A very good article written this month in the Financial Post. Answering questions that many Canadians have on everything from “is my mortgage interest tax deductible?” to “is maternity leave income is non taxable?”
Alta Pacific’s 2012 annual BLOG report. Have a safe and happy New Years! Click here to see the complete report.
Alta Pacific Mortgage Investment Corp. (AP MIC) announces annual yield of 9.51% to Class B ShareholdersNovember 23, 2012
AP MIC is pleased to announce its yield for the year ending June 30, 2012. The fund surpassed its target rate of return for the year by delivering a 9.51% per annum yield to all Class B Shareholders. We continue to see positive performance in the first and second quarters of the current fiscal year, and project that 2013 will be another strong year for the fund and its shareholders.
As Alta Pacific grows, it is exciting to see the diversity of the fund’s shareholders. With more than 700 investors, a wide range of individuals and companies are achieving their financial goals—whether they be preserving wealth, receiving a monthly cash flow, or securing a stronger financial future. At Alta Pacific we work diligently every day to deliver results that keep investments secure, safe and performing. We see a bright future for Alta Pacific, with continued performance for our fund in 2012, 2013 and beyond.
- Placing Funds: Mortgage activity in Western Canada is strong, and quality lending opportunities are ever present in markets served. Conventional banking standards for residential mortgages have become more rigid; this has led to increased opportunities for specialty lenders like Alta Pacific. Furthermore, our relationships with mortgage brokers is a continued focus, as these brokers provide a significant source of lending opportunities.
- Raising Funds: As an exempt market issuer, we remain compliant with all securities regulations in the Canadian provinces, where funds are raised. These regulations have led to AP MIC’s having strong relationships with exempt market dealers and their financial advisors. This is extremely advantageous, as financial advisors perform an important role: helping Canadians make wise and balanced choices in capital management.
- Performance: Alta Pacific is operated by a team of managing partners and dedicated staff in British Columbia and Alberta. Our fund’s performance is audited each year by an external accounting firm. This year’s audit included a few changes. We moved to a mid-sized accounting firm (KNV Accountants LLP, Vancouver, BC) and transitioned from GAAP accounting to IFRS (International Financial Reporting Standards). The move to KNV was essential for us in order to continue growing our business, and the transition to IFRS was mandatory for our fund. Our audited statements are available on our website (see our Offering Memorandum, pp 45-68, for 2012 audited statements), or contact our office to request a copy.
We thank each and every one of you for your continued trust and confidence in Alta Pacific. We are excited to do the work we do, and we enjoy the challenges and our successes every day. Our guiding principle has always been“Return of Capital first; followed closely by Return on Capital,”and we want our shareholders to know that our commitment to this is as strong as ever. In order to achieve this, we keep a close eye on our targets, which are outlined in our Fast Facts (available on our website and herein).
Summer seems barely over; (Canadian) Thanksgiving felt like yesterday; and we’re only a handful of weeks away from Christmas. How time flies when you’re busy! We wish all of you and your families a safe and happy holiday season, and we hope to see you or hear from you soon.
The BCMMA MIC Lending Expo was a huge success and we wanted to thank everyone who visited our booth! It was a pleasure meeting everyone!
A big thanks to the organizers as well as all the different mortgage groups attending, including Dominion Lending Centres, The Mortgage Centre, Verico, The Mortgage Group, Centum, and Mortgage Architects.
We had a great turn out of 250 mortgage brokers- everyone learned about MICs, what we do and how we run. It was a great event and one we hope to attend again next year!
One can find economists, bankers, journalists, as well as friends and neighbors on both sides of the real estate argument these days. Regardless of whose crystal ball is correct, Alta Pacific’s approach to mortgage lending has the firm in a healthy position as we look into Western Canada’s real estate future.
The managing partners at Alta Pacific pay attention to economic situations that affect Canada, the USA, and the rest of the globe. As we’ve seen in recent decades, the world is smaller and the cause and affect can sometimes start in unusual places. For the last 2 years the financial sector was heading to its knees over the crisis Euro zone countries. Not that the European risk is resolved, but the concerns sound similar to those talked about since 2010. There are positive signs coming out of the US in recent months and with a fall election, Canada – and its economy as a whole – will likely see some fallout from the “next President” or the second term Obama.
Closer to home, we keep a very close watch on local markets; Western Canada in particular. We see big differences between cities in a Province and even areas of a city. This comes into every lending/mortgage decision we make. Take Vancouver for example – there are markets in the city (1 and 2 bedroom condos downtown) that have not seen measurable price changes in five years. Meanwhile, 10-15 blocks away, the single family home saw decreases of approx 10% in 2008/9 and then increases by 20-30% since. There are even particular blocks or neighborhoods that have seen swings more widely than neighboring blocks. Knowing micro-markets is key and these differences in communities, towns and cities is what Alta Pacific pays very close attention to.
We don’t talk about a “bubble” at Alta Pacific. We acknowledge that market factors in some segments of the market are more volatile than others but generally we feel confident in Western Canadian real estate . It seems as though CMHC feels this way as well… on August 14th (2012) The Financial Post published an article titled “Housing market crash not in the cards for Canada.” The Ottawa-based federal agency essentially stated that some housing prices will grow more slowly while others – condos and apartments – may soften moderately. We read this as “generally flat housing prices” forecast for the next 12-24 months.
Outside of Alta Pacific’s market by market knowledge, what the press is saying, what CMHC is saying… our firm uses formal funding principles that we believe provide a sound future for Alta Pacific and its shareholders:
- Short term mortgages – all mortgages Alta Pacific advances are short term (12 months in term or less). We lend on properties with a view for what it will be worth, not just today, but in 12 months from now when the mortgage matures
- Loan to Value (LTV) target for the fund is 65%. Currently (August 2012), the fund is performing better (below) than this target.
