I have about 130k RRSP cash e for lending at no less than 12% for no more than 2 years based on less than 85% Loan to Value on secure quality real estate: I am hesitant to move forward as I am wondering about the security of my hard earned cash. Please Email [email protected], if you have a referral to someone trustworthy who deals in these kind of deals who gives reasonable return and also a referral to a lawyer in Toronto that deals in RRSP private mortgages. I was also wondering as to what interest rate is reasonable for short term lending (6 months to a year).
RRSP Mortgages
- Thread starter Habari
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That 12%+ expectation can be met with higher risk construction or land development projects, likely in 2nd position only behind a first.
The risk of capital loss if very high if in 2nd position, even on a buy-and-hold project, as you must be able to recover the first mortgage plus any arrears, plus legal fees to get the asset back, then be able to manage it and sell it.
Feel free to read these two posts here on "guaranteed returns" and on mistakes to avoid investing in real estate syndications in general.
The risk of capital loss if very high if in 2nd position, even on a buy-and-hold project, as you must be able to recover the first mortgage plus any arrears, plus legal fees to get the asset back, then be able to manage it and sell it.
Feel free to read these two posts here on "guaranteed returns" and on mistakes to avoid investing in real estate syndications in general.
I just wanted to add some food for thought about your expected returns.
In Calgary investors can get money at 12%+ all day long from non conventional mortgages lenders (ie Calvert 12.5% 2nd for 100k) for short term (such as you are looking for). Investors then are dealing with professionals who can advance funds very easily and very rapidly (granted I had an existing relationship with them but the fastest was 100k delivered within 2 hours of the phone call asking for it)
As well I just closed on a small multi with low rents and new leases that was renting under market value by about 3-400 a unit, I (my sister actually) asked for a VTB 1st for 600k at 4% for 18months and got it.
As an investor who has paid 12% repeatedly for RRSP and non-RRSP investment in the past, in this lending climate I would only pay such %'s for very very easy money. (time, effort, fees etc.)
I just think that your expectations for returns may be a little high at this time, as quality investors can get those rates quite easily thus those willing to pay your rates may have been turned down by professionals who make a living swimming in these waters
Bottom line as an individual who is in a position to meet your criteria, I feel your asking rate is too high (at this time).
Mark
In Calgary investors can get money at 12%+ all day long from non conventional mortgages lenders (ie Calvert 12.5% 2nd for 100k) for short term (such as you are looking for). Investors then are dealing with professionals who can advance funds very easily and very rapidly (granted I had an existing relationship with them but the fastest was 100k delivered within 2 hours of the phone call asking for it)
As well I just closed on a small multi with low rents and new leases that was renting under market value by about 3-400 a unit, I (my sister actually) asked for a VTB 1st for 600k at 4% for 18months and got it.
As an investor who has paid 12% repeatedly for RRSP and non-RRSP investment in the past, in this lending climate I would only pay such %'s for very very easy money. (time, effort, fees etc.)
I just think that your expectations for returns may be a little high at this time, as quality investors can get those rates quite easily thus those willing to pay your rates may have been turned down by professionals who make a living swimming in these waters
Bottom line as an individual who is in a position to meet your criteria, I feel your asking rate is too high (at this time).
Mark
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[quote user=MarkHealy]I feel your asking rate is too high .. indeed !
Unless you go into higher risk asset classes classes, or higher LTVs !
Unless you go into higher risk asset classes classes, or higher LTVs !
The League Group of Companies
League Investment Services Inc.
[email protected]
This company located in Vancouver Island. They give you 10% return for the 1st 6months and if you decide to invest with them longer, then maybe 6-8% depend on the market. Give them a call for verification.
League Investment Services Inc.
[email protected]
This company located in Vancouver Island. They give you 10% return for the 1st 6months and if you decide to invest with them longer, then maybe 6-8% depend on the market. Give them a call for verification.
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I have lent my money as 2nd mortgage to people for the purpose of debt consolidation or pay tax arrears. Those files are riskier, as the people are not credit-worthy (low credit scores). They had lots of stories (ie, divorce, injury, slow business, etc) and sometimes their homes are not in major cities. However, the LTV is low (50-70% range) and you do get 13-18%.
Although the ROI is good, beware of ROfI (return of investment), as mentioned by Thomas earlier.
Also, be prepared to handle NSF, demand letter, take legal actions for foreclosures. I have done all those in order get the file current.
Although the ROI is good, beware of ROfI (return of investment), as mentioned by Thomas earlier.
Also, be prepared to handle NSF, demand letter, take legal actions for foreclosures. I have done all those in order get the file current.
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[quote user=llee]
Also, be prepared to handle NSF, demand letter, take legal actions for foreclosures. I have done all those in order get the file current.
and if you count the time the return is far lower than the stated 12% .. if you even get your principal back !
Second mortgages or ANYTHING that offers anything over 6 or 7%/year is VERY HIGH RISK
Feel free to also read this article on `guaranteed` returns. The DOW Jones has risen about 20% the last DECADE .. or 2%/year .. and that is before management fees which is around 2% in a mutual fund .. the TSX slightly better .. so the norm to expect from stocks is 2-4% on average !!
Any investment that distributes over 5 or 6% HAS VERY HIGH RISKS ! Most corporate bonds today are in the 3-5% range .. and state bonds of quality countries even lower .. and slightly higher for more risky stocks or countries! Perhaps some Greek bonds ? Anything above 6% or so is usually return of your capital, and therefore puts the safety of capital at significant risk.
Also, be prepared to handle NSF, demand letter, take legal actions for foreclosures. I have done all those in order get the file current.
and if you count the time the return is far lower than the stated 12% .. if you even get your principal back !
Second mortgages or ANYTHING that offers anything over 6 or 7%/year is VERY HIGH RISK
Feel free to also read this article on `guaranteed` returns. The DOW Jones has risen about 20% the last DECADE .. or 2%/year .. and that is before management fees which is around 2% in a mutual fund .. the TSX slightly better .. so the norm to expect from stocks is 2-4% on average !!
Any investment that distributes over 5 or 6% HAS VERY HIGH RISKS ! Most corporate bonds today are in the 3-5% range .. and state bonds of quality countries even lower .. and slightly higher for more risky stocks or countries! Perhaps some Greek bonds ? Anything above 6% or so is usually return of your capital, and therefore puts the safety of capital at significant risk.
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[quote user=MarkHealy]
Bottom line as an individual who is in a position to meet your criteria, I feel your asking rate is too high (at this time).
Mark
Agreed! The poster mentions that she is risk adverse but wants a fairly unrealistic rate of return for todays given climate. Tell me where you would get anything close to this in todays market?
Yes, I have borrowed money at 15% for very short periods but only to very savvy investors who have played this game a thousand times before and know exactly what they are doing.
If you are looking for security either loan in first position or get an equity stake but lower your return expectations. Long term you will do just fine. Many people on this forum are putting deals together daily like this.
Bottom line as an individual who is in a position to meet your criteria, I feel your asking rate is too high (at this time).
Mark
Agreed! The poster mentions that she is risk adverse but wants a fairly unrealistic rate of return for todays given climate. Tell me where you would get anything close to this in todays market?
Yes, I have borrowed money at 15% for very short periods but only to very savvy investors who have played this game a thousand times before and know exactly what they are doing.
If you are looking for security either loan in first position or get an equity stake but lower your return expectations. Long term you will do just fine. Many people on this forum are putting deals together daily like this.