Private Mortgages Investment Opportunity

Join Claire Drage and team to learn more about what Windrose Capital is and how it can help you achieve your long-term wealth goals.

The Windrose Group has launched its own Mutual Fund Trust that provides loans in the way of private mortgages for real estate investing. A more simple way to invest without having to go directly to a borrower.

Laurel: Claire actually presented The REITE club event five years ago. It's pretty, we've had a long and profitable relationship with Claire in many ways, both firstly Daniel and I and the REITE club. She's a fabulous presenter. She really knows her stuff. She's a mortgage and financial expert. She's the largest broker you go to when you hate to go to see mortgage brokers. She's the one who talked to the CEO of The Windrose Group for over 30 years in the industry. Claire is the top 1% mortgage broker with her own large team of mortgage agents. She's an elite trainer and a real estate investor.

Chad Robinson has 25 years of experience in the mortgage and real estate industry. He comes from a second-generation real estate family. I don't know, maybe there's going to be a third generation. We'll have to ask him what way he brings to the table a wealth of experience in the broker space and he has funded over a billion dollars in mortgages. It's actually a billion. How many is it or how many zeros after it is that eight now? I don't know, it's just a lot of zeros. He's experienced in roundup property development and then together they're presenting private mortgages investment opportunities.

The windrose Group has launched Windrose Capital Inc, which is a new and simple way to invest in real estate. Good way to go. Claire, make it easier for us. That's wonderful. They have their own mutual fund trust that provides loans in the way of private mortgages for real estate investing. It's a simpler way to invest without having to go directly to a borrower and it can help you achieve whatever your long-term wealth goals are. Welcome.

Claire: Thank you so much, Laurel.. It's always such a pleasure and has it really been five years? Since that first meeting of the REITE club? Wow, I don't know where this week has gone in Midland the last five years. Thank you. I'm super excited to be presenting this evening. Many of you will know me as part of The Windrose Group of companies, mortgage brokers and mortgage alliance team. As Laurel mentioned, super excited to launch Windrose Capital Inc and the first of our investment products on the shelf. That's what we're going to talk about this evening.

Before we dive into that, just to remind you of the fabulous mortgage brokers we have on The Windrose Group, Angie Pettyjohn, Amiel Jelinek and Pieter Mazereeuw. All of which run this evening, I'm sure they'll join us for the networking. Let's dive straight into it. I think a lot of people are looking at what their investments are doing? Is the market right to buy? Can you buy what is available to buy? And the analysis of all of that is of course, yes, there's lots of opportunity, but we love to do it.

The Windrose Group is transforming. We believe in building wealth in stable real estate investments for both borrowers and investors. Some of you this evening might feel that this is slanted towards investors that have some money that are looking for a vehicle to get a good return. I also want the borrowers on this call this evening to think that this is an opportunity to also borrow money. When I talk a bit more about the types of borrowers that we're loaning against, that might resonate with you and you might have a need as well.

We have a disclaimer out, we're going to be talking this evening about two products. Private lending directly to the borrower and they're new at mutual fund trust, the Windrose mortgage trust. This is not a solicitation for your investment or business, and we have great contact information for you to collect and get more information and see if it's suitable for you. With that in mind, I wanted to touch on the difference between active and passive investing. Many of you will be very familiar with our three eBooks, which basically cover the spectrum of both passive investing as well as active.

I'm not talking about the accounting phrase but talking about when you're passive, you sit back, you relax, you're on the beach and making money active is where you're more hands-on, you're a landlord, et cetera. Let me give you some examples. If you're looking to build cash capital, then you're definitely on that high active spectrum because you're probably doing flips or both. This isn't an exhaustive list. Just an example of what we're going to talk about this evening, where it sits on that spectrum. You could also be looking at creating cash flow, owning real estate. That's going to create a monthly income, still talk about owning real estate. Of course that could be rent to own, buy and hold, et cetera, or a hybrid combo of that BRRRR strategy.

Now the third strategy is private lending where you're not a landlord you're actually going to loan to real estate investors or regular homeowners. This is a more passive way of investing in real estate. It's like being in the bank, which is pretty cool. We often find that some of our borrowers might start on the far right of that active spectrum. Eventually, their goal is to move into not being a borrower of private money, but actually being a lender. We're not going to be on the passive side, the left hand side of the screen this evening.

We're going to talk about two specific opportunities. The first one is a private lender and loaning directly to one of our borrowers. Literally, one of our borrowers is looking for financing on a flat portable and you have sufficient funds to provide them, facilitate you through us, a first mortgage. For example, now we're going to add that other product to our shelf this evening, which we were super excited about, which is a mutual fund trust. This is Windrose mortgage trust, which is basically an opportunity for you to invest in a pool of mortgages instead. We're going to go into that in a bit more detail or of course finally I'll go back to that previous slide, far left hand side, you could do nothing, which is really passive.

