Investing with Mountain Investment
Mountain Investment is a Mortgage Investment Corporation, a corporate structure that enables investors to participate in a diversified portfolio of real estate mortgages. This diversification can provide a strong return while managing the risk associated with holding a single mortgage. The business model is quite simple. Investors purchase equity shares of the corporation and management lends this pool of capital through interest-earning real property mortgages. The mortgage investment corporation then distributes revenue earned from mortgage interest through dividends to shareholders.
Mortgage Investment Corporations lend to people who are unable to access the prime credit market for a variety of reasons, including credit history, job stability and non-verifiable income. Unlike prime market lenders, Mortgage Investment Corporations assign higher weight to a person’s assets when deciding whether or not to lend. These individuals borrow money from private lenders like Mountain Investment at higher interest rates to compensate the lender for the increased risks and administration costs associated with the borrower’s credit history and other limiting factors. Mountain Investment is mainly involved in second mortgages, which offer higher rates of return and correspondingly higher risk.
Why invest in a Mortgage Investment Corporation?
As a result of the lending qualifications of the big banks, which are largely determined by the Canadian Mortgage and Housing Corporation, a private lending market has evolved. In this private market borrowers who do not qualify for traditional bank financing have an option to obtain mortgage backed financing. Mountain Investment offers products in this private market space, but interest rates are significantly higher than those offered by the banks. These higher rates price in the corresponding higher risk associated with these borrowers. Mountain Investment has a suite of tools in place to manage risk, but we are always mindful that our lending caries with it higher risk of default than bank qualified mortgage lending.
An experienced, capable investment team
The team at Mountain Investment is committed to achieving the best possible return for investors. The company’s Directors collectively have over 30 years’ experience in private lending and business, along with significant legal and business experience in real property investment and development. In addition, the interests of Management, the Board, the Directors and shareholders are closely aligned through our equity ownership and compensation structure.