The Cannect Mortgage Investment Corporation is direct to the borrower. We are a lending company and a brokerage, so we don’t pay third parties to send us loans to fund. Have a listen to hear the benefits of doing this:
As I’m sure most of you know, interest rates are rising quickly as the central banks around the globe try to combat inflation. Canadians are starting to feel the pressure of rising rates and it is very likely we will see them increase further. With increasing rates will come decreasing property values. Many of you have been listening to our podcasts and reading our newsletters for years now. You know that this market shift is something we have been anticipating.
As an investor in the fund there are some things you should know.
- First and foremost, you should know that Cannect is prepared for this. We have been moving to a more defensive position for the past 6 months.
2. As I write you this email you should know the following data points about our portfolio:
3. Just under 20% of our portfolio is in cash.
4. Approximately 30% of our portfolio is in first mortgages below 50% LTV.
5. The Loan To Value of the entire portfolio sits at under 49%.
6. Cannect has a $2 Million subordinate investment in the Fund, which means we will absorb any losses up to $2 Million.
These data points should make you confident in your investment with Cannect.
We lend prudently and defensively. Our number one priority is keeping your investment safe. We believe that this market will present opportunities, but we are in no rush. We are waiting as the interest rate increases take their toll on property values. Once this happens, we believe we’ll see an excellent lending environment.
We see this as a strong opportunity to grow our portfolio as many Mortgage Investment Corporations who were lending imprudently exit the market. For many years, we have warned of unsustainable lending practices at some of our peers. Those decisions would impact investors when interest rates began increasing and property values began decreasing.
This is what is now happening. We will continue to find strong borrowers with credible exit strategies and good equity positions to help through this economic turbulence. Should you have any questions, please don’t hesitate to reach out.
Marcus Tzaferis and the Cannect Tea
