Diversify your portfolio with Canadian real estate
Mortgage Investment Corporations ("MICs") are diversified pools of predominantly residential mortgages secured by real estate. Investors purchase shares in a MIC and receive a proportional interest in the fund's portfolio and the income it generates. MICs are focused on providing a steady and consistent stream of income in order to offer the investor with a greater portfolio diversification.
Armada Mortgage Corporation
Armada Mortgage Corporation is registered as a MIC in British Columbia and is extra-provincially registered in Alberta, Ontario, and Manitoba. Our company is audited annually, and our principal regulator is the BC Securities Commission.
Our MIC's primary goal is to provide a consistent stream of interest income while focusing on the preservation of capital. Our target rate of return is the 3 year Bank of Canada quoted Bond yield plus 3.75%. We strive to achieve our investment goal by investing in a diversified group of residential 1st and 2nd mortgages, with an asset allocation model of 75% in 1st and 25% in 2nd mortgages. This model may be modified upon approval of the directors.
Class A Preferred Shares in the MIC are sold with a par value of $1.00. Investments are RRSP, RRIF, and TFSA eligible. Subscribers must subscribe for an initial minimum of 2,500 Preferred Shares.
Geograhic Lending Area
We believe in a diversified strategy and have focused on lending in major urban centres of British Columbia, Alberta, Manitoba and Ontario that exhibit active and liquid real estate markets.
Currently, our MIC distributes dividends on a monthly basis. Shareholders may choose to take their dividend in cash or reinvest them in additional shares. Current dividend is set at 4.5%, and historical simple average rate of return from 2003 to 2016 is 6.7%.
In order for the MIC to avoid paying any income tax, it distributes 100% of its annual net income before taxes to shareholders in the form of a dividend. Dividends are treated as regular interest income for income tax reporting; a T-5 will be issued. The MIC is audited annually.
By their nature, mortgages are not as liquid of an investment when comparing to equity stocks traded on open exchanges. To achieve our investment objectives, the MIC must be fully invested and maintain a low to no cash position except in times of scheduled dividend distributions. Investment terms are for one year; see our Offering Memorandum for our redemption policies.
All mortgages are secured on-title of the real estate, which is registered through a lawyer. Mortgage loan amounts are generally kept below $750,000 in 1st position and $150,000 in 2nd position. The mortgages are generally amortized over 25 years and borrowers are required to make monthly payments. The MIC lends to a maximum of 75% LTV on 1st and 2nd mortgages. Title insurance is required.
We maintain a line of credit with the TD Canada Trust that is secured by the MIC's assets. The credit facility increases liquidity and increases returns through financial leverage: target leverage is between 10-20% of mortgage receivables.
Returns illustrated are without the reinvestment of monthly dividends. Reinvestment of monthly dividends ("DRIP") is available to investors who request it.
As of August 1, 2017 the Company's funds are invested in 139 Mortgages ranging in amounts from $25,000 to $750,000 for a total aggregate principal amount of approximately $25,613,306. The interest rates on these Mortgages range from 4.99% to 11.19%. The average LTV (Loan-To-Value) as of August 1, 2017 is 57.58%.