Investment Highlights

Current Series F Preferred Shares yield is 6.18%

  • Monthly distributions payable as interest income
  • Distributions can be reinvested monthly
  • The current average weighted loan to value is less than 65%
  • Over 85% of our mortgages are first mortgages
  • Presales of over 70% are typically required
  • Developments that are financed are within a 2 hour drive of the GTA
  • Average term to maturity 18 to 24 months
  • Number of Preferred Shareholders: Over 900
  • Projects financed are:
    • Subdivisions of family homes
    • Townhouse developments
    • Low rise condominiums

Investment Methodology

  • Morrison Laurier Mortgage Corporation, through its exclusive agreement with Morrison Financial Mortgage Corporation (a mortgage administrator licensed with the Financial Services Commission of Ontario with a 28 year history), lends money to high quality developers, who are very credit worthy but too small in scale (typically 100 to 200 homes) to be of interest to the banks. In the last 18 months, however, as the banks pull back we are making loans to borrowers whom a year ago would have been bank customers.
  • As a general rule, we require that a large majority of the houses are sold with good deposits. As part of our investment manager’s due diligence, a detailed review of every purchase and sale agreement is performed. Among the many things that are reviewed, are purchasers buying multiple units, numbered company purchases, foreign purchases, and friends and family of the developer purchases. These purchases are not in the loan calculation.
  • All borrower proposals are debated and reviewed by a 6 person credit committee at the investment management level. If all is satisfactory, a loan offer is made to the borrower and, if it is accepted, the borrower pays a commitment fee of between 1 and 2 percent. Any amount over 1 % is shared with our investors.
  • Generally, it is required that the developer has 70% of his costs on fixed priced contracting. This means that the risk of cost overruns, which typically occur in the early stages of a development ( digging foundations, framing, pouring concrete as opposed to bathroom fixtures and door hard ware) are the responsibility of the developer
  • As work progresses on the building site, the borrower will draw down on his loan facility. At each draw request, a thorough review of the project is conducted by both an independent quantity surveying firm and by a dedicated internal site audit staff.
  • As the project is coming to a conclusion, an allowance for partial mortgage discharges is made as the houses are delivered to the end users. Typically, when 60% of them have been delivered, the developer’s loan is fully paid out.

 

Preferred Shares are available to qualified investors on a private placement basis only via Offering Memorandum dated January 1, 2017 (the “Offering Memorandum”). The statements contained herein are qualified in their entirety by the Offering Memorandum. The foregoing does not constitute an offer to sell or a solicitation of interest to purchase any securities in any jurisdiction in which such offer or solicitation is not authorized.