About AP Capital MIC
AP Capital Mortgage Investment Corporation (MIC) is a Vancouver based mortgage lending company, regulated by BCFSA, the Canadian Securities Regulators and the provisions of the Canadian Tax Act.
AP Capital MIC offers short term, “bridge” lending solutions to either purchasers of new homes or those who may need to access some of the equity in their property for various reasons. Loans are typically of 12-month duration and sometimes less. Loans can occasionally be extended for additional terms, but all loans are subject to a diligent underwriting process.
Loans are secured by way of either first or second mortgages on the borrower’s Property. These are generally residential homes, mostly single detached family homes in the lower mainland of Vancouver and through the Fraser Valley. The MIC does a minimal amount of business in areas which have been identified as having ‘higher value’ homes (e.g., West side of Vancouver) and the majority of properties mortgaged are on highly marketable properties.
The management of the MIC collectively have more than sixty years of real estate experience. They are very seasoned in assessing potential borrowers and always cognizant of risks associated with evaluating properties and the effects of declining property prices.
All property appraisals are independently conducted by the MIC’s approved appraisers, who they have dealt with for many years. Property valuations are conducted in the best interests of the MIC and not the borrower.
Mortgage applications are subject to a diligent, vigorous, and well-established underwriting process. This includes an assessment of the borrower’s overall financial situation and their ability to service their obligations on the debt
Why we recommend AP Capital MIC
Over the past nine years, we at Diversifi have developed an arm’s length relationship with AP Capital Mortgage Investment Corporation (MIC).
During this period, we have conducted, and continue to perform extensive due diligence on their business model and lending practices. We have also gained valuable insights, knowledge and understanding of the mortgage industry across Canada.
As part of our ongoing due diligence, we have also studied the comparative business models and practices of some of AP Capital MIC’s competitors. We have compared their structures, management styles, audit, governance, and reporting processes. We continue to monitor AP Capital’s business activities on a regular basis and frequently meet with staff, executive, management as well as their independent advisory board.
History & track record
AP Capital MIC has been in business for over 17 years. Since the fund’s inception in 2007, investors have consistently earned steady monthly returns with a 10-year average return of 7.75% (net of fees). The fund distributes earnings monthly in cash or shares and investors have received monthly distributions for more than 170 consecutive months. The current monthly distribution is 8.50% p.a. (Class B).
The objective of fund management is to preserve investors’ capital and mitigate risk as best as possible by adopting and implementing conservative lending practices.
Investors receive a pre-determined monthly distribution, which can either be paid in cash as part of a retirement or passive income strategy or can be re-invested by those investors seeking portfolio growth. The annual audit determines the year’s final yield, resulting in an adjustment (top-up) distribution.
Current Business model
AP Capital MIC currently manages a mortgage portfolio of more than $220,000,000. This includes significant investments by the principals and their close friends and family, as well as over 1,400 investors. The combination of investor equity and schedule 1 bank financing is used to fund the portfolio.
In addition to investor equity, the MIC principals have negotiated a line of credit from group of major schedule 1 banks in Canada, in the amount of $100,000,000. The banks maintain a stringent due diligence process on the business activities of the mortgage fund. This entails detailed monthly reporting and quarterly auditing and review of all business activity.
Additional Factors To Consider
- A management team with extreme depth of knowledge, industry experience, and industry contacts.
- Competent and highly experienced, underwriting and administrative team
- Independent advisory board
- Well-diversified portfolio of over 350 mortgages resulting in risk mitigation
- Low concentration risk on any one specific mortgage or group of mortgages
- Portfolio average loan to value ratio of approximately 60%
- Large percentage of the overall portfolio is currently comprised of first mortgages risk usually lower on first mortgages than second mortgages
- Over 90% residential mortgages
- Minimal development, commercial mortgage exposure and high ratio mortgages
- Preference for highly marketable real estate
- Mortgage terms to borrowers of one-year term only
Click the link below for more information on AP Capital MIC
Access previous editions of AP MIC’s Fast Facts by clicking here
