Download invest in syndicate mortgages

INVEST IN
SYNDICATE MORTGAGES
INVEST IN YOUR FUTURE
WHO ARE YOU INVESTING WITH?
Through RSP eligible syndicate mortgages, consumers can
invest directly into the proven market of Canadian real estate
by becoming a mortgage lender in Fortress projects. Your
principal amount is fully secured as a mortgage against the
subject property. You will enjoy steady interest on your
principal and when available, receive a deferred lender fee
at the end of your term.
Fortress Real Developments partners with some of Canada’s
leading developers and homebuilders. To date over one
thousand development deals have been reviewed and
evaluated. Fortress partners only on those developments
that satisfy the rigorous criteria set forth by their internal
stakeholder management team. Through this process
Fortress has partnered with long established builders like
Cityzen Development Group, Lamb Developments and Sierra
Building Group, as well as up and coming developers such
as Carlyle Communities and Symmetry Developments.
WHAT IS A SYNDICATE MORTGAGE
A syndicate mortgage is where several investors combine
funds together to create one instrument: a mortgage. The
investment moves as one funding but each investor is
individually registered and secured proportionally.
Fortress is partnered on various development projects including
low-rise, mid-rise, high-rise, commercial and mixed use.
Fixed terms with defined horizons and the unique security
of collateral only available on a mortgage. Investing that
makes sense.
INVESTMENT STRUCTURE
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Typically 8% annual return (non-compounded)
Terms range from 2 - 5 years
$30,000 minimum investment
RSP, LIRA, LIF, RIF, RESP & TFSA eligible
Secured by a charge against the subject property
Certified third party appraisals and opinions
Potential deferred lender fee at the end of term
DLF*
8%
INTEREST*
8%
RETURN OF
PRINCIPAL
INTEREST*
8%
24%
INTEREST*
16%
8%
8%
YEAR 1
YEAR 2
INTEREST*
YEAR 3
(At the end
of your
contract
term)*
TO INVEST CONTACT
Harun-Baha Celebi
Agent Licence #M16002140
Office: (647) 367-9734 x 276
Direct: (647) 575-1923
www.fmpmortgages.com
YEAR 4
mortgages by becoming a lender in Fortress Real Developments projects. All syndicate mortgage transactions
are closed by Building & Development Mortgages Canada Inc. (FSCO License #10102, Nova Scotia license#
1722906), unless specifically noted otherwise. Please speak with a licensed mortgage agent/broker for more
details. For more information please visit our website www.fmpmortgages.com
FREQUENTLY ASKED
QUESTIONS
Why invest in real estate?
underserved in many investment portfolios. The ability to
collateralize directly to an actual asset makes real estate an
attractive option. All markets (for example: stocks, bonds,
commodities) have cycles and periods of upturns and
invest in real estate prefer the security that comes with the
direct charge against the property.
Why invest through Syndicate Mortgages?
A syndicate mortgage allows you to invest directly in
Canada’s real estate development and construction industry.
You will not receive shares or units that can change in value.
Instead your principal is secured against the property/land
while you enjoy steady interest on your funds with the
potential for profit participation at the end of your term.
How do I earn a profit?
means. The first is through regular interest payments paid
on your principal while the project is progressing. The second
is through a deferred lender fee upon completion of the
project, which is based on the project’s profitability (see
contract for details).
Why not just invest in the corporation itself?
more profit but can also present greater risk, including
among other risk factors, cash calls and share dilution.
Why do developers need additional financing?
Developers work with an equity partner or mezzanine lender
to get access to additional capital they need outside of the
funds the bank provides to buy the land and finance the
construction. Developers are carefully screened and
contribute their own equity and cash at prescribed intervals.
What is an appraisal?
Appraisals are provided by AACI designated members. These
professionals are tasked with providing hard, reliable
valuations of land to banks, especially when land is being
purchased. This baseline for value provides a key element of
assessing the current value of a project.
What about the risks of cost over-runs and delays?
While every project starts with a detailed schedule, many of
the dates are estimates where fluctuations in the order of
months can occur. Especially during approvals processes,
when dealing with municipalities, the public, city councils,
and the many other stakeholders, many aspects of the
schedule are outside the control of the development
manager. During the marketing and sales of a project, project
schedules are based on expected absorption. The original
schedules may make assumptions on what the market will
be 1-3 years down the road, such as competing projects,
which may impact sales.
Delays can also occur during construction, primarily during
underground construction. The reason for this is the unknowns
that potentially exist with water or soil condition, where
additional work or designs may need to be adjusted. For all
of these reasons, projects have built in contingencies in both
budget and schedule to account for potential risk of delays.
Why are appraisals and valuations so important?
Appraisals are critical as they help assess the loan-to-value
ratio of a deal. This is one of the formulas that illustrate the
degree of risk associated with your investment. Since your
investment is secured against the land/property, the value
of that asset is key in the event of any problem with the
project; the asset can be sold to help recover your principal
investment. When appraisals are not available (e.g. lack of
directly comparable land or property), a third party research
company is engaged to provide detailed analytics to assess
the value of a property or parcel.
What if the developer or development fails?
A default would occur if the developer cannot pay back the
funds by the maturity date of the contract. This can be
proactively mitigated by the developer by:
đ making a payment to investors in exchange for an extension
đ attaining an institutional refinance to buy out the
syndicate mortgage
If these cannot be achieved, then the process would
commence to sell the property to recover the investor
monies. This is a significant advantage to being secured via
syndicate mortgage; recovery of your investment will take
priority over all unsecured debts, monies owed by the
corporation and even construction liens.
mortgages by becoming a lender in Fortress Real Developments projects. All syndicate mortgage transactions
are closed by Building & Development Mortgages Canada Inc. (FSCO License #10102, Nova Scotia license#
1722906), unless specifically noted otherwise. Please speak with a licensed mortgage agent/broker for more
details. For more information please visit our website www.fmpmortgages.com