Lending mortgage funds within RRSP`s
- Thread starter barb
- Start date
There are a few threads with all you need to know in these forums - do a search and you will find them. My preferred Trustee where he can aet up a Self Directed account is Olympia Trust.
Hope that hslps get you started.
Hope that hslps get you started.
QUOTE (GarthChapman @ Jun 23 2009, 03:26 PM) There are a few threads with all you need to know in these forums - do a search and you will find them. My preferred Trustee where he can aet up a Self Directed account is Olympia Trust.
Hope that hslps get you started.
Will do. Thanks for responding so quickly. I appreciate it.
Barb
Hope that hslps get you started.
Will do. Thanks for responding so quickly. I appreciate it.
Barb
QUOTE (barb @ Jun 23 2009, 03:17 PM)
Hello fellow real estate investors!!!
A friend has agreed to invest his rrsp money in real estate with me. Could someone advise me where he would set up a self-directed rrsp for this transaction and any guidelines, rules or regulations we should be aware of?
Thanks.
Barb
Hi Barb,
Also check out the thread at http://myreinspace.com/rein_members_only/General/83-8290-42880-RRSP_investing_101_-_Help.html or contact me anytime. Or check out the June issue of Canadian RE Magazine for our article on this subject.
Hello fellow real estate investors!!!
A friend has agreed to invest his rrsp money in real estate with me. Could someone advise me where he would set up a self-directed rrsp for this transaction and any guidelines, rules or regulations we should be aware of?
Thanks.
Barb
Hi Barb,
Also check out the thread at http://myreinspace.com/rein_members_only/General/83-8290-42880-RRSP_investing_101_-_Help.html or contact me anytime. Or check out the June issue of Canadian RE Magazine for our article on this subject.
It can happen fairly fast, but the hold up when I set up mine was the releasing of my funds from the Royal Bank to Olympia. It took me about 6 weeks total but I am sure they don`t all take that long.
it doesn`t take long to set up they need a self directed account. If you use TDCT they can set it up in branch. Then they will need to transfer the funds which may take some time depending on what they have the money in at the moment and which institution some are quicker than others to transfer the funds. Once the funds are available you have your lawyer draw up the paperwork and I think the last time we did it we had funds 48 hrs after that.
We have found that B2B Trust is another good company to go through. They have an office in Toronto, and the best part about them is that you don`t need an appraisal on the property to put the 2nd or 3rd RRSP mortgage on it.
This not only saves money, but allows you to go up to 100% LTV (or higher if you wish).
Erik Mitchell
Direct Real Estate Investors Inc.
This not only saves money, but allows you to go up to 100% LTV (or higher if you wish).
Erik Mitchell
Direct Real Estate Investors Inc.
QUOTE (DREI @ Jul 2 2009, 12:53 PM) We have found that B2B Trust is another good company to go through. They have an office in Toronto, and the best part about them is that you don`t need an appraisal on the property to put the 2nd or 3rd RRSP mortgage on it.
This not only saves money, but allows you to go up to 100% LTV (or higher if you wish).
Erik Mitchell
Direct Real Estate Investors Inc.
Thanks to you all for the great info. I checked with Olympia and they do not allow balloon payments at the mortgage maturity. Is there a Trust administrator that deals in Alberta arms length mortgages that allows for a one time payment at maturation? I note that this strategy is offered as one to maximize cash flow both at REIN and in Monte`s article in Canadian RE (June 09). Thanks for the help. Ciao,
Paul
This not only saves money, but allows you to go up to 100% LTV (or higher if you wish).
Erik Mitchell
Direct Real Estate Investors Inc.
Thanks to you all for the great info. I checked with Olympia and they do not allow balloon payments at the mortgage maturity. Is there a Trust administrator that deals in Alberta arms length mortgages that allows for a one time payment at maturation? I note that this strategy is offered as one to maximize cash flow both at REIN and in Monte`s article in Canadian RE (June 09). Thanks for the help. Ciao,
Paul
QUOTE (PaulKlann @ Sep 15 2009, 10:35 AM) Thanks to you all for the great info. I checked with Olympia and they do not allow balloon payments at the mortgage maturity. Is there a Trust administrator that deals in Alberta arms length mortgages that allows for a one time payment at maturation? I note that this strategy is offered as one to maximize cash flow both at REIN and in Monte`s article in Canadian RE (June 09). Thanks for the help. Ciao,
Paul
Hi Paul,
Olympia does actually allow balloon payments, however, they also require a "market competitive" interest rate to be paid at least on an annual basis. Prime is currently at 2.25%, and when I asked "what is competitive?", they didn`t have a solid answer but gave a guideline of prime + ~1%. I believe it is there way of making sure the account remains "active".
With our last RRSP mortgage, we agreed on 10% annual interest rate for a 5 yr (open) term, with 4% due annually, and the remaining 6% to accrue and be paid as a balloon payment at the end of the term.
Hope this helps!
Paul
Hi Paul,
Olympia does actually allow balloon payments, however, they also require a "market competitive" interest rate to be paid at least on an annual basis. Prime is currently at 2.25%, and when I asked "what is competitive?", they didn`t have a solid answer but gave a guideline of prime + ~1%. I believe it is there way of making sure the account remains "active".
