There is more than one way to invest in mortgages. Begin with the structure: what you would own, where your capital would be exposed and which organization provides the information.
A direct investor considers an individual mortgage opportunity secured by a specific property. The current One Stop Mortgage model describes the investor as being registered directly on title as a mortgage holder.
A Mortgage Investment Corporation pools investor capital and deploys it across a portfolio of mortgages. Investors own shares in the MIC rather than an individual mortgage on one specific property.
A direct private mortgage investment involves providing capital for a mortgage secured against a specific property.
In the direct model currently described by One Stop Mortgage, the investor participates in an individual mortgage and is registered on title as a mortgage holder.
The borrower is responsible for making the payments required under the mortgage and repaying the principal according to its terms.
The property provides security and legal rights against the property. That security does not eliminate the possibility of borrower default, delays, enforcement costs or investment loss.
A direct mortgage investment should be considered as a specific transaction, not as a generic promise of return.
Property, financing request and proposed mortgage structure are assembled.
Review the available property, valuation, amount, position and term information.
Ask questions and obtain independent legal, tax, financial or other advice you consider appropriate.
If you proceed, the transaction moves through the applicable mortgage and legal process.
The borrower is responsible for required payments and repaying principal according to the mortgage terms.
These questions do not replace legal, financial, tax or investment advice. They are a practical starting point for understanding the mortgage itself.
What property secures the mortgage, where is it located and what characteristics affect its value and marketability?
What evidence supports the stated property value, and how current and appropriate is that evidence?
How much mortgage debt sits against the property value, and how much equity remains behind the proposed investment?
Where does the mortgage rank, and what registered debt or other claims rank ahead of it?
Why is the financing required, and what borrower circumstances are relevant to the mortgage?
How long is the mortgage expected to remain outstanding, and how are interest and other payments structured?
How is principal expected to be repaid? An expected exit is a plan, not a guarantee.
Loan-to-value helps describe the equity cushion. Mortgage position helps describe priority. Neither determines risk by itself.
LTV compares mortgage debt with the value of the property securing it.
A larger equity cushion may provide more room to absorb a decline in value or enforcement costs. LTV is still only one part of the investment picture.
Position affects priority against the property.
A first mortgage generally ranks ahead of a second. If enforcement ultimately results in a sale, higher-ranking secured claims are generally dealt with before later-ranking positions.
Real estate security is important. It does not guarantee that principal or income will be received on time or recovered in full.
The borrower may fail to make required payments or repay the mortgage when expected.
The property may ultimately be worth less than expected or may take longer to sell.
Higher-ranking registered debt can affect the amount available to later-ranking mortgage holders.
Recovering funds after default can involve legal proceedings, delays and additional costs.
A direct mortgage is not a publicly traded investment that can normally be sold immediately.
An expected refinancing, sale or other exit may take longer than anticipated or may not occur as planned.
Capital may be exposed to one borrower, one property and one transaction.
Neither structure is automatically better. They are different ways of obtaining mortgage exposure and involve different considerations, risks and processes.
| Consideration | Direct private mortgage | OSM MIC |
|---|---|---|
| Investment | Individual mortgage opportunity | Shares in a mortgage investment corporation |
| Underlying exposure | Specific mortgage and property | Portfolio of mortgages |
| Review | Mortgage-specific | Portfolio and MIC-level information |
| Concentration | May be concentrated in one mortgage and one property | Capital is deployed across a mortgage portfolio |
| Investor involvement | More transaction-specific | More portfolio-oriented |
| Repayment / liquidity | Connected to the mortgage and how it is repaid or resolved | Governed by the MIC's current offering and redemption process |
| Information source | One Stop Mortgage Corp. | OSM Mortgage Investment Corporation |
Certain mortgage investments may qualify for some self-directed registered plans when applicable tax, trustee, investment and other requirements are satisfied.
Eligibility depends on the mortgage, the registered plan and the trustee or custodian administering that plan.
Before using an RRSP, TFSA or another registered account, confirm eligibility with the plan trustee or custodian and obtain any tax or professional advice you consider appropriate.
One Stop Mortgage works with mortgage transactions across British Columbia and Alberta. For investors, that experience is most useful when it makes the property, mortgage structure, security, process and questions easier to understand.
These answers explain general private mortgage concepts. Evaluate a specific opportunity using its own information, documents, risks and professional advice.
Private mortgage investing involves providing capital for a mortgage secured against real property rather than investing through a conventional bank deposit or publicly traded security. In a direct mortgage investment, the investor considers a specific mortgage opportunity and the property securing it.
The investor reviews a specific mortgage opportunity, its property security, mortgage structure and available supporting information. If the investor proceeds, the transaction moves through the required mortgage and legal documentation process. The borrower then makes payments and repays principal according to the mortgage terms.
The mortgage is registered against real property. One Stop Mortgage's current direct investor model describes the investor as being registered directly on title as a mortgage holder. Registration provides legal security against the property, but it does not guarantee repayment or eliminate investment risk.
No. Property values can change and a borrower may default. Enforcement can involve time, legal costs and other expenses. Mortgage position and other registered debt can also affect how much may ultimately be recoverable.
A default may require collection steps or legal enforcement of the mortgage security. The outcome depends on the mortgage documents, property value, registered priorities, legal process, costs and other circumstances. Recovery can take time and is not guaranteed.
Direct private mortgages are generally less liquid than publicly traded investments. Investor capital may remain committed until the mortgage is repaid, refinanced, renewed, sold or otherwise resolved according to the applicable documents and circumstances.
Certain mortgage investments may qualify for some self-directed registered plans when applicable rules are satisfied. Eligibility depends on the mortgage, plan and trustee or custodian. Investors should confirm eligibility independently before proceeding.
Direct investing involves considering an individual mortgage secured by a specific property. A Mortgage Investment Corporation pools investor capital and invests across a portfolio of mortgages. The ownership structure, concentration and investment process are different.
This One Stop Mortgage page explains direct private mortgage investing in individual opportunities. OSM Mortgage Investment Corporation is a separate pooled mortgage investment structure in which investors buy shares in the MIC.
Use the Request Investor Information option below to contact One Stop Mortgage. The initial conversation is informational and can clarify how direct mortgage investing works and what questions to ask before considering a specific opportunity.
If you want to understand direct private mortgage investing through One Stop Mortgage, request investor information and tell us what you would like to learn more about.
Requesting information does not constitute an investment commitment, investment advice, a suitability determination or acceptance into an investment opportunity.
Private mortgages are loans extended by individual investors or private firms, rather than conventional banks. They offer flexible lending solutions for those who don't meet typical lending criteria, possess unique properties, or encounter credit hurdles. This provides investors with a chance to diversify their portfolios and achieve desirable returns backed by real estate.
Currently our investors are averaging returns of 9.5%-13.99%
The exact same way banks secure traditional mortgages in British Columbia and or Alberta. The investor is registered directly on title as the mortgage holder.
There are multiple ways to invest; cash, through a numbered company, or self directed RSP, RRIF, TFSA, RESP, LIRA. Contact us to explore these possibilities and how private mortgage lending can support your investment objectives while diversifying your portfolio.
OSM accommodates investors of all types and net worths, whether you’re just starting out or are a seasoned veteran. Contact us to discuss putting your money to work for you.
Compared to other investments such as stocks or bonds, private mortgage investments typically carry a 12 month term. Over our 30 year history our lenders have come to love this type of investment and traditionally are happy to offer renewals or extensions on their investment.
