As the government has tightened lending guidelines making it more difficult to access  home equity, the demand for private second mortgage money has increased.

Many of our private lenders have come to us (for a better return) because both interest rates on savings accounts and their stock (bank) investments provide negligible returns any more. Investing in second mortgages can be very lucrative yielding returns in excess of 12 per cent.

Of course private lending carries certain ‘risks’ with it, but as experienced professionals, we help our investors mitigate those risks as much as possible with proper deal structuring, property credit assessment and credit counselling to the borrower.

Private lending typically is a short term (1,2 or 3 year) solution. Private lending requires common sense and a good understanding of the borrower’s ability (and plan) to repay the debt. An ‘exit’ strategy  is an integral part of the transaction.

Loan default and loss is actually quite rare, and our private lenders risks are well diversified over numerous real estate properties at any  given point in time. The key is not to invest too much of your investment funds in one property but rather spread it out over multiple property loans and earn additional fees.

If you have investment funds, or want to consider using some of your equity to place in private mortgages, please give us a call today.