Syndicated mortgages are becoming an increasingly popular alternative revenue stream and they have become the number one source of income for one particular broker.
“I have referred about 25-30 clients for syndicated mortgages (and) it’s has become, literally, my main source (of income),” Nayan Shah of Centum Future Mortgage Group told MortgageBrokerNews.ca. “I am still a licensed broker; I’m not acting as referral agent for FDS I’m acting as a mortgage agent with my broker, Centum, and I sign my own documents.”
Shah isn’t the only broker embracing syndicated mortgages, with FDS Broker Services and Fortress Real Capital announcing in late 2013 that they had reached the $100 million milestone in funded syndicated mortgages.
Fortress Real Capital claims to offer clients the opportunity to earn eight per cent fixed interest annually by investing in one of its syndicate mortgages – allowing investors to become one of several mortgage lenders on a construction property. And according to Shah, his clients have been making the promised eight per cent interest.
“There is also potential for profit sharing as well; three, four per cent but I always tell my clients ‘let’s not count on it. If it happens, it happens,’ but the eight per cent is a fixed return,” Shah said. “I didn’t find it hard at all to sell because I believe in it myself and when you believe in something and you talk about it, it makes a difference.
“It’s very logical, it is well secured against the property, and the selection of projects is good,” he added. “There is a wide variety of builders as well (offering) low rise, high rise; in the GTA, outside the GTA, Calgary Edmonton.”