Canadian Realestate Magazine forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Second Mortgage Investment Opportunities

Notify me of new replies via email
Mylendingspace | 16 Jan 2016, 03:08 PM Agree 0
We are one of the largest lender network in Canada, and we have strong second mortgage deals almost every day that fit the following criteria:

GTA and surrounding areas
LTV 55-85%
8-12% annual return
deal pipeline per year is 25M

sign up at signup@mylendingspace.com to get notified of our deals when they come in
or go to mylendingspace.com

After you sign up to our email, below is a taste of typical deals that we post to our network of lenders every week

Deal 1:
Property Type:
Single Family Residential House
Location:
Mississauaga
Appraised Value:
520,000
Requested Second Mortgage Amount:
40,000
Min Invest Amount for This Deal:
20,000
LTV:
82%
Return for Investor:
12%
Deal Status:
Funds committed within 24 hours

Deal 2:
Property Type:
Single Family Residential House
​Location:
Markham
Appraised Value:
900,000
Requested Second Mortgage Amount:
240,000
Min Invest Amount for This Deal:
80,000
LTV:
70%
Return for Investor:
9%
Deal Status:
Funds committed within 24 hours

Who Are WE?

We are one of the largest second mortgage lender networks in Canada; We are all lenders just like you. Join us! Either sign up or email us at signup@mylendingspace.com

​​Why Do Borrowers Need Second Mortgage?

Due to a variety of reasons such as debt consolidation, temporary employment change, damaged credit, divorce etc., home owners need to take equity out of their houses but banks are not willing to lend more money than their existing mortgage. Therefore borrowers come to private lenders such as us.

Annual Return for Lenders:

8-12%, depending on which deal you decide to invest in.

Why Lend Second Mortgage?

Lenders Are On Title of the Property

Mortgage Term is 1 Year or Less

All properties are in Greater Toronto Area and surrounding areas

LTV (Loan to Value) is at or below 85, meaning each property has at least 15% owner equity; if market falls the owner's equity is the first to get hit

No Extra Work is Needed - Just sign investor disclosure forms electronically

Lenders send money to lawyers' trusted account directly and lawyers execute the entire deal


What Fees Lenders Need to Pay To Invest in Any Deal?

Lenders pay NO FEE. Borrowers pay all the fees.

​How Are Interest Paid?

Upon deal closing, lawyers will send the package to lender's mailing address containing title document and 12 posted cheques (if it's a 1 year term); lenders just need to deposit the cheque every month

​How are Principle Paid?

Upon the maturity of the term, mortgage broker will refinance the mortgage to pay out the existing second mortgage lenders; again lawyers will handle the entire discharge process and disburse the final amount directly to lenders
  • | 21 Jan 2016, 10:58 AM Agree 0
    it sounds simple, this is likely a US version of sub-prime or sibling.

    Can you present me with an illustration to the 2nd mortgage lender how to get their money back in case the property needs to be liquidated , as the worst case scenario ?? The bank needs to power-sale the property. I wonder what the sale price it will eat into the principal of the 2nd mortgage lender, for the lack of better words

    • Tomthemoneymaker | 29 Jan 2016, 09:51 PM Agree 0
      I am a senior investor in equity lending for the past 30 years and I totally agree with what Mylending space has posted.
  • Mylendingspace | 23 Jan 2016, 12:16 PM Agree 1
    Thanks for your question. This differs from the sub-prime mortgage crisis in the sense that the Canadian banking system for first mortgages is robust and the requirements for obtaining a first mortgage are high. In addition, no swaps and other derivatives are created on top of the first mortgages, so it is impossible for the Canadian economy to tank like the US did in 2007.

    When a transaction closes, the law firm will put the lender's name on the title of the property, giving the right for the lender to trigger power of sale in certain circumstances. The lender is then given pre-authorized cheques as soon as a transaction closes. He/she deposits cheques on a monthly basis. If a cheque is deemed invalid at a branch, he/she should contact us immediately and the lawyer representing the lender will deliver a formal letter to the borrower to look for a resolution in 15 days. In most cases, the borrower is able to resolve the issue and the cheques become valid again. In the case that the borrower cannot resolve the issue in 15 days, there are three paths that the lender can take:

    I. We help the lender find a buyer in the secondary market. This new person will take over the second mortgage, at the price that equals to the face value of the second mortgage plus any unpaid interest income since inception. There are many investors who are in the secondary market as they can demand higher interest rates with the borrower and/or they can trigger the II and III below for profit.

    II. We convince the borrower to sell the house on behave of the lender.

    III. We sell the house on behave of the lender.

    The transaction cost for the options II and III is around 6%, meaning if there is no change in the real estate price, as long as the pro-forma LTV is below 94%, you will not use your principal. Your profit can be as much as the unpaid interest income. This type of investment opportunities are very safe in the next few years, given the strong demand in freehold properties in the GTA and weakened Canadian dollars. However, if you have an extremely pessimistic view on the GTA real estate market (the view that the market will decrease by at least 20% in the next 12 months), we advise you not to invest in this type of opportunities.

    We welcome other questions and should you be interested in receiving deals, feel free to register at mylendingspace.com

    Hope this helps,
    Mylendingspace

  • Dale | 31 Jul 2016, 01:29 PM Agree 0
    How can I trust a company that mistakes the word behave for behalf?
  • Dave | 27 Sep 2016, 04:45 PM Agree 0
    Bunch of predators to live off the poor
Post a reply