Questions and Answers
Don't ever hesitate to call us if you have any questions that are not answered below - or if you want confirmation on any detail - click here for contact info.
Q - So 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 Mortgage Investment Co (MIC) work?
A - Investors purchase shares in Alta Pacific and Alta Pacific works with its Manager - Dominion Properties Corp. - to invest 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, "if the deal is so good, why aren't the big banks lending to the borrower?" The answer is simple. The banking system in Canada is controlled by government regulation which restricts foreign banks from doing business in Canada. The Canadian government did this to ensure there is no further competition for the current banks already doing business in Canada. As Canadian bank profits swell the banks have the luxury of reducing the commercial and small business loan portfolio and focus on the non-lending business models, such as service fees and investment service fess. Gone are the days when the long term relationship with the neighborhood banker was just a phone call away when the customer (the borrower) needed money for that next project. All loan decisions now from from someone geographically well-removed and who is looking for minimum financial ratios, who favour specific business segments and who rely heavily on previous or outdated financial information. This process is 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 needs.
Q - How do I make an investment in Alta Pacific MIC?
A - One of three ways:
A - Although returns can not be guaranteed, investors in Alta Pacific can expect a yield of 10% to 16% annually.
Q - Is there a minimum investment?
A - Yes, the minimum investment for an investor is $10,000 CDN
Q - Is there a maxium investment?
A - Yes there may be - please contact us for more information. Mortgage Investment Corporations are regulated under the Canadian Tax Act and AltaPacific complies with all requirements and regulations. Please contact us 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.
Did you know that your investment will double in 5.2 years if left to compound at 14% interest a year?
Q - When do I receive dividend payments?
A - If you choose to receive dividend payments, each investor will receive bi-annual dividends (twice a year) equal to their pro-rata share of the net income earned by Alta Pacific in the year. More frequent payment of dividends can be requested (administration fees will apply).
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. However if you must have your money back, you can redeem your shares after 180 days by paying an early redemption fee.
Q - What is the source of Alta Pacific's income?
A - Alta Pacific's income is derived principally from interest and fees; on Canadian residential, commercial and industrial mortgage loans secured by real estate property and other assets of the borrowers.
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 is the Manager of Alta Pacific?
A - Alta Pacific MIC is managed by Dominion Properties Corp (Dominion). Dominion sources, recommends and makes available to Alta Pacific, for investment, mortgages or interests in mortgages as and when they become available. The Manager has the exclusive right to provide the Corporation with these mortgage investments.
Q - Who is Dominion Properties?
A - Dominion Properties Corp. is based in Edmonton, Alberta and provides real estate builders, developers and property owners with short term loans and intermediate term loans to fund new construction and term financing on land development and income-producing properties across Western Canada. Dominion identifies new mortgage investment opportunities through its network of contacts in the builder, developer and mortgage broker industries.
Q - Who are the auditors of Alta Pacific MIC?
A - Deloitte. of Langley, British Columbia.
Q - How much is paid to the Manager - Dominion Properties?
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 personal guarantees of our qualified mortgage borrowers. Alta Pacific's Manager 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 OM (Offering Memorandum); 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 of Alta Pacific and our Manager.