{"id":1255,"date":"2019-08-27T10:45:47","date_gmt":"2019-08-27T14:45:47","guid":{"rendered":"http:\/\/94.153.243.18:9292\/?p=1255"},"modified":"2019-08-27T10:45:47","modified_gmt":"2019-08-27T14:45:47","slug":"evaluate-mortgage-investmen","status":"publish","type":"post","link":"https:\/\/staging.canadianlending.ca\/investors\/evaluate-mortgage-investmen\/","title":{"rendered":"How to evaluate a mortgage investment opportunity"},"content":{"rendered":"

Becoming a mortgage investor can be both financially and personally rewarding, but this doesn\u2019t mean that you should purchase the first mortgage investment opportunity that comes your way. Investing in mortgages can yield greater results than if you were to park your funds in a savings account or even the stock market, but it is not without risk. As with any investment, you must set your own parameters and carefully evaluate each opportunity to optimize the chances of a favourable outcome.
\nWith the many factors that come into play, however, you may be asking yourself, Where do I start? Only you can design a detailed set of criteria that perfectly suits your personal goals, but there are determinants that every investor should take into consideration before deciding to take any risks or spend any money.<\/p>\n

Due Diligence<\/h3>\n

In the book The Art of Investing in Distressed Second Mortgages by Sherman Arnowitz, he states, \u201cThe due diligence process is the key to determining the value of a particular loan or pool of loans, and ultimately the success or failure of your investment. Performing all of the necessary research in order to find out as much as you can about the loan(s) can be a tedious process, but in the end, it\u2019s time well spent.\u201d
\nPurchasing a mortgage note or signing off on any deal without doing your due diligence is fraught with considerable risk that should not be overlooked. It is tantamount to giving up any control over the venture and relying on the other parties to act in your best interests. You can hope that your investment won\u2019t go down the drain, but there is a much better way to avoid such a situation.
\nDoing the proper due diligence will allow you to compare one loan against another, giving you a better sense of which opportunities are actually worth your time and effort. It also raises red flags and warns you of the types of investments (and even people) you generally want to avoid.
\nThe amount of information may be overwhelming, especially at first, but sorting the data will allow you to filter out what you find irrelevant.
\nIn the words of the same author mentioned above, \u201cThere\u2019s a fine balance between due diligence and overthinking.\u201d Don\u2019t be intimidated by information overload. Refine your methodology and ranking system, and if something doesn\u2019t feel right, pay attention to what your gut is telling you. It may be trying to point you to critical information that you overlooked.<\/p>\n

Mortgage data analysis<\/h3>\n

A comprehensive mortgage team will handle all aspects of the mortgage financing process from loan origination and property due diligence to funding and servicing the loan. A diligent seamless process allows for the team to not only correctly assess new potential loans but also monitor the existing mortgage portfolio.<\/p>\n

Each department works as part of an integrated platform, ensuring a seamless experience where expertise operates in an effective coordinated manner:<\/p>\n