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| Investor Information |
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| 403 252 7882 |
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| A Direct Real Estate Lender |
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| Invesco Mortgage has been lending money to individuals and businesses with real estate on a short term basis in Alberta and British Columbia, since 1978. We have funded over 600 million dollars of projects while achieving returns on investments that exceed normal bank deposit rates by 8% to 12%. All loans are interest only, with interest paid monthly and terms up to 1 year. Investment is also |
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available through your self directed RRSP.
As an investor, you are provided with specific detailed information about your investment project prior to funding and your name is listed on title, taking the same security position as a bank. |
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| Myths About Investing In Mortgages |
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Why are the banks not lending money on these projects? |
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By far, the most common question from new investors is just that, "if the deal is so good why isn't the bank lending money to the borrower?" The answer is simple. The banking system in Canada is controlled by governmental legislation which restricts foreign banks from doing business in Canada. This was done to ensure there is no further competition for the current banks already doing business in Canada. As the bank profits swell the banks have the luxury of reducing the commercial and small business loan portfolio and focus on non-lending business models, such as service fees and investment service fees.
Gone are the days when the long term relationship with the neighborhood banker was just a phone call away when the borrower needed money for that next project. All loan decisions now come from someone geographically well-removed and who is looking for minimum financial ratios, who favor specific business segments and who rely heavily on previous or outdated financial information. This process is very taxing and will often take weeks before the borrower receives a firm loan commitment or notification of rejection. |
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High rates of return equal high risk |
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| For anyone who has ever taken a finance course this saying holds true, if you are talking about the stock market! As the banks pull away from conventional lending there is a greater opportunity to lend money on high quality properties and |
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| achieving double digit returns. Did you know that almost all of the conventional lenders will not lend money on raw land, even with a clear title? This is done because the banks view raw land as a non-income producing asset which does not fit into their lending criteria. |
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If the bank doesn't like the project why would we lend money on it? |
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| As a very conservative lender we look at 4 critical criteria. |
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1. What is the value of the property, in its current state? |
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Before we do anything, we obtain an appraisal from a professional appraiser who is certified with only an AACI, P.App designation. AACI stands for "Accredited Appraiser Canadian Institute, Professional Appraiser" which is the highest certification in Canada. We use 2 specific appraisal companies who have the reputation of being knowledgeable, ethical and accurate. These Alberta based firms provide the lowest possible fair market value rather than a range or average value which is a basis for our lending decision. We lend, up to a maximum of 75% on the lower of the purchase price or appraised value, which ever is less, of that project. This ensures there is adequate equity to cover any short fall that may occur in the event of a default. |
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2. Does the borrower have at least 25% in cash, real estate or other liquid security? |
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This eliminates the majority of borrowers but ensures the borrower has a major interest in the project and is very interested in seeing the project through completion. |
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3. What is the business plan and the track record of the borrower? |
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Every loan is reviewed by our credit committee to ensure the business plan of the borrower makes economic sense. We use over 40 years of combined experience plus outside consultants, if required to ensure the project is as viable as advertised.
All loans have a maximum term of one year. This is done to ensure the borrower is very motivated to complete the project and repay the loan on time. Because of our strict lending terms most borrowers must have extensive experience dealing with large and small urban centre councils and Municipal District councils. |
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4. What is the exit strategy? |
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This simply means, in one year when the loan matures does the borrower have the ability to pay the entire amount of the loan back?
This final point eliminates most inquiries if all other criteria have been met. This hurdle specifically targets borrowers who are interested in taking a project and improving it's salability to the point where they can pay all expenses plus make a profit, within one year. |
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| The Process |
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| Before a deal is offered to our investors it has gone through our complete due diligence. The following documents are typically reviewed as required and available upon request: |
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Offer to Purchase |
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Real Estate Appraisal |
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Zoning Status or Area Structure Plan |
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Land Titles Report |
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Mortgage Title Insurance Application |
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Environmental Report |
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Personal Application and Net Worth |
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In some cases, Corporate Financial Statements, Tax Filing Information or Credit Reports |
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In every case before an investor is presented with an investment opportunity they receive a current copy of the appraisal as well as a deal summary outlining the terms and conditions such as term, rate, location, and maturity.
Once funding has been provided each investor will receive a copy of the complete mortgage signed by the borrower, a copy of the title from Land Titles showing the name and percentage of investment for each investor and post dated, interest only cheques for the term of the mortgage paid directly from the borrower and drawn on their account.
Our mortgages are RRSP eligible, service fees are applicable, see www.olympiatrust.com for details.
There are never any costs to the investor. |
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| Safeguards |
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| To ensure added safety of your investment, Invesco Mortgage has implemented specific security futures, such as: |
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Each investor's name is listed as a mortgage holder on the property title. |
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All funds are paid from you to our lawyer and held in the firm's legal trust account until the firm is satisfied a mortgage can be registered as instructed. Invesco Mortgage acts as an independent third party and never handles the money. |
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Our law firm is Gowlings Lafleur Henderson, LLP, the second largest law firm in Canada. www.gowlings.com. Our lawyer is Mr. Greg Peterson, Mr. Peterson is a retired professional football player with the Calgary Stampeders and is also the voice of the Stampeders for all radio game broadcasts. |
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Gowlings Lafleur Henderson, LLP handles the preparation and enforcement of the mortgage document. These costs are paid by the borrower. |
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Invesco Mortgage ensures the borrower always has a minimum of 25% equity in the project. |
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Each loan is funded using title insurance to safeguard against any title fraud. |
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