I think it hopefully gives you an idea of where these opportunities are on the spectrum. Let's talk about private lending versus the mutual fund trust that we're offering this evening. On the left-hand side, you've got loaning direct to that borrower, still passive there's a little bit more towards the active versus being in a pooled fund. With the direct to borrower, of course you have hands-on so you know who your borrower is, where the property is, get a nice information package or the windows group it's hands-on in the fact that you're involved in the decision on who you want to loan your money to and what are they going to do with that?

Tracking and monitoring that, can be really great if you're really wanting to feel like you're on the journey with your borrowers. And neither of these are good or bad. Everyone has different needs for their investment journey. These two tools will help provide that larger investment. If you're going to do a private mortgage directly with one of our borrowers, you're looking at least 140,000 is the minimum required it ought to be able to fund.

One of the reasons we started this trust is because as mortgage amounts get larger, we really felt we were potentially cutting out investors that wanted to make money in mortgages, but didn't have enough money. What other vehicle could we provide to help with those shorter terms that are typically a year, if not less. There could be downtime.

If you gave one of our borrowers a one-year mortgage after nine months, they paid it back because they successfully BRRRR or flipped. Then you might have a week or two where your money is not making any money until the next opportunity is available or is placed. There could be downtime as you review deals. You might not be loading out for the full 365 days of the year. You may have some doubts and of course registered funds are eligible, RSPs, TFSA, LIRA, etc. so that's private mortgages loan indirectly to a borrower. I think that summarizes nicely. Your returns will range from 10% to 12% annually, depending on the loan to value that you're comfortable with based on the information we provide.

Let's flip onto some new news this evening, which is our mutual fund trust. This is where you are basically setting it and forgetting it. Ideally, it's an investment of at least two years or more, you literally are putting it in the fund and it's going to make money and you set it and forget it. The minimum investment. This is one of my favorite things for $10,000. To get started and you also have the ability to top it up at any time, at least a thousand dollars at a time. It's really good, especially since I've had clients that have adult children or teenagers.

I really want to help them save money, but I don't want to just give them money and pray they save it. I need to protect them from themselves. They would invest in a fund like this, like obviously in their children's name, if they're of age and pop in $10,000 for them and let the kids contribute to it, maybe match it. If you like, then it becomes a great forced savings plan. They're investing in real estate without being a landlord or losing out on any of their first home by privileges. But more importantly, starting to save maybe with a plan to buy a home. It can be a great forced savings plan.

When we say forced, it just means your money is protected from you spending it. There's a drip opportunity. This dividend reinvestment plan gives you the option of not taking a monthly interest earnings, but instead reinvesting it by buying more units in the fund. If I'm supposed to get $500 a month in interest payment, instead of that, I'm just going to buy more units.

I've got no downtime, what we call no cash drag. As opposed to, if I loan out a hundred thousand from my Olympia trust account, in a mortgage directly to a borrower, when they start to make payments, it goes back into my Olympia trust account. That doesn't make me any money. It's just sitting there as long as I don't need to spend it or earn the fund. Trust might be a mutual fund. Trust might be a great option where you literally have no money as sat, not making money. Constantly reinvent a company.

Right now, the fund is not a registered fund eligible. We've just got a few more subscribers and then we applied to CRA to get registered. That's our goal to get that done as soon as possible. It gives you a bit of a difference between private lending and the mutual fund. The mutual fund targeted yield is 8% to 9%. But what I'm going to do is introduce the team as part of the trust and then have a check takeover and talk about what it's like for you as an investor. I'm super thrilled to add some amazing partners to Windrose Capital.

Myself and Chad Robinson, I'm going to let him introduce himself. But Chad, as a fellow colleague of mine, a mortgage broker. We've been chatting for a number of years. A lot of long discussions and breakfast is in dodgy places to get this up and running. Super excited to be working with Chad. We've added Adam Rose also as a Trustee and President. Massive amount of years of experience in the exempt market dealer, the OSC mix, and a fund manager, portfolio management, et cetera. And then my very own Stephanie who's been with me for over five years as our COO and also co-trustee.

Why don't I shut up now and let Chad take over and he's going to talk about it. The goal of the fund and what it's like as an investor. I'm going to jump back on and talk to you about the borrowers. Anyone that's a borrower on our webinar this evening, you'll definitely want to hear a bit more about that. Chad, I'm going to be your fan. The floor's all yours.

