The Dez Capital Lending Philosophy
The real estate market has been going strong in Ontario for over a decade and a common situation many developers find themselves in is quick access to capital. When a potential development property hits the market, there is often a bidding process and requires a fast closing with little to no conditions.
Banks are extremely slow in their processes and often require numerous documents that can alleviate the time constraints on the offer. Additionally, owning multiple properties with borrowed capital is not looked upon favorably by banks. In such circumstances a private lender can provide suitable terms and conditions quickly to close on a development property. Private lending is based on the equity in the asset we are lending against, as well as the borrower’s credibility. That is where we come in.
As entrepreneurs, we recognized an under-serviced ﬁnancing market that demanded elevated capital investment and far more responsive service than that offered by traditional lenders. Working primarily in residential mortgage lending in the Greater Toronto Area, we have built a solid and diversified portfolio of real estate investments.
Known for our fast decision-making and financing turnaround, a reputation that is highly valued in the current market, there are several parameters we consider when engaging the capital at Dez Capital Mortgage Investment Fund. We spend a great deal of time evaluating the property, looking at the appraisal, the location and neighbourhood, sold data in the area and future potential of the area. We also do extensive due diligence on the borrower’s credit history, ability to service the loan, and litigation history.
Another parameter we consider is the ratio of first mortgages. In general, second mortgages have higher return and therefore higher risk. So for this reason, we look at the immediate and future economic forecast and adjust the percentage of the first mortgages in our portfolio. Construction mortgages are another loan that we consider closely. In a poor economic climate, we slow down on our construction lending because often this means a harder market to sell new homes which can be an issue for repayment of the loans.
To date, Dez Capital has invested over $481 Million in approximately 588 mortgages. We continue to work with our developer clients to come up with creative financing solutions to provide them with the much-needed quick access to capital.