Questions and Answers
Don't ever hesitate to call us if you have any questions that are not answered below.
Q - Is Alta Pacific a mortgage franchise or a MIC; or both?
A - We are both. Alta Pacific is both a franchisee in the Dominion Lending Centre (DLC) group as well as a mortgage investment company (commonly referred to as a MIC). We have experienced founders/directors as well as licensed Mortgage Brokers with ready access to a wide range of financial solutions to serve the Canadian real estate marketing in many ways.
Q - What is a MIC?
A - First, MIC stands for Mortgage Investment Corporation. MICs are special companies created by virtue of the Canadian Income Tax Act, which enables investors to invest in a pool of Canadian mortgages.The pool of mortgages is continuously managed, with newly invested share capital, and the proceeds of repaid and discharged mortgages, being utilized to fund new mortgages. The Income Tax Act requires that 100% of a MIC’s annual net income, as verified by external audit, be distributed to its shareholders, in the form of a dividend.
Q - In a nutshell, how does Alta Pacific MIC work?
A - Investors purchase shares in Alta Pacific and Alta Pacific invests funds into Canadian residential, commercial and industrial mortgage loans; loans that are secured by real estate property. These mortgages generate a yield - through interest rates and fees -that is paid back to investors through dividends.
Q - Why are Canadian banks not lending on these mortgages?
A - A common question from new investors is just that, "why aren't the big Canadian banks lending on mortgages such as the ones that a MIC will?" The answer is two-fold. First, the big banks in Canada have their mortgage "products" and unless a borrower fits into their product definition, they won't entertain the business. Secondly, the banking system in Canada could be said to focus on the non-lending business models; such as service fees and investment service fess. Also, gone are the days when the long term relationship with the neighborhood banker was just a phone call away. The customer (the borrower) needed money for that next project and the banker could make a decision in many cases. Today, almost all sizable loan decisions are made by someone geographically well-removed and who is looking a quantitative details only. Their process of approving a mortgage can be very taxing and will often take weeks before the borrower receives a firm loan commitment or notification of rejection. Canadians who find themselves in this situation, look to other options (such as family or MICs like Alta Pacific) to deal with their financial needs.
Q - How do I make an investment in Alta Pacific MIC?
A - One of three ways:
(3) Through your financial advisor - we work closely with financial advisors who can assist you with processing your investment.
A - Although returns can not be guaranteed, investors in Alta Pacific can expect a yield of 9 - 12% annually.
Q - Is there a minimum investment?
A - Yes, the minimum investment is $10,000 CDN
Q - Is there a maxium investment?
A - Yes there may be. Mortgage Investment Corporations are regulated under the Canadian Tax Act and Alta Pacific complies with all requirements and regulations. Please contact one of the company directors for more information if you're contemplating a sizable investment (>$1 million)
Q - Are investments RRSP eligible?
A - Yes, investments may be made through Registered Pension Plans, including RRSP & RRIF plans - for Canadian investors.
Q - Can I re-invest my dividends?
A - Yes, dividends can be automatically re-invested for you, thereby taking advantage of the compounding effect on the dividend yield. We ask that investors notify us at the time of their investment if their intention is to re-invest dividends.
Q - When do I receive dividend payments?
A - If you choose to receive dividend payments, each investor has the flexibility to receive dividends as often as once a month. Dividend payment to investors for a year are equal to their pro-rata share of the net income earned by Alta Pacific in the year.
Q - If desired, how long before I can get my investment back?
A - Because Alta Pacific's philosophy is to generate long-term secure cash returns for our investors, the minimum investment time period is one year. Service Charges may apply for investors wishing to redeem their investments inside of 4 years - contact us to learn about terms and conditions.
Q - What is the source of Alta Pacific's income?
A - Alta Pacific's income is derived principally from interest and fees. Alta Pacific issues mortgages on Canadian (only) residential, commercial and industrial properties. All mortgages/loans are secured by Canadian real estate.
Q - How are Alta Pacifc's profits distributed?
A - The net profit of Alta Pacific is distributed to investors in the form of dividends. The MIC itself is not taxed, as it pays 100% of net profit to its investors. The dividends in the hands of investors are taxed as interest income unless it is a capital gain dividend, in which case it is taxed as a capital gain in the hands of investors.
Q - Who are the auditors of Alta Pacific Mortgage Investment Corporation?
A - Alta Pacific utilizes the services of an external - non arms length - Chartered Accountant firm - Alexander Christopher & Associates.
Q - How much is paid to manage the fund?
A - In exchange for the management services provided under the Management Contract, the Manager will receive a fee from the Corporation equal to 3.0% per annum of the net assets of the Corporation to be dispersed to the Manager on an annual basis.
Q - What is the security for the investor?
A - The underlying security of Alta Pacific’s mortgage portfolio is the value of the real estate against which the mortgages are registered; and where applied, personal guarantees of our qualified mortgage borrowers. Alta Pacific ensures that there is always an adequate amount of equity between the market value of the real estate security and the mortgage amount owed to Alta Pacific. Investor security is further enhanced through diversification of the mortgage securities in Alta Pacific’s portfolio.
Q - I've read on this website that investors should review the Alta Pacific Offering Memorandum (OM); what exactly is an OM?
A - An Offering Memorandum is a legal document stating the objectives, risks and terms of investment involved with a private placement. This includes items such as the financial statements, management biographies, detailed description of the business, etc. An offering memorandum serves to provide investors with information on the offering and to protect the sellers (Alta Pacific) from the liability associated with selling unregistered securities. You can essentially think of the offering memorandum as a business plan. In practice these are a formality to meet the requirements of securities regulators. Most sophisticated investors perform their own extensive due diligence - including in-depth discussions with the principals and directors of Alta Pacific.