Chad: Thank you so much, Claire. I really appreciate it. I apologize everyone if you hear some Google maps talking in the background and we're families currently driving down the 401 and we got way late on the way to Toronto. The goal of the fund is really to provide that stable, secure, and superior investment returns to our investors. One of the amazing things about being part of a pool is that versus being direct, is that your mortgages, your investment is spread over a big pool of mortgages both geographically and to the board. Provide a lot more stability. None of our files have had any and our other funds as well as a lot of Claire's clients have very low default rates.

This way, if something bad happens to one individual file, it doesn't affect the investments overall. It gives a lot more stability. As Claire mentioned, there's very little to no cash drag as your money's reinvested immediately on a drip and redeployed very quickly, all the more. What did the fund do? The fund invests this one very specifically. Claire, then to talk to the board profile a little bit more, but a very narrow set of clients that Claire puts through this very rigorous process to make sure that we're investing with the right people in the right locations through Ontario and a little bit later throughout Canada for the right type of borrowers.

As it says, it reduces your risks and the beauty is that it can be, as Claire mentioned as middle list, $10,000 to get in. We're retargeting eight to 9% minimum, $10,000. It will be RRSP eligible, not just RSPs. I really liked this for our ESPs. Claire, you and I talked about that a lot the other day, where sometimes this small investment with RSPs compounding for 15, 20 years, this is a phenomenal investment that's eligible for that. Of course the drip, the wonderful of compound interest.

The fund is investing, not just in mortgages, we're investing anything related to mortgages and property flippers, which could include note loans, bridge loans, sometimes short-term loans, a whole suite of products to make sure that our investors are getting the yield that we're looking for. This is an exempt product and which means it has to go through an exempt market dealer.

I'm a dealing rep. We've been registered with Atlas one, which is our online portal to make sure that the investment is qualified for the person that we're investing in. As Claire mentioned earlier, it's a minimum of two years. This is the kind of money you want to put in and take out in two or three months. We talked with all of our investors individually to make sure that the investments were appropriate for them. It's a little bit of a long term heroic.

Claire, you might be able to talk a little bit more to this than me as I'm your borrower and it spans pretty much right across Ontario and some small loans to larger properties. They're all highly vetted in highly sophisticated and professional flippers. That's one of the reasons I like to join and have fun with Claire because she's such an expert.

Her client profile. It's quite amazing. I've seen so many other brokers that I've worked with over the years that don't have the same kind of quality underwriting and systems in place because Claire and I are both very systems people. It was a natural fit for the two of us to get together and make sure that we can roll this out to both your borrowers and your investors.

Claire: The types of borrowers. As a borrower, you're not going to really care where we get the money from, to be honest with you. Whether it's directly from one of our lenders or it's part of the pool, it really will make no difference for the bio line, other than who can come to the Windrose Group and apply for a mortgage, for example, or financing on their portfolio. We are looking for borrowers that have good to excellent credit. They're looking to build a well-established real estate portfolio.

I have already demonstrated their ability to execute on the acquisition and exit strategy. If you're looking to go from two properties to a hundred this year, but you feel either you've got to divide your profit with lots of joint venture partners or you're not going to have enough capital and it's going to slow you down. Your access to capital is key and then this could be a perfect financing option. We will consider up to a hundred percent loan to value of the purchase price, allowing people to really scale and not have access to cash store them.

We have a very effective cash flow model. We're always looking at the exit strategy, whether it's a refinance or it's a sale, what are the net numbers at the end? We did work with that bottle to pre-qualify them. We will pay for you to help. I'll warn you now, but once you're in, it's unlimited capital. As long as each deal still makes sense and aligns with the reason why you're buying it. We'll provide ongoing coaching and accountability.

This is financial coaching and accountability. We're not real estate coaches. They're amazing coaches, especially the founders of The REITE Club. Perfect coaches, we will do the financial and business strategy coaching. These are short. If you're paying 10% to 12%, you don't want to pay that for 25 years and nor should you. The whole point of this financing is a short term bridge to get you to the point where you're bankable or you're selling, and you're scaling up to that next level. Get you there much faster than normal.

We are very happy and diversified real estate markets. As in those smaller markets, it doesn't have to be a property in the GTA. We are more than comfortable in some of those smaller markets. In fact, in the chat portion that a few people had mentioned. We're going to follow up with some information in the chat portion and some contact information. We would just love an opportunity to chat, to see if any of these opportunities work for you. Whether you're an investor, that's looking to deploy some capital. That's currently not making you money and or you're a borrower. That's wondering if we could be a good fit to help you scale your portfolio.

