“A house that’s worth $1.5 million might follow a first mortgage of $800,000 with a $200,000 second. The exposure on the house is $1 million, and the probability the house will drop from $1.5 million to $1 million is very unlikely. Meanwhile, we’re charging 10 per cent on that second mortgage,” he says.
A good return by all accounts
For those seeking returns similar to the stock market without the associated risk, private mortgages offer a two-in-one solution: Historical NAV stability and returns that can deliver twice that of bank deposits.
“Retail clients can hold their Antrim MIC in a self-directed RRSP, TFSA, or RRIF,” says Granleese. When investing with an RRSP the investor has their trust company or financial institution deposit funds on their behalf into the MIC. For a typical $25,000 investment the investor receives a preferred share certificate in the amount of 25,000 preferred shares with a par value of $25,000.
Antrim’s management team purchases select mortgages with these funds. They also maintain cash within the portfolio so that existing investors can redeem their principle amounts according to a T+2 policy, something other MICs will not offer.
A simple solution
Antrim’s fund offers top shelf liquidity, stable income surety, and two-business day buys and sells. Clients can take dividends in cash, or direct returns toward more shares. Recalling the former $25,000 hypothetical, during a period where the dividend rate is 6 per cent, the fund would yield $1,500.
