How does WMIC find mortgages to invest the MICs money in?
WMIC uses its’ large network of broker contacts to continually fund mortgages within the WMIC. Our qualified underwriters screen applications and only approve mortgages that meet the funds’ criteria as approved by management. Generally speaking, these applications are from individuals or corporations that have an immediate need for a mortgage, however, for many different reasons, they do not qualify with the bank at this time. Examples are as follows:
- Credit cards are fully extended: credit has been damaged due to sickness, marital break up or being out of work. Client is now back to work, healthy / happy and has the income stream to service the mortgage
- Payments on credit cards have been delinquent due to various reasons
- A business has the opportunity to purchase a property, however, the bank was unable to process their required loan quickly enough
In all of the forementioned situations, WMIC works with the clients to guide them and help find ways to re-establish their credit (if required) in order to qualify with the bank at a later date at prime interest rates.
What risks are associated with investing in a MIC?
Although real estate investing is considered one of the safest investments, risks still exist in mortgage lending. All property investments are subject to elements of risk. Property value is affected by general economic conditions, local real estate markets, the attractiveness of the property to tenants, competition from other available properties and other factors. While independent appraisals are required before the corporation may make any mortgage investment, the appraised values provided therein, even where reported on an “as is” basis, are not necessarily always reflective of the market value of the underlying property, which may fluctuate.
The MICs’ income and funds available for distribution to security holders would be adversely affected if a significant number of borrowers were unable to pay their obligations. Upon default by a borrower, WMIC may experience delays in enforcing its’ rights as lender and could incurr costs in protecting its investment.
To mitigate these risks, the experienced team of underwriters at WMIC carefully review every application to reduce the possibility of non-performing loans. Furthermore, strict loan to value guidelines ensure enough equity is available to recover outstanding loan balances in case of foreclosure.
When can I redeem my shares?
Investors are able to redeem all or a portion of their shares upon sufficient notice and subject to the rules set out in the Subscription Agreement / Corporate Articles. Usually, amounts of $25,000 or less can be withdrawn with a few days notice. However, redemptions of $100,000 or more require six months notice. See Subscription Agreement for more details.
How is WMIC compensated for administering the WMIC ?
Westboro Management Ltd. administers the MIC via a Management Agreement signed between WMIC and Westboro Management Ltd. As part of this agreement, Westboro Management Ltd. receives a 2% management fee based on the outstanding asset balance of the portfolio on the last day of each month. A 1% bonus can be earned if the investors have received a return equal to the Bank of Montreal 5 year GC rate, plus 4%. WMIC is responsible for legal, accounting and investor relation costs.
How often do investors receive information on the MIC?
Investors receive audited financial statements within 90 days of each financial year-end, which is May 31st. A six month report is also provided each January.
Are there any costs associated with investing in the MIC?
No broker or referral fees are charged and 100% of your investment goes directly to the WMIC fund.
What type of mortgages does the MIC invest in?
The MIC focuses on residential mortgage loans primarily in the Ottawa/ Ottawa Valley & Outaouais area. Commercial loans are also included in the Portfolio when they would be of benefit to the MIC. The majority of mortgage receivables are comprised of residential 1st mortgage with the balance being made up of 2nd mortgages. Almost all mortgages in the MIC have a one or two year term and are renewable at the borrower’s discretion. The MIC usually earns 3 months interest penalties on mortgages paid out before the end of the term.
Why doesn’t my Financial Advisor recommend investing in a MIC?
Your Financial Advisor is most likely paid in one of two ways; by commissions when you initially purchase investments, or by trailer fees on investments he or she purchased for you in the past. WMIC does not pay Financial Advisors fees for selling shares in the MIC. Therefore, your Financial Advisor has no financial incentive to recommend the MIC.
What is the expected return of the MIC?
It depends. However, within the current interest rate environment, returns in the 8 % – 9% range are reasonable to expect. Talk with a WMIC representative to learn more about what determines the rate of return earned by the MIC.
How do I start investing in WMIC?
It’s easy. Call Don Paterson today at 613-729-5764 ext.224 to discuss how you can invest.
Is WMIC the right investment choice for me?
Investing in MICs is not for everyone. Your current net worth, income needs and risk tolerance are just a few of the many factors to determine if this is the right type of investment for you.
We would be happy to sit down with you to discuss your potential investment in WMIC.
What are the benefits of MIC investing?
- Real Estate Security: Mortgages purchased by the MIC are secured by Canadian Real Estate.
- RRSP / RRIF Eligible: Hold your WESTBORO MIC in a self-directed RRSP or RRIF.
- Superior Returns: Earn 8% – 9% per year compared with 2% on GICs
- Professional Management: The principals of WESTBORO MIC have a combined 60 years of mortgage & investment experience.
- Diversification: Investors own a diversified portfolio of mortgage loans.
- Regular Income: Investors receive their dividends on a monthly basis.