Thank you so much, Laurel, for allowing us to chat. I know, you're going to hear a little bit more from Chad later on and more than happy to stay on for the question at the end, because I'm sure people have got questions about interest rates. That seems to be the hot topic today.

Chad: One thing I wanted to mention. Just before we switch off of their Claire is to invest in the fund. One of the common questions we get is very easy. It's an online platform that takes less than five minutes. If there is somebody who would like that kind of information, just drop it in the chat or declare myself and we'll get that information to you right away.

Laurel: That's great. Thank you. There are some questions and I don't think we're going to get through all of them, but again, at the end, stay until the end with the virtual networking because Claire and Chad will be there to talk to you to answer the questions. Let's just go, we'll do a few questions here but there's one question on, I knew this was going to come up because the elephant in the room is that interest rates have gone up today.

It's not exactly a big surprise, is it? They've been talking about it for weeks and months and wow. What did it go up? Not exactly a lot expected. It's still free money. Let's face it. It's still free money. One of the questions was as interest rates go up because they will gradually increase over the next little while. Is that going to affect the returns or how will that affect the returns?

Claire: Maybe Chad can add to this too. The answer is yes and no. Chad and I have been doing this for 20, 30 years between us. When it comes to private mortgage rates, they don't typically change that much. Therefore, if the funds are being used to fund private mortgages, 80% loan to value, they've been at 8% interest rate with us for 15 years, despite rates going up and down. Private mortgages don't tend to fluctuate half as much, not even 10%, as much as the average market with a variable or a fixed term.

How much the fund is actually funding, and the spread and the yield within that can definitely increase the targeted yield. However, the targeted yield for the fund is eight to 9%. As an investor, I would say, be prepared for eight, if you're in the fund. But again, knowing that is just an overall. It's not necessarily your net return because you could net way more than that because of the reinvestment each month. You've got no cash drag versus a mortgage. You could have a gap and you've got money set. Your interest is not making you any money. Chad, did you want to add to that? Because really it's not relative, right?

Chad: Definitely, not directly correlated. One thing I have noticed over the years is when interest rates do go up as private lenders. We end up earning a little bit more because the banks tighten up. There's more demand for private money. The other thing about the fund and private lending, we're short term, we're less than a year. If rates really went up, let's say prime, which it won't happen, but it goes to 7%. Private mortgage rates would go up to 14 or something. But that doesn't happen for a long time and we don't expect it either.

Laurel: That makes sense. I think it takes care of the mortgage at least, or the interest rates and I'm sure there's still questions about it, but at the end of the virtual networking, you have more questions about that then just ask the question just whatever. What determines how much the return will be, and it will like, do you I guess you alluded to that. You said that generally they're 8% to 9% historically. They've been that and that's what they will be. Are they, do they, will they, do you see them going up? If they want to set it, if the bank rate goes up to 7%, but that's God, that could be years from now. If I ever, I remember the days of the 20% markets, but we don't talk about that.

Claire: The targeted yield is 8% to 9%, so that's the yield and return to the investor. All fees are already included in that targeted return. When we say 8% to 9%, that is net to the investor to the unit holder. If you like the trust, because in essence, you're buying units or shares. Eight to nine is the target. We've already built in the spread between what we charge our borrowers. Our borrowers are going to be at 8% interest rate plus lender fees. We've already built that because we have a very specific borrower profile. We are confident with that targeted yield, we cannot guarantee it.

I know Chad can add to this if he wants to, but we're very confident based on all the analysis we've done and the 10, 15 years I've been doing this based on our history of doing it, one-on-one building it into a fund to just make great sense for us. Nothing's guaranteed. You know about, have we mitigated as much risk and is that our target? Absolutely yes, because to answer another question, our fund needs to be competitive in the fund market, against REITs and other mutual fund trusts.

It's really important that we are competitive and that's why we've partnered with Chad and Adam and Stephanie to make sure it's a very specific profile. If we were loaning directly to regular homeowners, then there's going to be some volatility with regard to outside interest rates and influences but that's what makes this fund unique. It's for investors, for investor borrowers, and that's the attraction, not only for us, but for people that want to invest in the fund. Chad, do you want to add? I know we've probably only got about 30 seconds left before we have to cut it off. Anything you want to add?

Chad: No, I think that was really phenomenal. Thank you for having me.

Laurel: I know there's going to be lots more questions and as you were speaking, I thought, okay what about this? But at the end, we'll come back and in the networking, we'll talk about why you don't ask as many questions as you want. We do have all the questions in the chat. We'll be sure to get these as many questions as we possibly can. Thank you, Claire. Thank you, Chad. That was wonderful.