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What to consider when choosing a mortgage investment company

Business history, investment strategies and market reach among the characteristics to keep in mind when looking for a provider for your mortgage investments
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Find the mortgage investment provider that’s the right fit for you.

Not all mortgage investment companies are created equal, and not all deserve your commitment as an investor.

So, what should you be looking for when it comes to finding the fit that’s right for you?

CMI Financial Group, a leader in the private mortgage investment sector, shares a few items that potential investors should consider.

1. What is the company's track record and reputation?

Make sure you do your due diligence. Investigate the company's history, including its track record of successful mortgage investments and any regulatory actions or complaints filed against it.

2. What is the mortgage investment provider’s investment strategy and risk management approach?

Find out what makes the company tick by understanding its investment strategy, including the types of mortgages it invests in, the geographic regions it operates in, and its approach to risk management.

Also inquire about underwriting standards, diversification practices, and mitigation strategies for potential losses. Assess whether their investment philosophy aligns with your risk tolerance and financial goals.

3. Find out what investing is going to cost by knowing the company’s terms, fees, and potential returns

Examine the terms of the investment offerings, including minimum investment requirements, duration, expected returns, and any associated fees or expenses.

Make sure you understand their scope of services. Is it full-service? Under one roof? Or are parts of the process contracted out and/or the responsibility of the investor?

4. What characteristics should a reliable and trusted mortgage investment company possess?

  • Transparency and disclosure
    The company should provide information about investment strategies, underwriting standards, fees, risks, and historical performance.
  • Sound risk management practices
    Companies should employ robust risk management practices to protect investors' capital and mitigate potential losses.
  • Investor support and communication
    The best companies offer full-service investor support under one roof, from sourcing and evaluating investment opportunities, through to funding, servicing, monitoring – and all administrative tasks throughout the mortgage lifecycle. The company should also prioritize investor communication, including timely updates on investment performance, addressing investor inquiries and concerns, and offering accessible client service channels.
  • Ethical business practices
    Look for a company with a reputation for ethical conduct, honesty, and integrity in its dealings with investors, brokers, borrowers, and other stakeholders.

5. What are the best ways to research the track record of a mortgage investment company, and what traits should you be looking for?

Review their historical performance, including annual returns, volatility, and consistency. Look for patterns of steady returns over multiple market cycles, as well as their performance during periods of economic stress or volatility.

Seek professional advice by consulting with financial advisors, investment professionals, accountants, lawyers or real estate experts who can provide independent analysis and guidance on evaluating mortgage investment opportunities.

Get a referral from an existing investor. This is one of the best ways to source a trusted firm.

7. How important is it for an investment company to have national reach? Or is a regional firm considered better to handle investments close to home?

National firms typically offer diversification across a broader range of geographic markets and property types. This can help spread risk and reduce exposure to localized economic downturns or market fluctuations. They also have access to a larger pool of mortgage investment opportunities. This allows for more customized investments tailored to each investor’s particular needs and goals.

Regional firms typically offer specialized knowledge and expertise in local markets, allowing them to capitalize on unique investment opportunities. They can also have a deeper understanding of local economic conditions, regulatory dynamics, and property trends, and may offer more personalized service and attention to investors.

Many of the advantages of regional firms may also apply to national firms, but not necessarily vice versa.

CMI Financial Group is a non-bank, financial services provider dedicated to helping investors achieve competitive fixed income returns for their investment portfolios by sourcing high quality mortgage investment solutions - backed by real estate - that match their investment objectives and risk tolerance.

For more information about the benefits of mortgage investing and determining if it is the right investment strategy for you, visit investments.thecmigroup.ca