Hello fellow REIN members,
because we are currently looking for RRSP funds to put mortgages on many of the 12 new houses we recently purchased in Niagara-on-the-Lake, I am sending a LOT of emails to a lot of potential investors.
And just this morning I received a reply from one of them that basically said "...forget me for now, I'm trying to recover the better part of a RRSP mortgage gone wrong."
So I called the guy to find out what happened.
It appears the people he did that RRSP mortgage with really did not know what they were doing, so as a result, he is struggling to end the deal and recover his funds.
So be careful with your RRSP, and follow those few points of advice:
1-make sure the agreement that is being used was written by a real estate lawyer
2-make sure that the whole process will be done by a real estate lawyer who has done this sort of transaction before
3-if possible, deal with Olympia Trust
4-ask that the borrower add a personal promissory note to the contract, so if the deal goes South, the borrower will have to cover the shortfall, not you
5-as an extra protection, ask to sign a Joint Venture Agreement with the borrower of your funds, and ask that the JVA be registered on title
6-finally, invest only with someone who has done many RRSP mortgages before, or if it is their first one, make sure they are mentored or coached by someone who has a lot of experience in doing that.
If you have any question or suggestion regarding this piece of advice, please contact me.
Daniel St-Jean
Professional Real Estate Investor, Catalyst, and Educator
Recipient of REIN's Top Player of the Year Award (Ontario) for 2012 and 2013
Bestselling Author
because we are currently looking for RRSP funds to put mortgages on many of the 12 new houses we recently purchased in Niagara-on-the-Lake, I am sending a LOT of emails to a lot of potential investors.
And just this morning I received a reply from one of them that basically said "...forget me for now, I'm trying to recover the better part of a RRSP mortgage gone wrong."
So I called the guy to find out what happened.
It appears the people he did that RRSP mortgage with really did not know what they were doing, so as a result, he is struggling to end the deal and recover his funds.
So be careful with your RRSP, and follow those few points of advice:
1-make sure the agreement that is being used was written by a real estate lawyer
2-make sure that the whole process will be done by a real estate lawyer who has done this sort of transaction before
3-if possible, deal with Olympia Trust
4-ask that the borrower add a personal promissory note to the contract, so if the deal goes South, the borrower will have to cover the shortfall, not you
5-as an extra protection, ask to sign a Joint Venture Agreement with the borrower of your funds, and ask that the JVA be registered on title
6-finally, invest only with someone who has done many RRSP mortgages before, or if it is their first one, make sure they are mentored or coached by someone who has a lot of experience in doing that.
If you have any question or suggestion regarding this piece of advice, please contact me.
Daniel St-Jean
Professional Real Estate Investor, Catalyst, and Educator
Recipient of REIN's Top Player of the Year Award (Ontario) for 2012 and 2013
Bestselling Author