With our last RRSP mortgage, we agreed on 10% annual interest rate for a 5 yr (open) term, with 4% due annually, and the remaining 6% to accrue and be paid as a balloon payment at the end of the term.
Hope this helps!
QUOTE (benho2006 @ Jan 16 2010, 07:07 AM) Is it possible to lend yourself an RRSP mortgage and would it be even practical to do so?
yes, if it is CMHC insured.
question is: do you wish to pay a high % or a low one ?
better: get a low mortgage @ 4% .. and invest to make MORE than 4% which id VERY doable in today`s market !!
yes, if it is CMHC insured.
question is: do you wish to pay a high % or a low one ?
better: get a low mortgage @ 4% .. and invest to make MORE than 4% which id VERY doable in today`s market !!
Thomas has a very good point. Holding a mortgage in a RSP at a low rate is not a very smart investment as RSPs go.
I am not sure why anyone would want to do it unless it is there own RSP and they have no other possible source of money. Still a poor investment I think.
I am not sure why anyone would want to do it unless it is there own RSP and they have no other possible source of money. Still a poor investment I think.
QUOTE (ThomasBeyer @ Jan 16 2010, 08:03 PM) yes, if it is CMHC insured.
question is: do you wish to pay a high % or a low one ?
better: get a low mortgage @ 4% .. and invest to make MORE than 4% which id VERY doable in today`s market !!
I thought that RRSP mortgages had to be to someone else at arms length. Can you clarify?
question is: do you wish to pay a high % or a low one ?
better: get a low mortgage @ 4% .. and invest to make MORE than 4% which id VERY doable in today`s market !!
I thought that RRSP mortgages had to be to someone else at arms length. Can you clarify?
QUOTE (invst4profit @ Jan 16 2010, 09:48 PM) Thomas has a very good point. Holding a mortgage in a RSP at a low rate is not a very smart investment as RSPs go.
I am not sure why anyone would want to do it unless it is there own RSP and they have no other possible source of money. Still a poor investment I think.
Perhaps this is where a low annual repayment and balloon payment at end of term make the most sense. especially if you are confident in your own RE investment purchase.
does anyone know the answer to the arms-length question?
ben
I am not sure why anyone would want to do it unless it is there own RSP and they have no other possible source of money. Still a poor investment I think.
Perhaps this is where a low annual repayment and balloon payment at end of term make the most sense. especially if you are confident in your own RE investment purchase.
does anyone know the answer to the arms-length question?
ben
I have some capital tied up in an RRSP. I was thinking of pulling it out an paying the tax hit to use the money for future investments as I thought an RRSP mortgage had to be to another party at arms-length. Can anyone clarify that there is a legitimate way to access my own RRSP capital to create a mortgage?
QUOTE (RCrein @ Jan 19 2010, 03:06 PM)
I have some capital tied up in an RRSP. I was thinking of pulling it out an paying the tax hit to use the money for future investments as I thought an RRSP mortgage had to be to another party at arms-length. Can anyone clarify that there is a legitimate way to access my own RRSP capital to create a mortgage?
many options:
lend to a 3rd party
lend to yourself with CMHC insurance (this makes sense only over $250,000 considering fees, account setup and annual admin costs)
invest with a 3rd party such as public or private REITs,
invest in a JV
invest in a public or private real estate investment firm
invest with a MIC
8 mistakes to avoid in real estate syndications: http://myreinspace.com/public_forums/Real_Estate_Discussion/62-13817-Real_Estate_Syndications_-_A_Good_Idea_.html
http://myreinspace.com/rein_members_only/Members-Only_Discussion/81-14020-RRSP_second_Mortgages.htmlTopics with RRSP + Mortgage relevance in REIN
I have some capital tied up in an RRSP. I was thinking of pulling it out an paying the tax hit to use the money for future investments as I thought an RRSP mortgage had to be to another party at arms-length. Can anyone clarify that there is a legitimate way to access my own RRSP capital to create a mortgage?
many options:
lend to a 3rd party
lend to yourself with CMHC insurance (this makes sense only over $250,000 considering fees, account setup and annual admin costs)
invest with a 3rd party such as public or private REITs,
invest in a JV
invest in a public or private real estate investment firm
invest with a MIC
8 mistakes to avoid in real estate syndications: http://myreinspace.com/public_forums/Real_Estate_Discussion/62-13817-Real_Estate_Syndications_-_A_Good_Idea_.html
http://myreinspace.com/rein_members_only/Members-Only_Discussion/81-14020-RRSP_second_Mortgages.htmlTopics with RRSP + Mortgage relevance in REIN
QUOTE (RCrein @ Jan 19 2010, 04:06 PM) I have some capital tied up in an RRSP. I was thinking of pulling it out an paying the tax hit to use the money for future investments as I thought an RRSP mortgage had to be to another party at arms-length. Can anyone clarify that there is a legitimate way to access my own RRSP capital to create a mortgage?
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