- We approach and underwrite each mortgage opportunity presented to us based on urban vs rural, luxury vs consumable, Province vs Province…. and always take into account the borrower’s situation and exit strategy.
The team at Alta Pacific believes in real estate and with sound principles we believe it is a wise investment for Alta Pacific, its shareholders, and all Canadians. So, if you hear “bubble trouble” ahead, keep reading… you might just find the next day’s news telling you something quite the opposite.
If you are in need of short term capital please do not hesitate to contact us directly with any questions you may have. Or if you are interested in learning how you can share in the returns generated by specialty mortgages, we invite you to learn about Alta Pacific MIC. We focus on consistent returns for registered investors (those with RRSP, LIRA, RESP, TFSA etc.) or open investments (for folks with cash on hand). Alta Pacific works with Western Canada’s best Exempt Market Dealers. We can introduce you to folks that will work to understand your current situation and future needs; and who can assist you in choosing the right Alta Pacific options for your investment.
Security. Growth. Transparency.
Capital preservation – keeping your investment safe – is of primary concern to every investor; and is our top priority at Alta Pacific. View full newsletter.
Early shareholders may remember the story of how Alta Pacific Mortgage Investment Corp was born. It all started when one of our founders, Ches Hagen, experienced frustration with his mutual fund performance (he owned an assortment of MFs through his RRSP). Receiving statements quarterly, it wasn’t uncommon to see the portfolio value decrease. Still, he would save earnestly each year in order to contribute to his registered holdings and continue buying mutual funds as per his financial advisor’s advice. Time and again the quarterly reports did not contain the results he hoped for, or expected. Yes, there were quarters where his portfolio increased in value, but it got to the point where the statements would arrive and he would think, “I just hope they didn’t go down.” Ches wanted his investments to consistently rise in value – not at an unreasonable rate – just rise! But, he found himself thinking, “I hope I just don’t lose money.” This was in 2003 – 2007. Many Canadians today can relate to this experience of “investment anxiety.”
Alta Pacific was born when Ches could no longer handle the anxiety (and losses). He approached the other (now) founders of Alta Pacific and they discussed how they could develop a business that treated capital preservation as the first and highest priority. Because of the group’s experience in Western Canadian real estate (read bios on our website), and the policies that Alta Pacific adheres to, they were confident in this cornerstone belief. Certainly return on capital was a very important second priority as well. Today, Alta Pacific still focuses on these sound principles and strives for consistent returns for our investors.
At Alta Pacific Mortgage Investment Corp, our target rate of return is 8-11% to our investors. We have achieved this return since raising our first funds in 2008. As we continue to grow, our highest priority remains on capital preservation, while secondarily working diligently to achieve this target rate of return. We expect to reach this target in the year ending June 30, 2012 even though this year posed challenges. The lowest interest rates in history on conventional mortgages caused a natural downward pressure on specialty mortgage rates; combined with an unexpected 3-4 month period where the volume of mortgage opportunities was lower than normal. Rather than fund higher risk mortgages being circulated during this time, Alta Pacific held on to funds (in cash deposits) and waited for higher quality mortgages. This proved wise and the volume of qualified specialty mortgage opportunities picked up.
As we close our fiscal year (June 30th) our auditors prepare our financial statements for the year. With the results of the audit due to be completed by the end of September, we will communicate our yield to investors in October. For our operations team, the 2012/2013 year begins the day we return from the July 1st Long Weekend and we look forward to the year with anticipation. Of course always remembering our first and primary priority; capital preservation.
Have a great summer!
Alta Pacific remains focused on lending in the specialty mortgage market in Canada; with a focus on the western provinces. We advance funds to borrowers backed by first and second mortgages and consider both residential and commercial opportunities. Our mortgage opportunities are sourced through mortgage brokers and direct applications. Mortgage terms are one year or less and rates are competitive with other specialty mortgage lenders. If you are in need of short term capital please do not hesitate to contact us directly with any questions you may have. Or if you are interested in learning how you can share in the returns generated by specialty mortgages, we invite you to learn about Alta Pacific MIC. Alta Pacific works with Western Canada’s best Exempt Market Dealers. We can introduce you to folks that will work to understand your current situation and future needs; and who can assist you in choosing the right Alta Pacific options for your investment.
Security. Growth. Transparency.
Canada Mortgage & Housing Corporation (CMHC) has released the second quarter 2012 Canadian Housing Market Outlook. These reports analyse the anticipated emerging trends in Canada’s new home, resale and rental housing markets. Forecasts are included for each major centre as well as a five year outlook on housing starts.
View reports for Western Canada below:
To view the full list of Housing Market Outlook reports for Canada and Major Centres; see here
At Alta Pacific we are active in the specialty mortgage market in Western Canada. The big conventional banks focus on conventional mortgage opportunities leaving opportunities in the specialty mortgage sector for Alta Pacific Mortgage Investment Corp. and other MICs that participate in this market. If you are interested in learning how you can share in the returns generated by specialty mortgages, we invite you to learn about Alta Pacific MIC. We focus on consistent returns for registered investors (those with RRSP, LIRA, RESP, TFSA etc.) or open investments (for Canadians with cash on hand). Alta Pacific works with Western Canada’s best Exempt Market Dealers and will work to understand your current situation and future need. Feel free to contact us directly with any questions you might have.
Security. Growth. Transparency.