As a Mortgage Investment Corporation (MIC), HarbourEdge underwrites a large diversified pool of loans, many of them short term construction mortgages. We handle all the due diligence and the paperwork involved with underwriting each mortgage.
As a class of alternative investment, MICs are an attractive choice. Accredited investors are able to take advantage of the relative stability and consistent yields associated with mortgage investments, with no administrative obligation. Over the past ten years, HarbourEdge MIC has delivered annualized returns in excess of 6.50%*.
Masters of our niche
HarbourEdge has earned the reputation of an experienced mortgage underwriter. Currently, approximately 750 investors have bought preferred shares in the HarbourEdge MIC.
A great number of clients have found us by word of mouth through family, friends and wealth advisors, a testament to the success of this alternative investment. We know our niche—small to medium-sized construction mortgages—extremely well, thanks to the experience and acumen of our Management Team.
Minimizing risk, maximizing returns
HarbourEdge is primarily concerned with Preservation of Capital by minimizing risk. We accomplish this goal through various means:
Astute fund management
HarbourEdge has successfully funded mortgages in excess of $450 million. We continually monitor mortgage concentration to ensure that no single loan exceeds 10% of the mortgage portfolio.
Another way that we protect the integrity of this alternative investment is by maintaining an average loan-to-value ratio (LTV) of 65% or less at the time of funding. What this means is that we underwrite loans for an average of 65% of the appraised value of the property in question. Maintaining a higher level of equity in the assets that we underwrite is a key measure of our ability to maintain our primary objective, Preservation of Capital.
A diversified portfolio inherently carries less risk. The HarbourEdge MIC is diversified in many ways:
● A large portfolio of mortgages
● Many different types of mortgages
● Geographic diversification within the mortgage portfolio, including Ontario and Atlantic Canada
● Many different borrowers
● Mortgages are fully secured by real estate and personal guarantees
Well-defined lending criteria
Some potentially lucrative mortgage opportunities carry too high a risk. HarbourEdge does not invest in mortgages for businesses in unproven industries, highly volatile industries, or sunset industries. Nor do we invest in condominium construction mortgages in the cities of Toronto or Vancouver.
HarbourEdge specializes in lending to specific, historically underserviced sectors of the mortgage market, generally in the form of construction mortgages, but also term and income lending. In the building industry, we underwrite smaller and medium-sized mortgages for the construction and development sector—an industry with which our Management Team is intimately acquainted.
For every new loan, we travel to the site, carry out an in-person inspection, and meet the borrower prior to finalizing the mortgage commitment. On every subsequent construction advance, senior management visit the site once again to ensure that scope of work is consistent with the draw request and that it continues to provide support for the loan.
Short term to maturity
The average term to maturity for HarbourEdge MIC’s pool of mortgages, at any given time, is approximately 8 months. This increases the liquidity of this alternative investment and reduces exposure to increases in interest rates. These two factors provide stability that longer-term mortgages cannot.
Few second mortgages
Investors benefit from minimal exposure to second mortgages, which have never exceeded 15% of the total HarbourEdge MIC portfolio.
Like to learn more? Please contact us. We will be happy to answer any questions that you may have and to walk you through our comprehensive Investor Information Package. Please note that we can only accept accredited investors as clients.
* Investment return will fluctuate over time. Past performance may not be repeated.