We focus on residential mortgage loans throughout British Columbia. Small commercial loans may also be included in the portfolio. We look for first mortgages and set a limit of 30% of the total portfolio for second mortgages. All of our mortgages are one-year terms that are renewable at the MIC’s discretion.
Mortgage brokers from across the province send in applications. We also use our large network of broker contacts to continually bring interesting deals to our attention. Members of our Board of Directors examine each deal carefully, screening all applications, and approving only those deals that meet our funding criteria.
The actual rate of return varies from year to year; however, in the current interest rate environment, it’s reasonable to expect returns in the 7% to 10% range. To learn more about what can affect rates of return, simply call us.
You’ll receive an audited financial statement in November, after the end of the fiscal year. Furthermore, we provide an updated statement of accounts whenever you add or withdraw funds from 460 MIC. You are also invited to contact us anytime with any questions or comments.
Yes, the minimum investment amount is $5,000 at $1/share.
Distributions are paid annually on or before November 30th of each year. For those not participating in the dividend reinvestment plan, your funds will be automatically deposited directly into your bank account via electronic funds transfer (EFT).
Yes, you can choose to have a Dividend Reinvestment Plan (DRIP), or use your distributions to buy additional shares. DRIPs are best suited to those more interested in portfolio growth rather than annual income, and are frequently used in tax-sheltered registered plans.
Distributions are taxed as interest income from Canadian sources; you will receive a T5 slip annually for use when preparing your tax return.
You can redeem all or a portion of your shares whenever you wish, provided the funds are available in the MIC’s cash account and subject to the rules set out in the Offering Memorandum. The minimum withdrawal amount is $5,000. Should you decide to redeem shares within the first 12 months of your investment, a 2% fee will be incurred on the amount redeemed. Should you decide to redeem shares during months 13–24 of your investment, a 1% fee will be incurred on the amount redeemed. Thereafter, there is no redemption fee.
Although generally considered one of the safer investments, real estate lending—like any type of investing—still carries risk.
A number of factors can influence property value, including general economic conditions, local real estate markets, competition from other available properties, and the property’s attractiveness to buyers. Although we always obtain an independent appraisal or comparative market analysis prior to funding any mortgage loan, such appraisal or analysis cannot predict what will happen in the real estate market after funding.
The funds we have available for distribution to shareholders could be adversely affected if a significant number of borrowers were to default on their loans. In such a case, we may have to incur substantial costs to protect the MIC’s investments.
To mitigate these risks and reduce the likelihood of non-performing loans, we have instituted a rigorous underwriting process. Not only do we analyze the underlying real estate against which we are lending, but we also analyze every potential borrower’s credit score, sources of income, and his or her ability to repay. Furthermore, strict loan-to-value guidelines increase the likelihood that enough equity is available to recover outstanding loan balances in the case of a foreclosure.