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A Syndicated Mortgage allows several smaller investors to combine their
resources to fund large-scale real estate development projects via a mortgage
instrument.
WHAT IS A SYNDICATED MORTGAGE?
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A Syndicated Mortgage is an investment where there is a contractual
agreement between you the LENDER and the BORROWER (DEVELOPER). It
has a DEFINED TERM with a FIXED interest rate and a charge against the
property.
• Your mortgage investment has a
charge against the land and
building.
Every investor has their full face
amount registered in their favour at
the Land Title Office with a direct
charge against the property as
collateral.
• Syndicated Mortgages will be
subordinated to construction
financing which will be provided by a
bank.
WHAT IS A SYNDICATED MORTGAGE?
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A Syndicated Mortgage allows you to use your registered funds to invest and
mitigate risk by including an asset backed by real estate.
Stocks Bonds Cash Real Estate
WHAT IS A SYNDICATED MORTGAGE?
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LTV 70% to 80%
HOW TO INVEST L IKE THE BANK
50%
100%
Construction
Loan(Hard Cost)
Investments(Soft Cost)
25%
25%Equity
© 2011-2012 TIER1 Transaction Advisory Services Inc. | All Rights Reserved.
IS THIS A NEW CONCEPT?
• Syndicated Mortgages have been around for decades, but
have typically been reserved for wealthy investors.
• Syndicated Mortgages have been responsible for financing
large scale developments in all major cities across this great
country.
• It is only within the past few years that Syndicated Mortgages
have become available to the larger public, and as a result,
Canadians are transferring Millions of dollars from
underperforming RRSPs into this superior investment vehicle on
a monthly basis.
• DON’T LET YOUR SELF GET LEFT BEHIND !
© 2011-2012 TIER1 Transaction Advisory Services Inc. | All Rights Reserved. 5
TIER1 Advisory’s Syndicated Mortgage product gives you a unique
opportunity to invest in institutional grade, high-profile, large-scale real estate
development projects not usually accessible to individual retail investors.
We ensure the structure of the Syndicated Mortgage
product gives transparency to investors.
We take measures to
alleviate risk by
conducting due diligence
on selected projects, and
develop contingency plans
for exit and favour projects
that have attractive
investment parameters.
OUR ROLE
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We ensure the transactions between parties are handled
professionally, efficiently and in a timely manner.
Investors Trust Company LawyersMortgage Brokers Developers
OUR ROLE
© 2011-2012 TIER1 Transaction Advisory Services Inc. | All Rights Reserved. 4
In their previous roles before TIER1 Advisory, our experienced
team members combined have managed Billions of dollars in
Real Estate assets and development projects. These
individuals have come together to form TIER1 Advisory. Our team
exercises a high degree of due diligence in screening the best
projects to invest in.
Management Team
CEO Raj Singh, B.Sc., MBA
Colman O’Brien B.Eng.
President
Developer
John Davies, B.Arch.
Advisor
Dennis Jewitt, CA
MOTIVATED & EXPERIENCED MANAGEMENT TEAM
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Retirement residences
• Strong demand driven by aging population (Empty
nesters deleveraging & de-risking)
• Medium scale projects; 80 – 100 units in high demand
areas minimizing execution risk
Unique opportunities
• Select condominium projects with unique appeal &
characteristics that make them attractive
• Select commercial development opportunities with
high margins of safety
WHAT MAKE US DIFFERENT
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TIER1 Advisory’s Syndicated Mortgage offers the following advantages:
• Your Principal - Your investment has a
charge against Canadian real estate. Your
Investment is registered at the Land Title
Office against the property as your
collateral.
• Fixed Returns – Your 8% annual interest
is paid quarterly, additional 4% for each
year of the contract paid upon completion
of project.
• Defined timeline - Investment terms are
typically 24 to 48 months.
• Diversification – You mitigate risk by
investing in multiple asset classes.
• Eligibility - A Syndicated Mortgage is
RRSP, RRIF, LIRA, TFSA, and RESP
eligible.
• Accessibility - allows you to invest in
projects typically reserved for large
financial institutions and the wealthy.
• Transparency - TIER1 Advisory offers
transparency on all Syndicated Mortgages
offered by the developers.
