Choosing the Right Investment for your Goals

• First, ask yourself, why are you investing?
• How long do you wish to hold the investment?
• Who are you making this investment for – yourself, your children, your business?
• Are you looking to increase the size of your capital through and selling investments while being cognizant of the risks?
• Are you looking to preserve capital and generate income (monthly or quarterly)?

Your reasons for investing, who you are investing for, and how long you wish to hold the investment will determine how you invest or what type of investment you will make.

What Kind of Investments are Available

For those who are risk tolerant, there are various classes of securities on the public markets (shares/ mutual funds/ exchange traded funds/ debt instruments/ options and futures).  Public markets are exchanges where members of the public can buy and sell their investments freely through a broker or trading platform.  There may be securities traded through these exchanges that have attributes that mitigate risk, but for the most part, public market securities are not for the risk adverse.

There are a myriad of investment vehicles available for risk tolerant and risk adverse investors.  For the risk adverse investors, this article will explain some of the available options.

Private Lending and Mortgage Investing

Private lending is something that we hear a lot about, but many people do not really understand how it works. The Tri City Group Monthly Income Mortgage Trust (“Tri City” or “TCGMIMT”) is a mutual fund trust that pays monthly returns in cash or DRIP (reinvestment).  Tri City pools capital and originates loans with high quality second and third mortgages on residential and commercial real estate in Western Canada.  For more details on the private lending criteria, please visit: www.hpcpl.ca or www.tricitygroup.ca.

This type of investment spreads risk by taking mortgages on different properties across many markets/ cities, thereby providing fractional exposure  to the real estate market.

Typical clients who borrow from private lenders would include

• Small business owners who need capital to expand their business.  Business loans are very difficult and time consuming to obtain, so they often tap the equity in their homes to unlock funding.
• Real estate purchasers who have short timelines for closing that cannot be met by institutional lenders

• Purchasers who are transitioning from one property to another, but do not meet the bank requirements to carry 2 mortgages until the older property sells (i.e. – bridge lending)

• Builders looking for single family construction lending to help them complete their projects.  These clients are usually very experienced and have significant capital already invested into the project

Tri City can provide these funds if the property and the borrower pass the lending profile which includes a rigorous risk assessment of the property’s loan-to-value ratio. The Loan to Value Ratio (or LTV) is simply the total mortgage amount divided by the APPRAISED property value. The higher this number gets, the more risk there is to the lender. Tri City caps the LTV on it’s loans at 75%, and usually accepts an even lower rate to mitigate risk.  There are many other considerations that factor into the lending decisions including property type, location, debt size, and macro and micro economic trends and forecasts..

Tri City Group Monthly Income Mortgage Trust

Since 2015, TCGMIMT has consistently paid monthly returns to investors.  The projected annual return for the end of 2024 is between 8.5 – 9.0%*.  

The mortgage lending team at Tri City has worked together for many years to establish lending criteria that minimize risk and maximizes the return for investors.  Over 60% of the Tri City portfolio is in first mortgages, with the balance being in second mortgages (rounded figures).  By assessing each lending situation individually, and by monitoring the macro and micro economic conditions that influence the real estate markets, Tri City’s team is able to provide a safer loan-to-value ratio, while delivering superior returns.

If you are looking for a steady, well-managed and income-generating investment, please consider Tri City Group Monthly Income Mortgage Trust. To discover what options are available to you  please visit our website or call one of our dealing representatives  We would love to hear from you.

* E. & O.E.  Series A-3 and P-3 units only.  All returns and projections are annualized figures, assuming reinvestment of distributions.  Past figures are not indicative of future returns.  Investors should review the Offering Memorandum and consult with a financial expert prior to making an investment decision.

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