More on Lending - Syndicated Mortgages

Real estate developers may not qualify for traditional mortgages, and money doesn't grow on trees.  Fortunately, a group of investors can combine financial resources to provide secured mortgages to developers or individual borrowers.  Bringing together individual lenders to build a large mortgage loan is called syndication.

Westpoint Capital provides a comparison of MICs vs. syndicated mortgages on their site.  The potential return on syndicated mortgages is greater (often over 10%) but the risk is also greater due to limited diversification.  They offer a choice of mortgages to participate in and these can range from mortgages on raw land for potential development to mortgages to individuals on private homes for various purposes.  Terms can be 1 or more years but payments are made only at the end of the term.

Tier 1 Transaction Advisory Services Inc also offers syndicated mortgages on developments ranging from condominiums to residences with health care services to vacation time-shares.  Examples of current and past projects are on their site.  Returns are typically 8%, paid monthly, with a 4% per year end of term bonus.  Terms are usually up to 4 years.  Investments are RRSP, TFSA,  and RESP eligible - a tax effective way to hold these interest-bearing investments!