Personal Finance

Syndicated Mortgage Investment Fixed Annual Rate 9 %

  • Last Updated:
  • Jun 8th, 2015 11:30 am
Tags:
None
Newbie
Aug 8, 2014
26 posts
1 upvote
North York, ON

Syndicated Mortgage Investment Fixed Annual Rate 9 %

Hi

I have seen a lot of these type of investments being offered lately with fixed returns up to 9 % per year. Would really like to hear your thoughts and advice about this because it sounds to good to be true to me.

Thanks for you input
16 replies
Deal Addict
Jan 2, 2015
1633 posts
639 upvotes
Toronto, ON
Could you post a few links? It's difficult to comment without information.
Newbie
Aug 8, 2014
26 posts
1 upvote
North York, ON
www.9isfine.ca

I have been getting banner ads from other Toronto based firms that I will take note of.
Deal Guru
User avatar
Sep 8, 2007
10979 posts
14475 upvotes
Way Out of GTA
Getting 9% in this era of ridiculously low interest rates is either a) a Ponzi scheme or b) likely misrepresenting the risk of the loans. I think the idea that the loans are secured (as equating to lower risk) is a mirage. But with the meager returns offered by govt bonds, GICs, corp bonds in an easy money environment many will reach for these seemingly secure high return debt schemes.

Put simply these are high risk development loans. Think about it with corporate bonds of big companies yielding 3%... What type of risk are inherent in these projects if they can't get institutional debt but have to come to retail and offer 9%?

This quote make me chuckle "By avoiding bubble markets, we're able to ensure excellent returns of roughly 9 percent". From a regulatory perspective this advertising is borderline as you can't really 'ensure' 9% returns on land development schemes.
Deal Fanatic
User avatar
Jan 27, 2007
5116 posts
984 upvotes
T.
Ponzi scheme or very risky loans to people in Toronto that otherwise could not have bought a house.

Stay away.
[QUOTE]I know you are, but what am I.... ;) [/QUOTE]
Sr. Member
Feb 10, 2015
608 posts
228 upvotes
Unless you are willing to gamble that the entire principle may be lost (be it to bad loans or a ponzi scheme) you had best look somewhere else.
Deal Guru
User avatar
Sep 8, 2007
10979 posts
14475 upvotes
Way Out of GTA
All ya need to know....

"“MetroZen (Canada), a real estate development company that works alongside Zen Mortgage Corp., is not licensed to solicit mortgage business,” an official statement from FSCO reads. “FSCO has been notified that the company is soliciting the public on its website, metrozen.ca, to invest in a large-scale condo project called MetroZen located at Highway 401 and Markham Road.”

FSCO has also warned that the two individuals involved with company – President Ralph Idema and Business Development Manager Cathy Yan – are also unlicensed by the commission."

http://www.mortgagebrokernews.ca/news/f ... 82729.aspx
Deal Guru
User avatar
Mar 1, 2004
12861 posts
1485 upvotes
Pickering
cartfan123 wrote: All ya need to know....

"“MetroZen (Canada), a real estate development company that works alongside Zen Mortgage Corp., is not licensed to solicit mortgage business,” an official statement from FSCO reads. “FSCO has been notified that the company is soliciting the public on its website, metrozen.ca, to invest in a large-scale condo project called MetroZen located at Highway 401 and Markham Road.”

FSCO has also warned that the two individuals involved with company – President Ralph Idema and Business Development Manager Cathy Yan – are also unlicensed by the commission."

http://www.mortgagebrokernews.ca/news/f ... 82729.aspx
Heard about this from someone whose friend was trying to encourage him to cough up the cash. I found the dirt and the situation was avoided.
Deal Addict
Apr 21, 2014
2321 posts
1106 upvotes
Alberta
thaidan wrote: Hi

I have seen a lot of these type of investments being offered lately with fixed returns up to 9 % per year. Would really like to hear your thoughts and advice about this because it sounds to good to be true to me.

Thanks for you input
Not sure about he company, but I'm getting 10 percent annually from a company that funds second mortgages.
Member
Dec 3, 2013
256 posts
42 upvotes
I get 13% on my investments.

I am a lender that deals in second mortgages. I only lend on properties that are detached single family homes in good areas and where the LTV does not exceed 80%. Pretty much the market has to tank 20% for me to start looking at a loss. I also do not do syndication's as I like to make my own decisions that concern my money.

This type of investing is very real and very legitimate.
Deal Fanatic
User avatar
Dec 8, 2007
5550 posts
2221 upvotes
Who pays those rates on mortgages?

People with poor credit.

Youre lending to people who have poor credit already.

lol, gg.
Hydropwnics wrote:"TodayHello is a certified hustler and original gangster."
Deal Addict
User avatar
Feb 24, 2015
1032 posts
234 upvotes
Fort Mac, AB/Lambton…
TodayHello wrote: Who pays those rates on mortgages?

People with poor credit.

Youre lending to people who have poor credit already.

lol, gg.
It's a lot like a corporate bond, but it's secured with property. You're basically lending money to a real estate developer.
Deal Addict
User avatar
Jan 13, 2012
1121 posts
50 upvotes
Sudbury
I can only hope people who flip/deal real estate either ultimately:

A) end up in jail

Or

B) go bankrupt



They are 99% of the reason our RE market is overheated.

If you can't get a normal mortgage from a bank or a credit Union, you don't deserve home ownership, period.
Deal Fanatic
User avatar
Oct 9, 2008
5684 posts
2251 upvotes
Thornhill
Wow...

This thread should really be deleted by mods to ensure not even 1 person gets fished into this scheme.
Deal Guru
User avatar
Feb 2, 2014
11233 posts
3352 upvotes
Toronto
"Syndicated Mortgages" are basically loans to developers for their projects. The returns vary greatly. I've also told my clients that it's a poor investment compared to other options. A syndicated mortgage has very little security compared to a standard residential mortgage. For example, 2nd mortgage rates start at 10%...and although the borrower may have poor credit, at least the loan is secured by property that is very liquid.

If you're going to invest in a mortgage, I would suggest loan private money on a residential mortgage as opposed to a development project. The risk-return is better.
thaidan wrote: Hi

I have seen a lot of these type of investments being offered lately with fixed returns up to 9 % per year. Would really like to hear your thoughts and advice about this because it sounds to good to be true to me.

Thanks for you input
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Deal Addict
Feb 20, 2008
2674 posts
801 upvotes
Some of these are probably legit investments - e.g, Romspen.

That said, you would need to be an accredited investor to get in on these.

I just buy REIT ETFs and that's enough for me.

Top