# Any thoughts on Romspen Mortgage Investment Fund



## RedRose (Aug 2, 2011)

Seems minimum investment is 150K pays at least 7%
but seems tough to get it liquid again without lots of signatures. 

A management fee, not sure if 1% 2 or 3% they are not too clear on that part.

www.romspen.com 

Any comments welcome.


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## humble_pie (Jun 7, 2009)

RedRose said:


> Seems minimum investment is 150K pays at least 7%
> but seems tough to get it liquid again without lots of signatures.
> 
> A management fee, not sure if 1% 2 or 3% they are not too clear on that part.
> ...



no. Rose, it's obvious that someone is selling these products to you. Timbercreek was another one. All over canada, there are financial planners running around right now selling these illiquid, non-trading or hardly-trading mortgage entities.

please don't even think of going there.


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## doctrine (Sep 30, 2011)

If you're interested a high yield mortgage fund type investment, why not invest in a company like MCAN Mortgage Corporation (MKP.TO) which has a 9% yield and would allow you to get out a lot easier? You could also invest a lot less than $150k.


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## My Own Advisor (Sep 24, 2012)

MKP is risky, no? I suspect most yields over 7% are not sustainable, let alone 9%. ?


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## humble_pie (Jun 7, 2009)

i don't happen to believe that hi yield should be any sort of criterion for this lady.

much more important should be soundness, strength & liquidity of the stock, along with sustainabilitiiy of the dividend even if it is a lower dividend. Ideally the stock should be a buy-it-&-mostly-forget-it. A problem these days is that prices are so high, though.


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## doctrine (Sep 30, 2011)

MKP pays out all of its earnings. Mortgage investment corporations/funds are a different beast than most investments. There is virtually no chance of real long term capital gains, but the payout is steady and has been for a long time. Like I said, if what you are looking for is a high yield mortgage fund-like investment, MKP is a viable publicly traded option. The distributions are not eligible dividends though so its definitely unsuitable outside an RRSP or TFSA in my opinion. Certainly, I would take that over an illiquid 7% fund with $150k min investment and additional fees.


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## andrewf (Mar 1, 2010)

Don't do it! Unless you have a multi-million portfolio, this is way too concentrated an investment for you. I echo HP's concern that someone is trying to sell this to you to collect a commission.


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## liquidfinance (Jan 28, 2011)

Another consideration could be FN.TO

From the last set of results I believe MKP could be at risk of a cut in their payout although I didn't look in too much detail. 

If you are really interested in yield from mortgages look at AGNC or NLY. However look at the chart and the recent capital losses don't make them look attractive. 

As others have said you should avoid the fund you mentioned at all costs!

Wise words from humbe



> much more important should be soundness, strength & liquidity of the stock, along with sustainabilitiiy of the dividend even if it is a lower dividend. Ideally the stock should be a buy-it-&-mostly-forget-it. A problem these days is that prices are so high, though.


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## HaroldCrump (Jun 10, 2009)

RedRose, none of these above mentioned high yield mortgage or R/E loan based derivative products is suitable for your investment situation.

They are all linked to a variety of factors that can change within the blink of an eye, such as long term bond yields, Quantitative Easing (Q/E) policy, "taper-talk", US fiscal problems, etc.
A passive, unsuspecting investor wouldn't even know what meteor hit their positions overnight.

As humble_pie said above, far more suitable would be steady, stable, boring old Canadian and US blue chip mega cap corporations, with slightly higher than average yield, such as BCE, Royal & TD Bank, Microsoft, J&J, and a handful of others.

Also, don't forget to keep an eye on rising GIC and HISA rates these days.
Just this week, Scotiabank offered a 5 yr. GIC @ 3%, available until 30th Sep. (next Monday).
A high yield CDIC insured product like that beats the heck out of any high yield, high risk stock for you.

IMHO, of course.


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## RedRose (Aug 2, 2011)

Oh Thank YOU Harold for your reply. I sincerely appreciate that.



> As humble_pie said above, far more suitable would be steady, stable, boring old Canadian and US blue chip mega cap corporations, with slightly higher than average yield, such as BCE, Royal & TD Bank, Microsoft, J&J, and a handful of others.


I have been waiting to buy these including the banks and they are just going up and up. I haven't been able to buy in yet.
I bought a few Reits on the high side and they have all come down especially D.UN, so I am patiently waiting and looking around.

Thank You to All that contributed. Much Appreciated.


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## Berubeland (Sep 6, 2009)

If I could add a few words, I have learned a lot about exempt market securities and I would caution anyone to avoid them at all costs. The reasoning is that these companies are not required to submit to any oversight. Their financial statements could be a complete fabrication and you would never know it. 

They are supposed to get you to sign know your client forms and some disclaimers that will say "you could lose all your money" That basically is their carte blanche to rip you off if they want to. 

I have a copy of a Judgement between Romspen and League. Romspen lent them 1.5 million. These are high risk mortgages

Please people I cannot emphasize this enough do not invest in any exempt market securities, the regulators are not watching these companies or protecting investors.


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## RedRose (Aug 2, 2011)

Thank YOU Berubeland.

I am so glad that I asked this question before I made a move.

Much appreciated.


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## Mitch Parker (Oct 29, 2013)

RedRose said:


> Thank YOU Berubeland.
> 
> I am so glad that I asked this question before I made a move.
> 
> Much appreciated.



Have you ever considered a mortgage syndication? It offers all the benefits of an exempt market product but with much more security and stability. For example, all investors are registered on title to the property the same way a bank is on a residential mortgage. Also, because it's a mortgage based investment, returns are fixed for the term (usually at 8%) with a bonus being paid out at completion depending on the profitability (usually 2-4% per year). It's also RRSP, TFSA, LIRA, RIF, RESP, and cash eligible.


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## humble_pie (Jun 7, 2009)

Mitch Parker said:


> Have you ever considered a mortgage syndication? It offers all the benefits of an exempt market product but with much more security and stability. For example, all investors are registered on title to the property the same way a bank is on a residential mortgage. Also, because it's a mortgage based investment, returns are fixed for the term (usually at 8%) with a bonus being paid out at completion depending on the profitability (usually 2-4% per year). It's also RRSP, TFSA, LIRA, RIF, RESP, and cash eligible.



i wonder if you could market your products somewhat less forcefully? would certainly appreciate ...

in addition, the OP here is a special case. Please do not pitch exempt market products to this party.


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