and security dealers is that a MIC's pooled funds go into many mortgages spread over many properties; therefore there is a diversification of risk as it is spread over so many properties. Since there will be many mortgages, all having different rates of returns, you will find out at the end of the year 'how much you made'. The types of mortgages can range for all different types of residential mortgages and even commercial ones; like a golf course, hotel or high rise. It will be the MIC's corporate name on all mortgages lent out; and if any property sells it will be the MIC that gets paid back first. You won't know until the year end what return was made.
Mortgage Swap does it differently. We match an investor with an actual borrower. We match a home that needs a mortgage directly to you. It will be your name that is on the mortgage as a lender and your name that will be registered at land title's to be repaid directly to you whenever a property sells. Each file shown to you will be triaged first by Home n Work Mortgages - a Canadian mortgage brokerage that applys the wisdom of the '15 Steps to Safe Private Lending' authored by Greg Stanley, duly licensed as a Certified Financial Planner and mortgage broker. Your registered mortgage has a fixed, predictable rate paid directly to you on a monthly basis. The rate is known before you invest. You get a copy of the whole file; the borrower's application, credit report, home appraisal, and mortgage broker's very detailed summary and disclosure. There is no better way to invest in private mortgages. To coin the phrase of famous investor Warren Buffett 'risk come from not knowing what you're doing' and we teach and 'hand hold' on every file.
Greg Stanley is able to move your funds from any bank or financial institution to one of our participating Trust Companies (like Olympia Trust or Canadian Western Trust) that will hold your self directed RSP's. Greg Stanley will then work with you, teach and mentor you so you start your retirement nest egg and see it grow and grow.
I'm busy working on my blog posts. Watch this space!