Our Investment Philosophy and Criteria
We believe our greatest strength is the depth and breadth of experience of our Management Team. We have an Investment Philosophy that guides every investment opportunity presented to the Management Team for assessment.
The ideal investment opportunity should provide ample security. Fresh property appraisals are required for every deal (or the property assessment if it is a low loan-to-value loan). The creditworthiness of the borrower is assessed. Not every borrower has a perfect credit history, so the Management Team makes an assessment of the individuals involved and decides whether to move forward. Each loan needs to be serviced. The Management Team looks at cash flow projections and determines whether it is realistic for the borrower to make monthly payments. In special situations, an interest reserve fund may be created. In every case, the Management Team looks for the exit strategy for our borrowers. By what means will our borrower be able to pay off their mortgage and return our investors’ funds?
In making lending decisions, the Management Team also reviews the worst case scenario. There is always a possibility a borrower may default. If that happens, how will Dundarave be able to recover the investment? We prefer to make first mortgage loans so that in the unlikely event there is a default, we will be in a position to control the enforcement of our security. Our team will entertain second mortgage loans, but only if the risk is deemed to be low. In every case, we need to see a clear path for resolution without unduly exposing our investors’ funds.
Dundarave has certain criteria for short-term (less than 24 months) 1st and 2nd mortgages to property owners, builders, renovators and land developers for a wide range of real estate projects in British Columbia and Alberta.
We are able to provide a complete range of mortgage loans from simple residential 1st and 2nd mortgages to more specialized loans, such as bridge financing, construction and land development mortgages, equity take-out, inventory, and debt-consolidation mortgages.
We are also able to provide “Special Situation” loans for qualified borrowers who require mortgage money to close purchases quickly, bridge one purchase to another, and get development projects started in a timely manner.
We provide the following types of mortgages:
- Home Purchase and Refinancing
- Land Assembly and Development
- New Construction and Renovation
- Bridge and Mezzanine Financing
- Equity & Inventory Financing
- Participating Mortgages
- Joint Venture Partnerships
- Office Financing
- Commercial Property Financing
- Industrial Property Financing
- Retail Property Financing
- Raw Land Financing
- Apartment Financing
Our Offering Memorandum and Section 130.1 of the Income Tax Act of Canada restrict the types of loans Dundarave can make. For example, restrictions include:
Mortgages are not to exceed 75% loan-to-value except for loans on detached single family homes, or townhouses or duplexes (not part of a condominium-apartment complex) in the Greater Vancouver Regional District or the Victoria Regional District which loans are not to exceed 85% loan-to-value*
The initial term of each mortgage is not to exceed twenty-four months.
Up to 50% of the share capital of DMIC may be secured on non-residential property.
Mortgage loans are not to exceed the greater of $1,500,000 or Ten (10%) percent of DMIC’s portfolio.
Management has decided to restrict loan-to-values to 75% and has done so since the company’s inception.