• Simplicity - The underlying investment, a
mortgage contract, is widely held and
understood by almost all investors.
Fundamentally Sound Principles of Investing
PRIMARY INVESTMENT BENEFITS
© 2011-2012 TIER1 Transaction Advisory Services Inc. | All Rights Reserved.
$-
$50,000.00
$100,000.00
$150,000.00
$200,000.00
$250,000.00
$300,000.00
0 Year 3 Year 6 Year 9 Year
INVESTMENTVALUE
$100,0
00
$1
36
,00
0
$1
84
,96
0
$2
51
,54
6* For illustration purposes
only using a 3yr term
mortgage product.
GROWTH OF YOUR INVESTMENT
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COMPARISON
Mutual Funds / Seg Funds Syndicate Mortgage
Collateral Security
Fixed Interest rate
Quarterly Cash Flow
Fixed Investment Term
Low Volatility
100% Transparency
Easy to Understand
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COMPARISON
GICs Mutual Funds Seg FundsSyndicated
Mortgage
1.2% to 1.6 % 4% to 7% 4% to 7% 8% to 12 %
© 2011-2012 Tier 1 Transaction Advisory Services Inc. | All Rights Reserved. 15
Dream Home80%
20%
100%
From Bank
From Family
HOW BANKS INVEST
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From Investor
YOU BECOME THE BANK
100%
From Bank
From Developer
LTV =70 to 80%
© 2011-2012 TIER1 Transaction Advisory Services Inc. | All Rights Reserved. 16
• The Bank places a Charge against the
property for the value of the mortgage.
• If the Mortgagor (borrower) defaults on
the mortgage, the Bank could foreclose
on the property or put it up for sale.
• If the Mortgagor sells the property, the
bank must be paid out at the time of
sale.
• As a TIER1 investor, you have the
same protections under the law.
HOW BANKS SECURE THEIR INVESTMENT
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Should something go wrong……
Real-estate law dictates that mortgage holders gets
paid before shareholders and debts of the corporation.
Banks get paid first, immediately followed by tier1
investors, then everyone else, including the developer
4% Bonus is paid, before the developer earns a single
penny in profit.
Developer never gets direct access to the funds, funds
sit in lawyers trust account.?
Checks and Balances in place to protect your clients
principal
SAFETY OF YOUR INVESTMENT
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Fund
Construction
Investor Olympia Trust Lawyer
Developer
Self Directed
RSP AccountRSP Account
Development Fund
Interest Reserve
Trust Account
MONEY FLOW FOR REGISTERED FUNDS
Funds are
Pooled
Mortgage
is Closed
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Trust Account
Proceeds
Principal & Bonus
Self Directed
RSP Account
MONEY FLOW AT END OF MORTGAGE TERM
Investor Olympia Trust Lawyer
Developer
End of Mortgage
Term
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Land in the path of growth
Condos
Sub Divisions
Commercial Real-estate
Retirement Facilities
Long Term/Alzheimer Care Facilities
BANK
Land in the path of growth
Condos
Sub Divisions
Commercial Real-estate
Retirement Facilities
Long Term/Alzheimer Care Facilities
SYNDICATED MORTGAGES
WHERE CAN THE SYNDICATE INVEST
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Q1) What is the minimum amount that can be invested?A1) $25,000 for cash or registered products, $20,000 for TFSA.
Q2) Are the returns guaranteed?A2) The returns are fixed based upon the Mortgage contract, in the same our mortgage
rate for our home is fixed.
FREQUENTLY ASKED QUESTIONS
Interest Schedule
3yr Term = 12 quarterly pay periods12 payments @ 2% = 24%; plus
End of term bonus payment @ 3 yrs x 4% / yr = 12%
Total = 36% = (12 x 2%) + (12%)
4yr Term = 16 quarterly pay periods16 payments @ 2% = 32%; plus
End of term bonus payment @ 4 yrs x 4% / yr = 16%
Total = 48% = (16 x 2%) + (16%)
© 2011-2012 TIER1 Transaction Advisory Services Inc. | All Rights Reserved.
FREQUENTLY ASKED QUESTIONS
Q3) Do Banks get involved in financing
these Real Estate projects?
