Kuber Mortgage Investment Corporation (Kuber MIC) is a non-bank lender that provides highly personalized short-term mortgage loans to credit-worthy borrowers whose financial needs cannot be met by the conventional lending restrictions of banking institutions. Founded in 2016, Kuber MIC offers investors who wish to take part in mortgage investments, but who may lack the expertise, time, energy, or investment capital required to invest, a unique opportunity to invest in a diversified pool of mortgages, concentrated mainly in the Greater Toronto Area.
Kuber Mortgage Investor Corporation is managed by Square Capital Management inc., a licensed Mortgage Brokerage (Licence #12761) regulated by the Financial Services Regulatory Authority of Ontario and governed by the MBLAA.
What is MIC?
A mortgage investment corporation (MIC) is an investment and lending company designed specifically for mortgage lending in Canada. Through investments in Mortgage Investment Corporations (MICs), retail investors can invest in a pool of mortgages with above-average returns. Shares in a mortgage investment corporation offer an investor to take advantage of a diversified and secured pool of mortgages. Mortgage Investment Corporations (MICs) are regulated by section 130.1 of the Income Tax Act (ITA). Shares of a MIC are qualified investments and are an ideal vehicle for investing in RRSP, TFSA, RRIF, RESP, LIRA, LIF, RDSP, and DPSP.
A MIC mortgage portfolio can include everything from small second mortgages on residential property to commercial and development mortgages on new projects. Every investment is typically based on a thorough investigation of the property. A typical MIC loan ideally never exceeds a specified percentage of the current value of the property. Compare this to a conventional bank’s willingness to routinely loan 80% of the value of the property and sometimes even 100%. MIC’s investment strategies vary considerably, as do their rates of return on invested capital offering flexibility and options to investors and borrowers. Recent MIC’s have generated returns between 6% and 12% for investors, however, returns vary based not only on the investment strategy of the specific MIC but also on the nature of the investment share itself. Some MIC shares are designed to be held for a period as short as a year, and other MIC shares require the investor to hold them for a longer period.
Mortgage Investment Corporations (MICs) are organized for investing in diversified pools of mortgages. Profits generated by MICs are distributed to its shareholders according to their proportional interest. The mortgages are secured on real property, often in conjunction with other forms of security, such as personal and corporate guarantees, general security agreements, and assignments of material contracts, such as insurance policies, prepared by lawyers for the MIC.
Benefits of MIC
The following are some benefits associated with investing in a MIC:
- Investment in Canadian real estate
- Available for both domestic and foreign investors
- High yield. Targeting > 6%
- Flexible amortization and LTV ratios
- Special tax treatment (Income tax act section 130.1 or 130.1(6)(B)) Shares of a MIC will generally be “qualified investments” for deferred income plans including registered retirement savings plans (RRSP), tax-free savings accounts (TFSA), registered retirement income funds (RRIF), registered education savings plans (RESP), locked-in retirement accounts (LIRA), registered disability savings plans (RDSP), and deferred profit-sharing plans (DPSP)