A5) There are two levels of financing when
developing real estate - Soft costs and Hard
costs. Soft costs include items such as
architectural & engineering services, various
approvals & consents, inspection, equipment,
project management, insurance, and taxes.
Hard costs are all costs associated the
construction of the physical building.
TIER1 Advisory finances Soft Costs and some
hard costs, while Banks finance Hard Costs.
Q4) What will happen if the Developer goes
Bankrupt/Disappears?
A6) The property may be foreclosed under the
mortgage contract. Proceeds from the
foreclosure will be used to repay investors on a
pro rata basis. The experienced Developers that
TIER1 Advisory works with mitigate such risks.
However, if this situation occurs, the Developer
will likely lose his equity upon foreclosure
making him motivated to succeed.
© 2011-2012 TIER1 Transaction Advisory Services Inc. | All Rights Reserved.
FREQUENTLY ASKED QUESTIONS
Q5) Where is the 8% interest paid from?
A8) The Developer is required to set aside an
interest reserve at the start of the project. This
reserve allocates sufficient funds to pay the
interest due to all participants of the Syndicated
Mortgage.
Q6) What happens if the project is not
completed within the term of the mortgage
contract?
A9) The terms of the mortgage contract must be
adhered to otherwise the Developer will be in
breach of the contract. The Developer will be
open to any actions taken by the Bare Trustee
on behalf of investors within the Syndicated
Mortgage, including, but not restricted to
foreclosure. For example, Investors may vote to
extend the terms of the mortgage.
Q7) Can I get back my money before the end
of the mortgage term?
A3) No, your funds are being loaned as a
mortgage and will be used in the development
of the property. Therefore, the moneys are not
available to be redeemed until the contractual
end of the mortgage term.
© 2011-2012 TIER1 Transaction Advisory Services Inc. | All Rights Reserved.
FREQUENTLY ASKED QUESTIONS
Q8) Is the 4% Bonus guaranteed?
A10) The 4% is a contractual obligation that is
paid out to investors at the end of the mortgage
term. While this is not a guarantee, the
investors get their payment first, to the extent
that there is a profit, before the developers gets
any profit from the project.
Q9) In what position is the Syndicated
Mortgage?
A11) The Syndicated Mortgage is initially in first
position while the Developer is servicing the
land and marketing the project. Only when the
Developer reaches the construction phase of
the project will the Bank financing take first
position. The Syndicated Mortgage will then
move to, and remain in second position for the
remainder of the project.
© 2011-2012 TIER1 Transaction Advisory Services Inc. | All Rights Reserved.
RRSP PROCESS
• Complete Syndicate Mortgage
Application
• Sign off on all three Olympia Trust
forms:
a) Plan Application – required to open Self
Directed account
b) Transfer Authorization form
c) Web Access form
d) Provide copy of current account statements
from where funds are being transferred.
• Sign Mortgage Documents with
lawyer and mortgage broker.
• Interest will be paid directly into
your Olympia Trust Self Directed
account every quarterly, 90 days
from the date of closing.
• Closings take place approximately
every three weeks.
© 2011-2012 TIER1 Transaction Advisory Services Inc. | All Rights Reserved.
CASH PROCESS
• Complete Syndicate Mortgage
Application and provide a draft or
money order payable to law firm in
trust.
• Sign Mortgage Documents with
lawyer and mortgage broker.
• Upon closing, you will receive 4
cheques for the first years
interest. The first cheque
• will be dated 90 days from closing.
• Closings take place approximately
every two to three weeks.
© 2011-2012 TIER1 Transaction Advisory Services Inc. | All Rights Reserved.
Principal 100% Secured By Prime Real Estate
Define Term - 24 to 48 months
8% Fixed Rate Of Return, paid quarterly ( CASH FLOW)
4% end of term bonus
CASH, RRSP, RESP, LIRA, RIF, LIF, TFSA Eligible Investment
Become a private lender with your registered funds
Invest in projects typically reserved only for large financial institutions and the wealthy.
Face amount of your investment Is fully registered via a direct charge against the
property .
100% Transparency
Easy to understand
TIER1’S SYNDICATE MORTGAGE INVESTMENT OFFERS